So-Young International Inc.

Ladies and gentlemen, thank you for standing by for So Young's second quarter 2025 earnings conference call. At this time, all participants are in a 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 will now like to turn the conference over to your host for today's call, Ms. Mona Chao. Please proceed, Mona.

Thank you, operator, and thank you everyone for joining So Young's second quarter 2025 earnings conference call. Joining me today on the call is Mr. Xin Jing, our co-founder, chairman, and CEO, and Mr. Nick Zhao, CFO. Before we begin, please reference to the safe harbor statement in our earnings release, which applies to this call as we will be making for a looking statement. Please also note that we will discuss the SCAP measures today, which are more thoroughly explained and reconciled to the most comparable measures reported under GAP in our earnings release on our investor relations website and findings with SEC. At this time, I'd like to turn the call over to Mr. Xin Jing.

Everyone,

and welcome to today's earnings call.

Our offline joint venture continues to develop well and achieve a simultaneous increase in size and quality. The business model and strategic direction have gained high recognition of the market. In the second quarter, the company has achieved a total income of 3.79 billion yuan. Among them, the joint venture has reached 1.44 billion yuan, surpassed the top line, and became the company's largest income scale business block for the first time. This structural breakthrough, which marks the strategic transformation of the New York City, has crossed the line and entered a new stage of a more mature business model with a more clear growth drive.

The revenue of RMB 379 million, revenue from aesthetic center business reached RMB 144 million, surpassing the upper end of our guidance and making it our largest revenue contributing segment for the first time. This marks a critical inflection point in our multi-year strategic transition, ushering in a new phase with clear growth drivers and a more mature business model.

As of today, our light and beautiful chain brand, Xin Yang Qingsheng, has increased the number of 1-beauty stores to 33, and has been affected by the rapid expansion and continuous investment of the joint venture. The net loss of the second quarter, which belongs to Xin Yang, is RMB ,603.9 million. The net loss of Xin Yang, which belongs to Gap Co., Ltd., is RMB ,054.4 million. In the future, as we continue to optimize the service process, improve customer experience, and enhance brand influence and reputation, we will further improve the single-storey operating efficiency and user experience. We have confidence in the long-term high-quality sustainable growth.

As of today, our Xin Yang Clinic life medical aesthetic chain has grown to 33 centers. Due to rapid network expansion and ongoing investments, we recorded a net loss attributable to Xin Yang of RMB 36 million and a non-Gap net loss of RMB 30.5 million in the second quarter. Going forward, as we further refine our service workflows, enhance customer experience, and strengthen our brand influence and reputation, we expect improved operational efficiency per center and enhanced customer loyalty. We remain confident in delivering sustainable high-quality long-term growth.

We have 29 Xin Yang Clinic official operations. There are 20 operating hours in three months. 19 of them have achieved a management cash flow in June. 13 stores have achieved monthly profits. As the stores' scale further expands, the overall service volume of Xin Yang Clinic is also rapidly expanding. By June, Xin Yang Clinic has accumulated over 100,000 users. In the second quarter, the sales volume has exceeded 67,400 times. The return is 24% and the increase is 381%. The number of sales service points exceeds 154,500. The return is 25% and the increase is 458%. The overall service volume of the chain is over 60%. The users' satisfaction continues to remain at a high level of 4.99%. In the second quarter, we continue to set up new stores and continue to maintain the leading customer efficiency. The average cost of the customer is only hundreds of yuan. Among them, the lower cost of the private flow and the old customers' interest account for more than 70% of the new customers. The benefit from the increase in operating efficiency, the overall profit level of the chain, and the return is about 5% higher. The brand and operating efficiency of Xin Yang Clinic is constantly improving.

Among these, 20 have been open for more than three months. 19 turned operating cash flow positive in June and 30 were profitable on a monthly basis. Alongside the continued network expansion, our overall service capacity is rapidly growing. With total number of active users exceeding 100,000 by June, total number of verified aesthetic treatment visits surpassed 67,400 in Q2, up 24% quarter of a quarter and 381% -over-year. And the total number of verified aesthetic treatment performed reached over 154,500, up 25% quarter of a quarter and 458% -over-year. The overall repeat purchase rate for our aesthetic center business exceeded 60%. Our customer satisfaction score remained high at 4.99 out of 5. While we continue to expand our network in Q2, we maintained leadership in customer acquisition efficiency. Currently, our average customer acquisition costs remain in hundreds on the range, with over 70% of new customers coming from low-cost private cell phone traffic and referrals from existing customers. Benefiting from improved operating efficiency, the growth profit margin of our aesthetic treatment services expanded by around 5 percentage points sequentially. These achievements validate the Siyang Clinic's growing blood influence and operational efficiency.

