So-Young International Inc.

Good morning, ladies and gentlemen. Thank you for standing by for SoYoung's third quarter 2020 earnings conference call. At this time, all participants are in a listen-only mode. After the management's 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 first speaker today, Investor Relations Director of SoYoung. Ms. Vivian Xu, please proceed.

Thank you, operator, and thank you for joining the third quarter 2020 earnings conference call. Please note that the discussion today will contain forward-looking statements made under the safe harbor provisions of the U.S. 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 outlying our public findings with the SEC, including our annual report on Form 20F. SOEAM does not undertake any obligation to update any forward-looking statement, except as required under applicable law. Join us today on call are Mr. Xing Jing, our founder, chairman, and CEO, and Mr. Bing Yu, our CFO. At this time, I would like to turn the call over to Mr. Xing Jing. Please.

大家好,感谢大家参加新亚2020年第三季度财报电话会议。 Thank you everyone for joining us for our third quarter 2020 earnings call. During the COVID-19 pandemic, China's medical and health industries are facing huge challenges. As the industry warms up, we find that consumers' needs for rapid change and flexible and innovative ways of dealing with them are crucial to the recovery of business. In the third quarter, we fully grasp the recovery of the industry, and continue to expand the community formed by users and medical professionals, and increase investment to improve the community's activity. In this quarter, we achieved a steady performance, with a total revenue of 3.6 billion RMB, which increased by 19% compared to the same period last year. The average number of active users for XinYang mobile devices has increased to 8.7 million, which increased by 154% compared to the same period last year. The number of platform-based medical institutions has increased by 4,096, which increased by 27% compared to the third quarter of 2019.

The medical aesthetics and awareness industry faced significant challenges in China during the COVID-19 pandemic. As we emerge from this setback, we are seeing a recovery that is marked by a resilient and innovative response to rapidly changing consumer needs. We are leveraging the recovery by increasing engagement across our ecosystem. As a result, during the third quarter, we made significant progress in expanding our community of users, and medical aesthetics professionals. Our third quarter results were solid, with total revenues of RMB 316 million, up 90% from last year. We grew our community with average mobile MAUs to 8.7 million, representing an increase of 154% year-over-year, from 3.4 million during the same period of 2019. We also increased the number of paying medical service providers on our platform to 4,100, up 27% from 2019. In the third quarter, we focused on two measures to promote user participation and user growth.

We adopted a strategy to reduce the number of users. By recommending reliable doctors, providing multi-level content, and supporting medical plans, we helped users make rational decisions.

We focused on two main initiatives to drive engagement and user growth during the quarter. Our strategy here is simple. To improve users' trust in our platform, we try to facilitate rational decision-making by providing reliable doctors, multi-layer content, and supportive medical treatment plans.

First of all, our strategy is based on our role. As a reliable platform, we help users make decision-making decisions. At the end of October, we released the second Lubao 10 doctor's list. It has a large demand and requires accurate information professional quality expansion. We hope our users can reach the top doctors in the industry. At the same time, we also create opportunities for doctors to improve their popularity among users. With a doctor from Chongqing as an example, 43% of the turnover and 47% of the income directly come from Lubao's doctor's list. As the first doctor's white list in the Chinese medical industry, the influence of Lubao's doctor's list is rapidly expanding. The number of monthly visits to the doctor's main business has increased by more than 40%. In the first and second period of the list, there were 196 doctors on the list. The third stage of the list attracted nearly 1,000 doctors within a month, which fully reflected the influence of the Lubao 10 list. For doctors and medical professionals, the precise classification and order of skills make it more convenient to search, and can better complete the collection quickly, thereby increasing the efficiency of users' decision-making. This is clearly reflected in our video face-to-face service. In the third quarter, we completed 16.5 million times The first part of our strategy builds on our role as a trusted facilitator to help users make sound and rational treatment decisions. At the end of October,

