So-Young International Inc. Q4 FY2025 earnings call

In 2025, China's medical industry underwent structural adjustment. The company continued to invest in three directions in the fourth quarter: realizing breakthroughs in the scale of joint business and deepening operations, deepening medical service capabilities to build a long-term trust mode, and building supply chain barriers to enhance brand influence and grasp market opportunities. In the fourth quarter, the joint business completed two milestones, with 49 clinics opened by the end of 2025; the medical team expanded, with a full-time medical team of 211 people; in 2026, a new doctor program will be launched; in terms of supply chain, it cooperated with multiple upstream suppliers, and the revenue of the four large single products accounted for over 37% in the fourth quarter

Fourth quarter total revenue reached $461 million, up 25% year-over-year, hitting a record quarterly high. Revenue from the aesthetic center business was $248 million, up over 205% year-over-year, becoming the largest revenue-contributing segment, accounting for over 15% of total revenue. Information and reservation services revenue was $125.7 million, down 26.8% year-over-year; sales of medical products and maintenance services revenue was $69.3 million, down 19.9% year-over-year; other services revenue was $17.7 million, down 40.7% year-over-year

In 2026, the company plans to open at least 35 new centers, accelerate expansion in core cities and deploy in secondary cities; launch a new doctor program in 2026 to accelerate the recruitment and training of medical talents; continue to optimize the opening rhythm of centers and the ramp-up efficiency of new centers, with the proportion of newly opened centers in 2026 lower than last year, and increase the contribution of mature centers; optimize the cost-benefit structure, strengthen cooperation with upstream, and advance the large single-product strategy; optimize the sales and marketing structure, and improve the sales and membership system

Not much detailed discussion of risks presented in the transcript

Q: Regarding gross margin prospects, could share more about the gross margin plans and source of further margin extension?

A: Core factors affecting margin performance are three main aspects: rhythm of opening new stores, cost of spending, and seasonal cancellation. Have a plan to enhance margins: continue optimizing the pace of central openings and the ramp-up efficiency of new centers; continue to optimize the cost-benefit structure; refine seasonal sales and operations.

Q: About the development of Soyang Clinic in second tier cities, whether the current operating performance of these centers has met management's expectations and operational updates?

A: Second-tier cities' clinics have a good growth trend, customer flow and number of human resources projects are growing steadily, single service point income is close to first-tier cities, profitability of second-tier city stores is slightly higher.

Q: Whether the competitive advantages in customer acquisition costs has been maintained amid its continued scaled expansion and customer acquisition strategy for 2026?

A: Customer cost advantage has been preserved and further strengthened, through customer referral model, optimizing customer channel structure, and co-branding initiatives with top IPs.

Q: About the growth and operation of our users, especially core users, specific measures to improve the LTV of core members going forward?

A: Core members of L3 and above are growing well, in 2026 will launch more product proofs, create standardized scientific joint treatment programs, optimize membership system to improve core members' LTV