We have over 130 full-time doctors in our clinic who have a medical background. Almost 90% of them are professional dermatologists. We also fully promote digitalization and AI-driven full-chain management, and achieve full-time standardization of pre-ordering, signing, testing, consulting, and treatment. Through a digitalized user journey, each user can obtain a clean, transparent and -to-follow medical experience.

We remain committed to standardized service delivery, consistently focusing on healthcare quality, procedural compliance, and user experience. We have implemented a rigorous physician selection and training system, with all of our over 130 full-time doctors having either completed internships or standardized training at public hospitals, and nearly 90% of them being specialist dermatologists. Additionally, we are advancing -to-end management through digitalization and AI-driven solutions, achieving full process standardization from self-service booking and check-in to testing, consultation, and treatment. This digitized approach provides every user with a clear, transparent, and treatable medical experience.

In terms of project implementation, we have launched a series of popular projects such as Miracle Childhood, Beauty and the Water, and BBL Hero. These projects not only enrich the service system of the Xinya Psychiatric Hospital, but also increase the price of the service, and further enhance our differentiated competitive advantage.

On new treatments, we launched a number of highly acclaimed offerings in Q2, including Miracle PLLA, Mermaid Skin Booster, and BBL Hero, which expanded our medical aesthetics portfolio, increased ARPU, and reinforced our unique competitive edge.

In terms of brand activities, we have launched a series of events in the second quarter, including the International IP Battle Book, which is the core business circle in Beijing, and the Xinya Youth Theater. Through the IP alliance and the immersive experience, we have attracted a large number of young users to participate in the live broadcast. Nearly 10,000 people posted posts on the red book, which significantly increased the brand popularity and popularity. At the same time, we have also collaborated with the self-media creator, the book team, to express the content through more emotional resonance, further interpreting the brand and the concept of the book. The relevant content has generated a hot response among the female core users, and has effectively strengthened the professional reputation and brand newness in the self-media class.

Turning to branding, we teamed up with International IP Battle Book around our Miracle PLLA series to stage the Sohyang Theater Pro-Path events in Beijing and Shenzhen CBDs during the quarter. Through IP co-branding and immersive experiences, this campaign attracted massive young customers' participation, with nearly 10,000 users sharing their experiences on red notes, significantly boosting brand visibility and offline engagement. Meanwhile, we partnered with self-media influencer, Su Min, and her team to reinforce our Everyone Deserves Youth philosophy, where emotionally resonant storytelling, the content of the campaign resonated strongly with our core female user base, effectively reinforcing Sohyang Clinic's professional reputation and brand positioning among smart, beauty-conscious women.

In the next three seasons, we will also be launching new stores in the first-tier cities, and plan to enter some of the core second-tier cities. We expect that the new stores will be around 10 stores in the third season.

In the upcoming third quarter, we plan to open around 10 aesthetic centers, expanding not only in first-tier cities, but also into core second-tier cities. Looking ahead to the full year, we expect the total number of our aesthetic centers to reach 50. This will further expand the accessibility of Sohyang Clinic's life medical aesthetic services nationwide. We will also continue to strengthen standardized operations and product innovation capabilities, further cementing our market's leading positions in China's life medical aesthetic industries. We continue to build out our comprehensive medical aesthetic supply chain, driving nationwide penetration of both self-developed and exclusively distributed products. By the end of Q2, the number of institutions we served with supply chain solutions for injectables exceeded 1,600 with shipments of ULEF-T reaching around 39,100 units in Q2, up over 40% sequentially. As our upstream products acquire additional certifications and scale, we expect to further enhance our advantage and improve cost efficiency, while solidifying our mode of full industrial industry chain synergy. Our top business remains stable during the quarter. We continue to provide digital operations support for partner institutions, maintaining healthy and orderly development for our platform.

We will continue to expand our market coverage in the first-tier cities, and further expand our market coverage in the second-tier cities. We will also continue to strengthen our local brand infrastructure, and further enhance our user experience. We will continue to improve our user experience, and further strengthen our user experience in the second half of 2025.