we launched a second version of our Emerald Doctor Lists where we extend the categories that are in high demand but require very specialized and accurate information. We want to ensure that our users have visibility on who is the best in class doctors while creating the opportunity for these doctors to raise their awareness. One list doctor in Chongqing showed us that 43% of total treatments with more than 47% of revenue contribution was directly from the list. Our Emerald List, a fast-becoming, known as the China's first true doctor wide list for the medical aesthetics industry and monthly visits to the home pages of list doctors were up 40%. A total of 196 doctors have been selected into the first and second version of our Emerald Doctor List. To further demonstrate the wider influence, nearly 1,000 doctors applied for selection in the third list within a month of its announcement. By classifying and ranking doctors and medical aesthetics professionals based on their skills, the AMBER doctor list helped users make better decisions. It makes it possible to execute a search more easily, quickly, and with greater precision. One of the result of the ease and efficiency have been increased use of our live diagnosis services. We completed 165,000 requests, up from 127,000 in the previous quarter. Another great example of the effective can be seen in the city of Xi'an. Average views of live broadcasts by doctors on the ambulance were as much as 21.5 times more than before they were published on the list, on the specific categories.

其次,我们采取措施, 加大支持专业内容生产者发展IP, 包括部署资源, 帮助医生建立个人主业, 以及作为独家平台, 为中国医师协会美容与整形医师大会 提供手术云直播, 吸引近8000位职业医师报名, 正如我们之前提过的, The second thing we did was to improve how we supported the development

intellectual property by professional content creators, or IP. Not only did we deploy resources to help them establish their personal web pages, but we also offered exclusive live broadcast of surgeries at the Aesthetic Doctors and Plastic Surgeons Conference of Chinese Medical Doctor Associations. The feature resulted in nearly 8,000 medical practitioners signing up. As I stated earlier, building a rich and trusted content ecosystem is important for driving long-term growth of our business. Our Soyang Ambassadors project has been embraced enthusiastically by users since its launch in June. As of October, nearly 8,500 premium articles were generated, attracting 481,000 to sign up. The project's official account, Zoyang Investors, has attracted nearly 9.8 million fans. 新养平台的数据显示,第三季度行业复苏依然缓慢, 但整体趋势明显。 我们看到通过新养平台预约的非手术类项目, 已恢复至疫情前的水平,GMV同比增长达40%, 为巩固我们作为首选医美平台的地位, Based on data from our platform, industry-wide recovery was evident during the third quarter. Although it was gradual, specific trends are emerging as non-surgical treatments have returned to pre-pandemic levels with GME of reservation orders through sodium increasing by 40% year-over-year. We reinforce our reputation as the first choice in medical-scientific platforms. Particularly from non-surgical treatments, we focus on three strategic initiatives. First, we focus on non-surgical initiatives. First, we focus on non-surgical initiatives.

First, we focus on non-surgical initiatives. First, we focus on non-surgical initiatives. First, we focus on non-surgical initiatives. First, we focus on non-surgical initiatives. First, we focus on non-surgical initiatives. First, we focus on non-surgical initiatives. First, we focus on non-surgical initiatives. First, we focus on non-surgical initiatives. First, we focus on non-surgical initiatives. First, we focus on non-surgical initiatives. First, we focus on non-surgical initiatives. First, we focus on non-surgical initiatives. First, we focus on non-surgical initiatives. First, we focus on non-surgical initiatives. First, we focus on non-surgical initiatives. First, we focus on non to make the rating more clear and detailed. From this, users can make rational decisions on the choice of medical products. Finally, we offer the consumer a card every time. By standardizing the service process, we can list the material brand, treatment equipment, medical support, etc., effectively protecting consumer rights, shortening the user's decision-making time, and promoting resale at the same time.

First, for all non-surgical treatments being offered on our platform, we focused on governance by cross-checking details on service delivery, ensuring that contract terms had a standard level of certification to improve our sensitivity of available treatment options. Second, we revised our evaluation system for merchants and upgraded our authorizations and rules, making ratings clear and more detailed. As a result, users found it easier to make rational decisions on which treatments to select. Last, we offered Soyang BC cards to consumers, with the option of prepaying for a number of treatments from an authorized and certified list of merchants. By standardizing the service process, including clearly listing the material brands, treatment equipment, and doctor qualifications, This initiative will effectively protect our users' interest, shorten the time it takes for a user to make treatment decisions, and promote repeat purchase.

