SY.NASDAQSo-young International INC
20-F: So-Young International Inc. Files 20-F Report for Fiscal Year Ended December 31, 2024
Sentiment:
Annual Results
So-Young International Inc. releases its annual report on Form 20-F, detailing its financial performance and operational activities for the fiscal year ended December 31, 2024.
Delay expectedThe company did not regain compliance with the Minimum Bid Price Requirement within the compliance period and filed a transfer application to transfer from The Nasdaq Global Market to The Nasdaq Capital Market on February 11, 2025.Nasdaq approved the transfer on February 25, 2025 and granted the company an extended period of 180 calendar, or until August 25, 2025 to regain compliance with the Nasdaqs Minimum Bid Price Requirement.
Worse than expectedThe company's total revenues decreased by 2.1% from RMB 1,498.0 million in 2023 to RMB 1,466.7 million (US$200.9 million) in 2024.The company incurred a net loss of RMB 587.2 million (US$80.4 million) in 2024, compared to net income of RMB25.9 million in 2023.
Summary
- So-Young International Inc., a Cayman Islands-based company, has filed its 20-F report for the fiscal year ended December 31, 2024.
- The company operates in mainland China through subsidiaries and consolidated affiliated entities (VIEs) due to restrictions on foreign ownership in certain sectors.
- Revenues from VIEs accounted for approximately 80% of the company's total revenues in 2024.
- As of December 31, 2024, the company had 77,659,510 ordinary shares outstanding, including 65,659,510 Class A and 12,000,000 Class B shares.
- The company's total revenues decreased by 2.1% from RMB 1,498.0 million in 2023 to RMB 1,466.7 million (US$200.9 million) in 2024.
- The company incurred a net loss of RMB 587.2 million (US$80.4 million) in 2024.
- The company's management has concluded that its internal control over financial reporting was effective as of December 31, 2024.
- The company's ADSs are listed on the Nasdaq Capital Market under the symbol 'SY'.
Sentiment
Score: 4
Explanation: The document presents a mixed picture. While there are positives like effective internal controls, the negative financial results (revenue decrease and net loss) and risks associated with operating in China weigh heavily, resulting in a below-average sentiment score.
Positives
- The company's management has concluded that its internal control over financial reporting was effective as of December 31, 2024.
Negatives
- Total revenues decreased by 2.1% to RMB 1,466.7 million (US$200.9 million) in 2024.
- The company incurred a net loss of RMB 587.2 million (US$80.4 million) in 2024.
Risks
- The company relies on contractual arrangements with VIEs, which may not be as effective as direct ownership.
- Changes in PRC laws and regulations could adversely affect the company's operations.
- The company's ADSs may be prohibited from trading in the United States under the Holding Foreign Companies Accountable Act (HFCAA) if the PCAOB is unable to inspect the company's auditor.
- The trading price of the company's ADSs is likely to continue to be volatile.
Future Outlook
The company intends to use the proceeds from its initial public offering to invest in technology and research and development, enhance its content offering, and for brand promotion and user acquisition efforts and horizontal and vertical business expansions, and for general corporate purposes and working capital needs and potential strategic investments and acquisitions.
Industry Context
The online medical aesthetic service industry is rapidly evolving and intensely competitive, with increasing competition from leading search engines, other online medical aesthetic service platforms, and general online e-commerce platforms.
Stakeholder Impact
- Shareholders may experience volatility in the trading price of the company's ADSs.
- Shareholders may face difficulties in protecting their interests due to the company's incorporation in the Cayman Islands.
- Shareholders may be subject to limitations on transfer of their ADSs.
