The stock price has risen over 400% in a month, is So-Young about to "turn things around"?

After entering the offline medical beauty chain industry, So-Young has regained the favor of capital.

On July 16, So-Young (SY.O) saw a single-day stock price increase of 16.26%, closing at $5.22 per share, with a total market value reaching $523 million (approximately RMB 3.754 billion). Just a month earlier, on June 16, the company's stock price was hovering below $1 per share, with a total market value of less than $100 million. In just one month, the company's stock price increased by 444.26%, and its total market value grew by over $400 million.

The recovery in stock price has saved So-Young from the brink of delisting. According to NASDAQ delisting rules, if a listed company's stock price remains below $1 per share for 30 consecutive trading days, it will be required by the exchange to rectify the situation. If the company fails to meet the minimum bid price requirement within a rectification period of 180 days (which can be extended to 360 days), it will enter the delisting hearing process.

As the "first stock in internet medical beauty," So-Young went public on NASDAQ in May 2019, and within a week, its stock price reached $22.69 per share, with a total market value exceeding $2 billion. However, the company's stock price continued to decline, falling below $1 per share in June 2022.

In August 2024, due to its stock price falling below the minimum bid price requirement, So-Young was required by NASDAQ to rectify the situation, with a deadline of August 25 this year. With the recovery of the company's stock price since mid-June, So-Young successfully met regulatory requirements and was able to continue being listed.

Behind the recovery in stock price, So-Young is undergoing a transformation from online to offline. When it was first listed, So-Young was an internet medical beauty platform primarily providing information services to consumer medical businesses. However, with the rise of content e-commerce platforms like Douyin and Xiaohongshu, the company's survival space began to be squeezed.

Against this backdrop, So-Young also began to seek new development directions, first by acquiring a controlling stake in Qizhi Laser, attempting to enter the upstream optoelectronic medical device industry. After Qizhi Laser's IPO attempt failed, So-Young began to bet on the offline new medical beauty industry, starting "co-competition" with former clients.

In early June this year, So-Young's "childlike beauty injection" business faced backlash from the brand side, bringing the company back into the spotlight of public opinion.

Capital Operation Failures

2019 was the first year of So-Young's listing and also the year with the best profit performance for the company. During the year, the company achieved operating revenue of 1.152 billion yuan, a year-on-year increase of 86.58%; the net profit attributable to the parent company was 127 million yuan, turning losses into profits. However, in the following two years, although the company's revenue grew, profit levels continued to decline, and in 2021, it fell into losses.

So-Young's losses are highly related to its business model. As an internet medical beauty platform, the company had previously relied on high investment to acquire customers. From 2019 to 2021, the company's sales and marketing expenses were 470 million yuan, 726 million yuan, and 793 million yuan, accounting for 40.8%, 56.1%, and 46.9% of revenue during the same period, respectively Under high marketing expenses, in the second quarter of 2021, So-Young's app monthly active users peaked at 8.5 million. However, with the rise of content e-commerce platforms like Douyin and Xiaohongshu, this customer acquisition model has become increasingly unprofitable. As a result, the company began to consider a new development path.

In June 2021, So-Young acquired 84.49% of Qizhi Laser for 791 million yuan. Qizhi Laser specializes in laser and other optoelectronic medical equipment. At that time, beauty devices such as lasers, radio frequency, and ultrasound were quite popular. So-Young, as an internet medical beauty platform, entered the upstream equipment industry to achieve synergy and enhance profitability.

Additionally, So-Young planned to take Qizhi Laser public. In September 2023, Qizhi Laser submitted its prospectus to the Beijing Stock Exchange.

By then, the domestic market for optoelectronic beauty devices had become saturated, and Qizhi Laser's performance growth began to slow down. In 2024, the company's revenue was 270 million yuan, only growing by 0.30%; the net profit attributable to the parent company was 33 million yuan, a year-on-year decline of 38.81%. Furthermore, at that time, regulators were tightening the management of optoelectronic beauty devices and other medical equipment, and Qizhi Laser significantly reduced mentions of medical beauty-related businesses in its prospectus.

By December 2024, Qizhi Laser ultimately withdrew its prospectus, terminating its IPO journey. Following the company's IPO failure, several directors and senior executives, including founder and chairman Peng Guohong, director Zhang Liming, and director Wang Shiyu, announced their resignations.

The performance of Qizhi Laser also had a severe impact on So-Young. Due to the company's declining performance and failed IPO, So-Young recorded an impairment of goodwill amounting to 540 million yuan in 2024, resulting in a net loss of 590 million yuan for the year.

Entering "Light Medical Beauty"

With Qizhi Laser unable to contribute more incremental growth, So-Young had to seek additional performance growth points.

In November 2024, So-Young officially announced its entry into the offline market, launching the light medical beauty chain brand "So-Young Youth Clinic." At that time, the company stated that in the past year, "So-Young Youth Clinic" had opened 17 stores in 9 cities, serving over 30,000 users, with order volume exceeding 100,000.

Subsequently, the scale of So-Young Youth Clinic's offline stores continued to expand. Recent advertisements posted by the company indicate that the number of its stores has grown to 32, serving 20,000 users monthly. Public information shows that the company plans to open 50 offline stores by the end of 2025, with a long-term goal of reaching 1,000 stores.

For So-Young, which started as an internet medical beauty platform, expanding into offline medical beauty services inevitably means competing with its former customers. In June of this year, the company engaged in a "war of words" with the supplier of the "Childlike Needle" over pricing issues.

This incident occurred on June 10. At that time, So-Young Youth Clinic announced that it would combine the "Childlike Needle" from the Aivilan brand with the Hailan Water Light and name it "Miracle Childlike," selling it at an ultra-low price of 5,999 yuan. In comparison, the price of the Aivilan "Childlike Needle" was nearly 20,000 yuan This move undoubtedly disrupts the pricing system of the "youthful face injection" industry. Aivlan's upstream manufacturer, Changchun Shengboma, quickly issued a statement accusing So-Young of "not purchasing through Aivlan's official channels" and "doctors not receiving training from the manufacturer," implying that So-Young has issues regarding product sourcing and the qualifications of medical personnel.

Subsequently, both parties have exchanged statements in a "confrontation." So-Young's founder and chairman, Jin Xing, also stated that the current terminal consumer price of 20,000 yuan per injection is very unreasonable, and indicated that the pricing of several domestic youthful face injections to be launched later will be more rational, allowing consumers to get closer to youthful freedom.

From the financial report, it can be seen that So-Young's offline light medical beauty business is developing rapidly. In 2024, the revenue of this business reached 169 million yuan, a year-on-year increase of over 12 times. In the first quarter of 2025, the revenue of this business was 99 million yuan, achieving a further high growth rate of 551.42%.

However, due to the business being in an expansion phase, So-Young's offline light medical beauty business does not have strong profitability, with a gross margin of only 22.26% in 2024, further dropping to 18.78% in the first quarter of 2025. Whether this business can enable So-Young to achieve stable profitability in the future remains to be observed.

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