We are very happy to see that the effective control of the domestic epidemic has made our business prospects clearer. We will fully utilize our competitive advantages in content, technology, and big data to provide customers with effective marketing plans. We are pleased to see that China's effective control of the pandemic situation has shed a more positive light on our business.

We will continue to leverage our competitive advantages in content, technology, and big data to provide customers with result-driven making solutions, marketing solutions. We believe that in facing new market dynamics, we remain focused on expanding the breadth and depth of our offerings while providing highly efficient intelligence service that generate even more value for the metastatic sectors, industry. 下面请我们的CFO比米介绍三季度的财务情况。 like to turn the call over to Ming who will go through the financial part of the quarter.

Thanks, Cass. Please be reminded that all amounts quoted here will be in RMB. Please also refer to our earnings release for detailed information of our comparative financial performance on a year-over-year basis. For the third quarter 2020, total revenues will RMB $359.6 million. up 18.9% year-over-year and in line with our previous guidance. The increase was primarily due to an increase in the number of paying medical service providers whose practices have gradually recovered from the impact of COVID-19 pandemic as it becomes better controlled in China. Within total revenues, information services revenue is RMB 265.7 million, Up 23.9% year-over-year, reservation services revenue is RMB 93.9 million, up 6.6% year-over-year. Costs of revenues were RMB 54.7 million, up by only 1.6% year-over-year. Total operating expenses were RMB 335.1 million, up 46.6% year-over-year. Sales and marketing expenses will be $221.6 million, up 41.5% year-over-year, primarily due to an increase in expenses associated with branding and user acquisition initiatives, and payroll costs due to increased number of employees in the business development team. General and administrative expenses will be $50.3 million, up 55.4% year-over-year, primarily due to increase in payroll costs associated with the expansion of administrative employees. Research and development expenses were on the 63.2 million, up 59.7% year-over-year. The increase was primarily a result of payroll costs associated with increased hiring to support product development, which is in line with the company's strategy of strengthening its technology and big data analysis capabilities. Income tax benefit was RMB 16.3 million compared with the income tax expenses of RMB 2.9 million during the same period last year. The income tax benefit was derived from a change in a preferential income tax rate, one of Soyoung's subsidiaries, which resulted in a refund of RMB 16.4 million for tax net income for tax paid in previous periods. Net income was RMB 0.9 million compared with the net income of RMB 31.6 million in the third quarter of 2019. Non-GAAP net income was RMB 26.4 million compared with RMB 40.5 million non-GAAP net income in the same period of 2019. Basic and diluted earnings per ADS attributable to ordinary shareholders were RMB 0.01 and RMB 0.01 respectively, compared with RMB 0.31 and RMB 0.29 respectively during the third quarter of 2019. Now for our balance sheet. As of September 30, 2020, we had total cash and cash equivalents, restricted cash, and and term deposits and short-term investments of RMB 2.81 billion compared with RMB 2.84 billion as of December 31, 2019. We are closely monitoring the ongoing impact of COVID-19 on consumer demand and sentiment as normal working conditions resume in China. We are cognizant that there are many unknowns relating to overall macroeconomic impact of the outbreak, but we are confident that the fundamentals and long-term drivers of our business remain strong. With that in mind, for the fourth quarter of 2020, we expect total revenues to be between RMB $420 million and RMB $450 million. Although we are seeing a recovery across the e-commerce industry in China, it is still relatively early to fully assess the epidemic's long-term impact on our business and the markets in which we operate. So I want to remind you that this forecast reflects the company's current and preliminary views on the market and operational conditions, which are subject to change. This concludes our prepared remarks. I will now turn the call to the operator and open the call for Q&A. Operator, we are ready to take questions.

Thank you. Ladies and gentlemen, we will now begin the question and answer session. If you wish to ask a question, please press star 1 on your telephone and white for your name to be announced. To cancel your request, please press the pound or hash key. please limit to one question at a time per caller. If you have follow-up questions, do request to rejoin the queue by pressing star 1 again. Callers who ask the questions in Chinese, please repeat in English immediately after. Once again, ladies and gentlemen, that's star 1 for questions. Your first question comes from the line of Thomas Chong from Jefferies. Please ask your question.