Key Dates
| Date | Description |
|---|---|
| December 11, 2001 | Promulgation of the Provisions on the Administration of Foreign-Invested Telecommunications Enterprises. |
| August 8, 2006 | Promulgation of the Rules on Acquisition of Domestic Enterprises by Foreign Investors. |
| January 1, 2007 | Effective date of the Administrative Measures on Medical Advertisement. |
| January 1, 2008 | Effective date of the PRC Enterprise Income Tax Law. |
| January 31, 2008 | Effective date of the Administrative Provisions on Internet Audio-Visual Program Services. |
| February 20, 2009 | Issuance of the Circular on Certain Issues with Respect to the Enforcement of Dividend Provisions in Tax Treaties (SAT Circular 81). |
| March 30, 2009 | Issuance of the Notice on Strengthening the Administration of the Content of Internet Audio-Visual Programs. |
| February 15, 2012 | SAFE promulgated the Notices on Issues Concerning the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive Plans of Overseas Publicly-Listed Company, or SAFE Circular 7. |
| December 28, 2012 | Amendment to the Labor Contract Law of the PRC. |
| July 4, 2014 | SAFE promulgated the Circular on Relevant Issues Relating to Domestic Residents Investment and Financing and Round-Trip Investment through Special Purpose Vehicles, or SAFE Circular 37. |
| June 1, 2015 | SAFE issued SAFE Circular No. 13. |
| April 8, 2015 | SAFE promulgated the Circular on Reforming the Management Approach Regarding the Foreign Exchange Capital Settlement of Foreign-Invested Enterprises, or SAFE Circular 19. |
| February 4, 2016 | SAPPRFT and the MIIT jointly issued the Rules for the Administration for Internet Publishing Services. |
| June 9, 2016 | SAFE further promulgated Circular 16. |
| September 1, 2016 | The Interim Measures for the Administration of Internet Advertising became effective. |
| September 2, 2016 | SAPPRFT issued the Notice concerning Strengthening the Administration of the Live Video Broadcast Service of Online Audio-Visual Programs. |
| November 4, 2016 | The Cyberspace Administration of China promulgated the Provisions on the Administration of Online Live Video Broadcast Services. |
| January 11, 2017 | The PBOC promulgated the Notice of the Peoples Bank of China on Matters concerning the Macro-Prudential Management of Full-Covered Cross-Border Financing, or the PBOC Notice No. 9. |
| February 28, 2017 | The National Health and Family Planning Commission of China promulgated the Administrative Measures for the Registration of Medical Practitioners. |
| July 3, 2017 | The MIIT issued the Measures on the Administration of Telecommunications Business Operating Permits. |
| December 1, 2017 | The State Administration of Taxation issued the Announcement of the State Administration of Taxation on Issues of Tax Withholding regarding Non-resident Enterprise Income Tax, or Bulletin 37. |
| December 20, 2017 | The China Food and Drug Administration promulgated the Measures for the Administration and Supervision of Online Sales of Medical Devices. |
| April 25, 2018 | The General Office of the State Council promulgated the Opinion Concerning the Promotion of the Development of Internet Plus Medical and Health. |
| July 17, 2018 | The National Health Commission and State Administration of Traditional Chinese Medicine promulgated the Notice of Publishing of the Measures on the Administration of the Internet Diagnosis and Treatment (For Trial Implementation) and Other Two Documents. |
| August 31, 2018 | The Standing Committee of the National Peoples Congress promulgated the PRC E-Commerce Law. |
| March 15, 2019 | The National Peoples Congress approved the Foreign Investment Law. |
| May 2, 2019 | The ADSs representing our Class A ordinary shares commenced trading on Nasdaq under the symbol SY. |
| December 26, 2019 | The State Council issued the Implementation Regulations for the Foreign Investment Law of the PRC. |
| December 30, 2019 | The Ministry of Commerce and the SAMR jointly issued the Measures for Reporting of Foreign Investment Information. |
| January 1, 2020 | The Foreign Investment Law and its Implementation Regulations became effective. |
| March 1, 2020 | The Revised Cybersecurity Review Measures became effective. |
| April 2020 | The PRC government promulgated the Measures for Cybersecurity Review. |
| May 28, 2020 | The PRC Civil Code was promulgated by the National Peoples Congress. |
| June 10, 2021 | The Standing Committee of the National Peoples Congress issued the Data Security Law of the PRC. |
| July 6, 2021 | The PRC government authorities issued Opinions on Strictly Cracking Down Illegal Securities Activities in Accordance with the Law. |
| July 22, 2021 | The transaction to acquire controlling interest in Wuhan Miracle was completed. |
| September 1, 2021 | The Data Security Law of the PRC became effective. |
| November 1, 2021 | The Law of Personal Information Protection of PRC became effective. |
| November 22, 2021 | So-Young received a non-binding going private proposal from Mr. Xing Jin. |
| December 15, 2022 | The PCAOB issued a report that vacated its December 16, 2021 determination and removed mainland China and Hong Kong from the list of jurisdictions where it is unable to inspect or investigate completely registered public accounting firms. |
| February 17, 2023 | The CSRC promulgated the Overseas Listing Trial Measures. |
| March 18, 2024 | So-Young's board of directors authorized a share repurchase program. |
| September 30, 2024 | The Administration Regulations on Cyber Data Security (Data Security Regulations) were promulgated by the State Council. |
| December 23, 2024 | Wuhan Miracle withdrew its application for a potential IPO and listing on the Beijing Stock Exchange. |
| December 31, 2024 | End of fiscal year. |
| January 1, 2025 | The Data Security Regulations came into effect. |
| February 11, 2025 | So-Young filed a transfer application to transfer from The Nasdaq Global Market to The Nasdaq Capital Market. |
| February 25, 2025 | Nasdaq approved the transfer to The Nasdaq Capital Market. |
| February 27, 2025 | The transfer to The Nasdaq Capital Market took effect. |
| March 21, 2025 | So-Young's board of directors authorized the extension of the 2024 Share Repurchase Program. |
| March 28, 2025 | So-Young's board of directors declared a special cash dividend. |
| April 18, 2025 | Filing date of the 20-F report. |
Keywords
20-F, annual report, financial results, So-Young International, medical aesthetics, VIE, China
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