So-Young International Inc. (NASDAQ:SY) Q3 2024 Earnings Call Transcript November 20, 2024 7:00 AM ET
Company Participants
Mona Qiao - IR
Xing Jin - Co-Founder, Chairman, and CEO
Nick Zhao - CFO
Conference Call Participants
Ivy Li - Haitong Securities
Stacey Lee - Guosen Securities
Nelson Cheung - Citibank
Lusi Zhao - Penghua Funds
Operator
Ladies and gentlemen, thank you for standing by for So-Young's Third Quarter 2024 Earnings Conference Call. At this time, all participants are in the listen-only mode. After management gives their prepared remarks, there will be a question-and-answer session. As a reminder, today's conference call is being recorded. I would now like to turn the meeting over to your host for today's call, Ms. Mona Qiao. Please proceed, Mona.
Mona Qiao
Thank you, operator, and thank you, everyone, for joining So-Young's third quarter 2024 earnings conference call. Joining me today on the call is Mr. Xing Jin, our Co-Founder, Chairman, and CEO; and Mr. Nick Zhao, CFO.
Please note that the discussion today will contain forward-looking statements made under the safe harbor provisions of the US Private Securities and the Litigation Reform Act of 1995. Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from our current expectations. Potential risks and uncertainties include, but are not limited to those outlined in our public filings with SEC, including our annual report on Form 20-F. So-Young does not undertake any obligation to update any forward-looking statements, except as required under applicable law.
At this time, I'd like to turn the call over to Mr. Xing Jin.
Xing Jin
[Foreign Language]
Our business continued to develop robustly during the third quarter, with total revenue reaching RMB332 million, once again surpassing the upper ends of our guidance range. Net income attributable to So-Young was RMB20.3 million, up 11.2% year-over-year, while non-GAAP net income attributable to So-Young came in at RMB22.2 million, up 133.1% year-over-year, demonstrating the effectiveness of our continued investment across the industry value chain.
[Foreign Language]
In the third quarter, we made significant progress in our chain of clinics, expanding the number of stores to 17 currently, from eight last quarter, as we penetrated into more cities. All of our clinics are located in prime commercial areas, which further strengthens our market coverage and competitiveness. This business is gradually becoming the key growth driver for us. Its revenue grew by 67% quarter-over-quarter, with gross margins improving significantly. Notably, all eight of the new clinics opened during the quarter are generating positive operating cash flow and four are already profitable at the store level. In addition, despite of the slowdown in consumer spending, our upstream business continued to deliver satisfactory performance. We continue to optimize the structure of our business with our POP business serving as a solid foundation for the rapid development of these new businesses, creating strong synergies with our chain of clinics and upstream businesses. This provides critical support for our developments in the medical aesthetic market.