Can management give us some color about the industry trend after the pandemic? What are the challenges and opportunities and what's the outlook for the industry next year? Thank you.

We are pleased to see that recently the industry has recovered to almost the level of the pre-pandemic. Our performance on W11 showed that Soyang and the industry generally have bounced back. 从今年的整个时间趋势上来看,从年初疫情发生过后,二三月份是行业的最低点,到了五六月份有一波小的反弹。

In terms of timeline, the low point of the industry was in February and March, right after outbreak of the COVID-19.

And we saw a series of small rebounds in May and June. August and September was steady. Year end is a traditional peak season. And with big promotions, major platforms, there has been a new consumption boom in medical studies treatments and services. 从品类上看,非手术类医美受到疫情的影响较小,而手术类医美因为客单价较高。

By category, we saw the least epidemic impact in non-surgical treatments.

the largest impact was on surgeries with higher average transaction values. But these are recovering gradually. Our total transaction volumes have recovered to the same level as the end of last year, but there are still gaps in total revenue size and output.

Although the overall scale of the industry has basically recovered to the level before the pandemic, it still needs to recover to about 20% every year. In terms of recovery, we see different trends in terms of volume and growth rate. Volume has almost recovered, but industry growth rate, which was far from pre-pandemic level of 20%.

Offline service providers still need more time to show confidence in advertising investment. market education has helped to expand its consumption of medical aesthetics treatments and service from niche marketing high fashion and beauty to the mainstream. Medical aesthetic concepts such as skin care, anti-aging, and hair implants are accepted by more and more consumers. There are signs that medical aesthetics consumption is reaching a broader audience across more age groups and occupation backgrounds.

Demand has also been resilient rather than option for surgical treatments.

especially for those who has a higher demand for beauty.

因为疫情的影响,国内消费者去日韩的医美消费受到抑制,这部分用户的消费需求也被释放到国内。 Due to the limitation of overseas travel, users who used to choosing treatments abroad in Japan and Korea now seeking for same quality service locally. We also see the trend that institutions lower the price to get more price-sensitive newcomers because of the intensified competition and price war. In terms of challenges, in this year's large market environment, medical institutions have generally reduced the market budget for surgical medical care, and transferred some of the budget to medical care customers. Due to the impact of medical e-commerce platforms competing with each other, a large number of new consumers have entered the medical care market. However, most of these new consumers are super low-price entry-level medical care projects, such as small bubbles,

Medical static service providers have tried to do total marketing expense for surgical treatments, and some of them transferred part of these budgets to those to use the acquisition from non-surgical due to various microwave alignments. We also observe pricing war in the area produce a surge in new customers. It remains to be seen if those price-sensitive consumers will convert into long-term consumers.

There is no substantial change in the revenue structure of medical-surgical service providers.

Surgical treatments remain the major source of sales and profit. If the uptake of consumption of beginning-level treatments fail to translate into demand for and other high-value treatments, the likely impact on the service provider is that they will be less willing to pay market expense.

A large number of entry-level e-commerce project consumers are also under great pressure from the agency's contract services. Under the premise that the agency itself will set up such a project as a flow project, it is a great challenge to see whether these users will be satisfied with the services and treatment.

The search in beginning-level users and treatments creates another potential problem, pressure on performance. Service providers are using discounts to direct customer traffic. But if these same customers are less than satisfied with the service they get, negative reviews and comments could have an impact on the entire industry as well as the institutions.

However, a relatively good point is that on the Xinyang platform, the customers of entry-level medical products, for example, the products with a price of less than 200 yuan, are still very small in our entire order ratio. However, we can see that on this large e-commerce platform, Those challenges to our platform seems minimized compared to other large traffic platforms.

because we see the data from our platform shows that like only a little percentage of those products belonging to average price below 20 RMB, but some data from other competitors will show like more than 70% transactions finally result in those transactions, finally result those in We expect the industry growth rate to gradually recover. to the pre-pandemic level of 20% in 2021 if we could capture such good control in China.

机构将逐渐加大对市场预算的投入, 特别是在手术类医美项目上。 Service providers will gradually increase marketing budgets, especially for surgical treatments. Institutions adopt sales promotions and to seize the limited market. And there is a pricing war going on, but finally failed.