Looking to the second half of 2025, we will continue to increase the density of our aesthetic and design. We will continue to build a solid business foundation to deliver long-term value to our shareholders. We see the progress we made as a springboard, and we'll keep innovating to create greater user value and unlock broader growth opportunities. Now I hand over to our staff, Nick, who will walk through the financial results by the QA session.

Hello, this is Nick. Please note that our amounts are quoted in RMB. Please also refer to our earnings release for detailed information of our comparative financial performances -over-year basis. Total revenues during the quarter were RMB 378.7 million, down 7% -over-year, primarily due to a decrease in the number of medical service providers subscribing to information services on our platform. Aesthetic treatment service revenues reached RMB 144.4 million, soaring .1% -over-year, exceeding the high end of our guidance, primarily due to the business expansion of our branded aesthetic centers. Information and reservation services revenues were RMB 135.2 million, down .6% -over-year, primarily due to a decrease in the number of medical service providers subscribing to information services on our platform. Sales of medical products and maintenance services were RMB 76 million, down .1% -over-year, primarily due to a decrease in the order volume of medical products. Other services revenues were RMB 23.2 million, down 64% -over-year, primarily due to a decrease in Soyang Prime. Cost of revenues were RMB 184.6 million, up 19% -over-year, primarily due to a business expansion of our branded aesthetic centers. Within cost of revenues, cost of aesthetic treatment services were RMB 109.4 million, up .5% -over-year, primarily due to the business expansion of our branded aesthetic centers. Cost of information and reservation services were RMB 16.7 million, down .4% -over-year, which was in line with the decrease in revenue generated from information and reservation services. Cost of medical products sold and maintenance services were RMB 39.5 million, down .8% -over-year, primarily due to a decrease in cost associated with the sales of medical products. Cost of other services were RMB 19 million, down .8% -over-year, primarily due to a decrease in cost associated with Soyang Prime. Total operating expenses were RMB 241.3 million, down .8% -over-year. Sales and marketing expenses were RMB 131.3 million, down .7% -over-year, primarily due to the decrease of payroll costs. GNA expenses were RMB 78.8 million, up .3% -over-year, primarily due to an increase in payroll costs associated with the expansion of administrative employees to support our business upgrades and the new strategic businesses. RMB expenses were RMB 31.2 million, down .6% -over-year, primarily attributable to improvements in staff efficiency. Income tax expenses were RMB 1.9 million, compared with the income tax benefit of RMB 2.6 million in the same period of 2024. Net loss, attributable to Soyang International Inc, was RMB 36 million, compared with net income, attributable to Soyang International Inc, of RMB 18.9 million during the same period last year. Non-GAAP net loss, attributable to Soyang International Inc, was RMB 30.5 million, compared with non-GAAP net income, attributed to Soyang International Inc, of RMB 22.2 million during the same period of 2024. Basic and diluted losses per ADS, attributable to ordinary shareholders, were RMB 0.35 and RMB 0.35 respectively, compared with basic and diluted earnings per ADS, attributable to ordinary shareholders, of RMB 0.18 and RMB 0.18 respectively, during the same period of 2024. We have maintained a robust cash position with cash and cash equivalent, restricted cash and term deposits, term deposits and short-term investments, totaling RMB 998.6 million as of June 30, 2025. Moving to our outlook for the third quarter of 2025, we expect aesthetic treatment service revenues to be between RMB 150 million and RMB 170 million, representing a 230.5 percent to 274.6 percent increase from the same period in 2024. This outlook reflects the ongoing ramping up of our branded aesthetic center network as we progress towards our year-end target of 50 centers. With AmbleCash reserves and a demonstrated check record of execution, we are now entering into the next phase of growth with increased confidence for the future. As we scale and strengthen the influence of our aesthetic center network, we will continue to refine its standardized model to further enhance operational consistency and efficiency while establishing a robust base for recurring revenues. These efforts will reinforce our cost advantages, solidify our industry leadership and create durable long-term value for our shareholders. This concludes our remarks. I will now turn over the call to the operator and open the call for QA. Operator, we are ready to take questions.

We will now begin the question and answer session. To ask a question, you may press star, then 1 on your touchtone phone. If you are using a speaker phone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star, then 2. At this time, we will pause momentarily to assemble our roster. The first question today comes from He Jingping with CITIC. My apologies. The first question comes from Nelson Chung with Citibank. Please go ahead. Nelson, your line is open. You may ask your question.

