SY - So-Young Dolls Up With Pivot To High-End Services | Benzinga
Key Takeaways:
- So-Young reported an annual profit last year, reversing two years of losses, as its revenue rose 19%
- The company’s new So-Young Prime service for high-end users helped to fuel a 22.2% revenue jump in its information services segment last year
By Edith Terry
So-Young International Inc.’s (NASDAQ: SY) latest quarterly results provided a facelift for its tired stock, which jumped 4% in the days after its announcement last week. Still, the small pop left shares of the cosmetic services platform operator well below prettier times when it debuted on the Nasdaq in 2019 at a price 20 times its Wednesday close of $1.08.
The latest results showed that So-Young is charting a new course following a series of setbacks, including greater focus on higher-end customers and a move away from working with smaller cosmetic surgery clinics that have become frequent targets of crackdowns. That helped to lift the company back to profitability last year after losing money in the two previous years.
The stock’s weak post-IPO performance reflects a period that encompassed Covid-19 restrictions when many cosmetic surgery clinics were forced to close or scale back operations and people avoided elective medical procedures to minimize risk of infection. It also included a regulatory crackdown on advertising in the medical aesthetics industry starting in 2021.
The regulatory environment got even harder last year, as medical aesthetics providers were required to get licensed before advertising their services. According to the Chinese Association of Plastics and Aesthetics, only 28% of doctors in the industry are certified practitioners.
Only around 13,000 medical beauty institutions in China are currently licensed, with another 80,000 lacking any qualifications, according to market research firm iResearch. The licensing process is not only strict, but also time consuming, now requiring around nine months, up from three months in the past, according to one industry source.
In announcing its latest results, So-Young CEO Jin Xing acknowledged that last year was "even more challenging” for the company than the situation during the pandemic.
"Looking back on the past year, we believe our differentiated strategy with a focus ...