As service providers discover that these products are inefficient and lead to complaints and disputes,

The key to the healthy development of the industry lies in service and contract. Xinyao will further enhance the level of precision operation, so that consumers can be fully satisfied with their needs in any medical project, whether it is doctors, institutions, content, or products. At the same time, we will continue to expand the investment in video face, green gemstone, and每次卡, to reduce the decision-making difficulty of consumers and improve contract guarantee.

We believe the key to the healthy development of the industry lies in service performance. We will concentrate on refining our service to meet consumer demands for access to the best doctors, service providers, content, and products. That means increasing investment in our products like live diagnosis, embryo doctor list, and Soviet beauty cards to better serve our end users.

These are the answers to this question.

Thank you. Thank you. Your next question comes from the line of Brian Gong from Citigroup. Please ask your question.

Hello, Mr. Jin, Ms. Yu, and Vivian. Thank you for accepting my question. I just want to ask about the growth of our users in the third quarter. Based on the advantage of user growth, I would like to ask what the strategy of our 2021 transformation will be like? What is the progress of our CPL product mentioned before? OK, I will translate myself. Based on our advantage in user growth, what is Soyang's strategy for monetization in 2021? And is there any update for the CPL subscription product you mentioned before? Thank you.

Thank you.

User growth and particularly core medical set user growth will remain one of our key strategies in the next two to three years. With the expansion of user base, user characteristics and at different stage will show greater difference.

We continue to enrich user products and upgrade operations through technology and big data We are keeping enriching user products, focusing on operations, and understanding the needs and the pain points in decision-making progress for users of different levels of experience

with our big data and other technologies. By these approaches, we are shortening users' decision-making cycle and improve monetization.

so that users and doctors and consultants can directly communicate face-to-face and communicate efficiently. The third is Meitsika, which standardizes mainstream light medical care projects, selects institutions, and protects users' treatment and service experience. The fourth is the medical plan, which integrates different institutional resources to create a well-designed medical solution for users.

By doing this, we have several major products. The first one is Enver DoctorList, which is establishing a machine-like model enabling users to quick search and select the doctors. And the second one is we will continue to make efforts on the live video diagnosis to enable users to communicate face-to-face and high efficiently. with doctors and professional consultants. The third one is So Young Beauty Cards. We think that through standardized mainstream live treatment and a strict selection of those service providers to ensure service delivery and user experience. And the last one is medical treatment plans. We think that in this way we could integrate resources of service providers and customize solutions for individual users.

Next, let's talk about the progress of CPL products. Due to the impact of the epidemic this year, the overall market scale of the entire industry has been shortened. The investment strategy of the institutions is more realistic and cautious. Therefore, they are not actively accepting new commercial products. So we made some strategic adjustments to the promotion rhythm of CPL products. Based on the current market situation, Due to the home market size reduced this year, service providers were more practical and cautious about their marketing strategies.

Those, they may less passion on accepting new monetization products. Based on such situation, we made some adjustment on the pace to promote our CPL products. We are still studying and progressing in development of the new monetization products and also in proving the whole quality of our leads. We believe with the market recovery next year and in the near term, we will successfully launch more products to improve overall efficiency of monetization. Thank you, that's all.

Thank you. Your next question comes from the line of Vincent Yu from Needham and Company. Please ask your question.

Hi, management. Thank you for taking my question and the congrats on the strong user growth and great quarter. My question is on the light treatment part or the non-surgical business part. As the industry is seeing more non-surgical demands or light treatment demands, Will this growing demand for light treatments lead to changes in user behavior and their traditional making passes, both online and offline? And how will SoYang adapt to the emerging trends? Thank you, Guanlin, for accepting my question. Congratulations to the company for making a very outstanding record. My question is about the green and white. Thank you. Thank you. In our industry, clean beauty usually refers to

Um,

Like medical aesthetics refers to non-surgical treatments including minimally invasive treatments like body or face injections or for example and energy based services like laser treatments for skin tightening or spot removal purpose. Use of medical treatments adopt a variety of decision paths.

