Soyoung Technology Updates IPO Prospectus: Price Range Set at $11.8–$13.8 per Share, Q1 Revenue Surges 81.8% Year-over-Year
In the early hours of April 23, Beijing New Oxygen Technology Co., Ltd. (hereinafter referred to as “New Oxygen Technology”) updated its prospectus for the U.S. initial public offering and announced the pricing range.
According to the prospectus, So-Young International Inc. plans to issue 13 million American Depositary Shares (ADSs), or 10 million Class A ordinary shares with a 15% over-allotment option. The offering price range is set at $11.8–$13.8 per share, with expected initial proceeds of $153–$179 million.
In addition, the updated prospectus shows that as of the first quarter of 2019, New Oxygen Technology achieved revenue of RMB 206 million (USD 30 million), an increase of 81.8% year-on-year; net profit reached RMB 45.9 million (USD 6.7 million), a year-on-year increase of 49.9%.
Q1 revenue increased by 81.8% year-on-year, marking nine consecutive quarters of growth
As a startup internet-based medical aesthetics service platform established less than six years ago, So-Young Technology achieved profitability in 2017, becoming the first company in the industry to do so. In 2018, it reported a net profit of RMB 55.08 million, representing a substantial year-on-year increase of 220%.
On this basis, So-Young Inc. continued to maintain rapid growth, consolidating its leading position in the industry. In the first quarter of 2019, So-Young Inc. achieved revenue of RMB 206 million, an increase of 81.8% year-on-year; net profit reached RMB 45.9 million, a year-on-year increase of 49.9%.
It is worth noting that over the past nine quarters, SoYoung has maintained consistent quarter-over-quarter and year-over-year revenue growth. Behind this rapid performance growth lies the solid support of SoYoung Technology’s market leadership position and its innovative business model.
In October 2018, a Frost & Sullivan research report indicated that New Oxygen Technology’s robust business model positioned it as a market leader in audience reach, user engagement, gross merchandise value (GMV) facilitated, and trustworthiness. Furthermore, its exceptionally high user engagement established New Oxygen Technology as the most trusted platform among internet-based medical aesthetics service providers.
As proof of high engagement within the SoYoung Technology community, “Beauty Diaries” totaled more than 2 million posts published on the SoYoung Technology platform as of December 31, 2018, with each Beauty Diary based on actual cases and accompanied by relevant case details.
Furthermore, SoYoung’s monthly active users (MAU) on its mobile platform increased from 1.08 million in Q1 2018 to 1.93 million in Q1 2019, representing a substantial growth rate of 78.7%. The number of paying users also rose from 68,900 in Q1 2018 to 127,300 in Q1 2019, marking an increase of 84.9%.
Accordingly, the number of paying medical institutions on the platform increased by 37.4%, from 1,966 in Q1 2018 to 2,701 in Q1 2019. The number of medical institutions paying information service fees on the platform surged by 136.4%, from 784 in Q1 2018 to 1,853 in Q1 2019. The gross merchandise value (GMV) of medical aesthetic services facilitated on the platform rose by 68.4%, from RMB 412 million in Q1 2018 to RMB 694 million in Q1 2019.
Expand Customer Acquisition Channels to Reach the Broader Consumer Healthcare Market
The funds raised by New Oxygen Technology will be primarily used for investments in technology and scientific research, brand marketing and customer acquisition, as well as horizontal and vertical business expansion. The company also aims to further enrich and enhance its content output, while covering daily operational expenses and supplementing working capital.
Business expansion, both horizontal and vertical, includes entering the consumer healthcare services sector, enhancing brand awareness, and diversifying customer acquisition channels. Investment in technology and research and development involves the proactive deployment of artificial intelligence and other innovative technologies.
According to Frost & Sullivan, New Oxygen Technology was the first company to establish a community focused on medical aesthetics services and the first to use artificial intelligence technology to analyze facial features for online assessment of medical aesthetic needs and prediction of treatment outcomes.
In its efforts to penetrate the consumer medical services market, So-Young International has already taken steps. According to its prospectus, information service revenue, which constitutes a part of So-Young’s total revenue, has grown at a faster rate than reserved service revenue. In the first quarter of 2019, information service revenue reached RMB 143 million.
Currently, New Oxygen Technology’s information service revenue is derived not only from medical aesthetic service providers but also from a broad range of consumer healthcare service providers.
In its prospectus, So-Young Technology stated that the company has generated a small portion of its revenue by assisting other consumer healthcare service providers, beauty salons, and certain beauty product vendors in distributing high-engagement content on the So-Young platform and social media networks.