In fact, for high-priced light chain projects, such as ultrasonic knives, heaters, or plastic surgery, for example, like Kusho, or plastic surgery, for example, like Pimiao Jigwang, although it is a light medical treatment, but their single treatment is generally priced at more than RMB 5,000 to 10,000, the price is relatively high, and the treatment has a certain vulnerability and risk, and there are certain requirements for operating doctors. So for the consumer, this type of light cosmetic project, its consumption decision path is actually relatively close to the surgical cosmetic project.

Non-surgical treatments with high value, such as CMRs, cross-couplings, And picosecond laser generally cost from $5,000 to more than $10,000 each unit. So besides their high prices, these treatments are risky and invasive and set high requirements for doctors' view. The decision path for these treatments is similar to surgical procedures.

Similarly,

filler injections such as hyaluronic acid injections to scalp, noses, foreheads, under eye region, and the chin. And SWER-LIFT also set high technology, technical requirements for doctors. As a result, may vary significantly between different doctors and the risks are high. So those decision paths is also similar to surgical treatments.

Although treatment methods are non-surgical in the above types of clean and beautification projects, there is not much difference between the consumer's understanding and decision-making path compared to surgery. Xinyao still helps consumers to solve decision-making problems through content and evaluation diaries, through e-commerce to make prices transparent, and through the positive product alliance that cooperates with equipment and drug manufacturers to solve the consumer's concern about whether the drug is a positive product.

Although the above mentioned light treatments are non-surgical, the consumer cognition and decision paths are more or less the same as the surgical treatments. So for these treatments, much as for surgical treatments were provided to consumers, with the tools for decision making. The toolkit includes, like we already provided, like the true and supportive UGC content, massive SKUs with transparent pricing, and authentic certification on both material and equipment used. We also made innovative approach, like Embrored Doctor Lists, we mentioned before, and Soyoung Beauty Cards, to help improve decision-making efficiency and ensure service delivery quality.

The unit price can be lowered to 200 yuan or even 100 yuan RMB. Basically, there is no injury or risk, and there is no need for medical operations. There are more potential consumers of entry-level medical projects, which brings new increases to the medical market. However, the overall consumption ability of these users is relatively weak. In medical institutions, the conversion rate of high-end unit projects is relatively low. For this type of project, consumers choose to pay more attention to the convenience of price and distance. Another rapidly growing category in the non-surgical treatments is beginning level treatments such as aqua, oxygen, and needle-free injections.

These treatments have average transaction value below 200 RMB or even below 100 RMB, which actually in some other platforms took more than 71% of total inventories, almost no invasive therapy or risk, and require no involvement of physicians. Beginning level treatments have more potential consumers bring growth for the medical-scientific market. However, overall spending power is weaker, and the conversion rate to big tech items is relatively low. For such treatments, consumer choice is dependent on price and convenience for the distance. So we are increasing supply and expanding to more service providers, as well as providing more to consumers with special subsidies.

Thank you. Your next question comes from the line of Leo Cheung from Deutsche Bank. Please ask your question.

Hello, Vivian. Thank you for accepting my question. 我的問題是關於行業競爭越來越激烈。 我想請問一下管理層會具體採取哪些舉措來持續提高我們的市場份額。 So, good evening, Jin Zhong, Yu Zhong, and Vivian. So, thank you for taking my question. We see the sector competition is becoming more intensive. My question is that what initiatives will Soion Tech to increase your market share as the competition intensifies? Thank you.

Thank you. Let's look at it from the perspective of both the commercial and the user side. In the commercial side, due to the impact of the pandemic, the total number of online customers in medical institutions this year has actually decreased a little compared to last year. But in this case, Xinyang's overall income this year compared to last year still maintains a certain growth, so it is easy to push it out. In fact, Xinyang's market share of online customers in medical institutions this year has actually increased very significantly.

First, we think that we will be answering two sides. One is on the merchant side. Because of the negative impact of the COVID-19, the total amount of spending by medical aesthetic service providers on user acquisition declined compared with the previous year. Despite this, we were able to maintain revenue growth. So in this way, we believe this is indicating that we continue to gain market share in the total addressable market.

Although the overall scale of the industry has returned to the level of before the epidemic, there is still a big gap in the number of disputes compared to 20% in the past year. This is a key factor that affects the market investment of medical institutions. We believe that as the industry gradually recovers, medical institutions' investment in investment will also gradually recover, and even increase their investment in marketing customers.

We believe sentiment will recover as industry growth gradually returns to normal at around 20%. And that marketing spending will return to a pre-dynamic level or even larger than before.

From the perspective of marketing customers, XinYang has a very unique advantage, especially in the medical field, especially in the medical field, especially in the medical field, We have unique advantage to depreciate it as from other players.

we will remain this advantage. Meanwhile, we will fine-tune each category, building our advantage on the doctor side with the libido diagnosis and growth doctor list and other innovations to provide better user experience and to attract more spending by service providers.

At the same time, we will continue to optimize our commercial products, highlighting our accuracy of our customers,

Our monetization products enable small to medium service providers to acquire high-quality users through our platform. We are consistent in improving this to highlight our ability to help those small to medium service providers and identify users with a high degree of accuracy and efficiency.

In terms of users, although there is an impact of the pandemic, Bincheng has established a user-reliable medical and health platform. This year, we have not reduced our investment in the market because of our long-term interest in the industry. From the actual data, our MAU continues to grow, and Luchuang's new height has set a solid foundation for our growth in the market share in the users' end.

On the user side, despite the pandemic, we kept our own spending and investment reflection, our commitment to build a trusted medical-static platform. Because we are optimistic about the long-term prospects of the industry, as a result, our MAU has increased and recorded historically high. laying solid ground for market share growth on the user side.

In terms of competition, on the one hand, we are strengthening our traditional advantages in the field of surgery, and we are starting to refine the operation of the second and even third-level products. One product strengthens one product, and we are competing against each other. In the field of surgery, consumers pay attention to doctors. Through the Xenia Doctor's Guide, Video Inspection, and Lubao's Doctor's List, To improve our competitive ability, we are enhancing our traditional advantage in surgical treatments, especially on the doctor side, and have started to fine-tune operations, penetrating into more categories to create a higher entry price. For the non-surgical treatments,

We have adopted a strategy of following the competition in beginning level treatments, expanding the number of service providers and STUs on our platform, and providing subsidies to ensure our pricing advantage. We also improved cooperation with service providers to improve the quality of delivery.

Um.

We launched the Soyoung Beauty Cards testing some non-surgical treatments. We selectively based on the current market conditions and also in Also with our service deciding on the SOP services and also internally the training on those offline merchants to gain more market share with our better service experience. That's all. Thank you.

Thank you. Your next question comes from the line of from 86 Research. Please pass the question.

Hello. Thanks, management, for taking my question. I have a follow-up question on our new initiatives. Can management provide some more color or metrics of our new products, such as the tech rate of Shiyan or our SoYang duty card? And going into next year, do we have any other products in pipeline? Thank you. Thank you for accepting my question. I have a very quick question about our new product. Can you ask the management to provide more data or metrics on our new product, for example, the time and time card, and whether we have any new products in development by next year? Thank you, management.

Okay, thanks. Let me try to answer your question for any new product in business. For Chiyan and the Meisuka, I think we don't have a lot of data to share at the moment. For Chiyan, we have upgraded that service to a more comprehensive and dedicated team to have better services to our high-value customers. But currently, as well, they are not contributing any substantial revenue on our top line. And for the beauty cards model, we just started the second half of this year, and we are trying to make the whole user experience and the whole operating process more efficient. and trying to tackle the light non-surgical market for new users. We are quite confident on the future of the new services, and we probably can share more information and more data going forward in the next few quarters. And for other new products, when we penetrate into the new year, I think that the Anthos Services is always our new categories of services providing to customers other than medical aesthetics. But dental clinics experience more impacts from pandemic, to be frank, in the past few months. And the operation recovered even slower. But next year we will continue to invest in dental treatments and attempt other products like insurance products and for dental treatments based on the new business model. But at present the business only accounts for still a very small portion of the revenue compared to the revenue generated from medical aesthetics. Hopefully that answers your question. Thanks.

Thank you. Well, ladies and gentlemen, that's all the time we have for questions today. So with that, we conclude our conference for today. Thank you for participating. You may disconnect.