Hello, thank you for answering my question. My question is about the opening plan for the Q&A. Can you share with us your opening plan for the Q&A? What is the current development model? Is there any development plan for the Q&A? Let me translate my question into English. We are particularly interested in the explanation plan of your Q&A. Can you provide any details on what the plan looks like this year and next year? What is the current development strategy for our franchise model? Thank you.

Hello, thank you for your question. We have a clear schedule for the Q&A. By the end of this year, we expect to have 50 stores. Most of them have been completed. In the second half of the year, we expect to have more than 10 stores open. In the key cities, such as Beijing, we expect to have 10 stores open by the end of the year. We will determine the opening plan for the Q&A in the fourth quarter of this year. At present, we believe that the number of stores will not be less than this year. As the organization's ability to improve, our chain network will gradually expand to a broader city model. For a long time, we have strong confidence in chain business. Our goal is to achieve a scale of 1,000 stores in 8 to 10 years.

We have a clear phrase of reach for expanding our network. We aim to build a number of centers to 50 by the end of this year, with a large portion already opened and more than 10 plans to open in the second half. In key cities, such as Beijing, we expect to reach 10 centers by the end of 2025. Next year's expansion plan will be finalized in Q4 this year. Though initially we anticipate new openings will match or exceed 2025 levels, as our organizational capabilities continue to strengthen, our network will gradually expand to a wider range of cities. Long term, with full confidence in our aesthetic center business, we target to achieve 1,000 centers within 8 to 10 years.

Our free store's K-Pass scale is relatively easy to control, and the return period is relatively short. Our current cash reserves are also quite abundant, and we can already support a faster expansion pace. However, as part of the long-term layout, the joining model will play an important role in the future chain expansion. So our plan is to add two to three stores in the fourth quarter of this year. We will then decide on a pace

to expand the store based on the current situation. That said, as part of our long-term strategy, the franchise model will play an important role in future expansion. Thus, we plan to pilot two to three franchise centers in Q4 this year, and we will determine the pace of future franchise expansion based on the operational performance of these pilot centers.

Thank you.

The next question comes from He Jingping with CITIC. Please go ahead.

Hello, I'm He Jingping from CITIC. I have one question about the Chinese aesthetics market. How does the management view of the growth potential of the Chinese metal aesthetics market and in this highly competitive market, how will you adapt to the challenge of the new player entry? That's my question. Thank you.

Thank you for your question. We are very optimistic about the future development of the Chinese aesthetics market. Compared to the international mature market, for example, Korea, its aesthetics penetration rate has exceeded 20%, but in China it is still less than 5%, so it still has a very wide development space. In China, the green aesthetics track we are in is actually compared to the traditional surgical model. We think it is essentially two different models. The development of green aesthetics is faster, and it is easier to occupy the user's mind. According to the statistics of the industry, we can see that by 2030, the Chinese green aesthetics market will be expected to reach 34 billion yuan. According to our estimates, China's green aesthetics penetration rate is expected to reach 30%, and Xinyao, as the leading industry, is expected to achieve a market share of about 25%. The market size is expected to reach 260 billion yuan.

We remain optimistic about the future effects of China's medical aesthetics market. Compared with mature overseas markets, such as South Korea, where the penetration rate of medical aesthetics has exceeded 20%, China's current penetration remains below 5%, indicating substantial growth potential. The large medical aesthetics sector in China represents a fundamentally distinct model versus traditional plastic surgery, as it grows at a faster pace and can capture customer mind share more easily. According to industry data, China's large medical aesthetics market will reach around R&D 350 billion by 2030. Our analysis forecasts that the penetration rate of large medical aesthetics chains in China will reach 30% in the future, and so Yang, as the industry leader, is poised to achieve roughly 25% market share, translating to nearly R&D 26 billion market opportunity.

The large-scale offline chain organization's organizational capacity and market participants have certain limitations in these areas. Because of this, Yang will continue to work around these three capabilities to master the basics and do his own thing, further strengthening our long-term competitive advantage

in the industry. In order to truly succeed as a life medical aesthetic chain brand, three core capabilities are essential. First, sustainable low-cost customer acquisition. Second, -to-side upstream supply chain network. And third, organizational competence in operating a large-scale physical network. Other market players face inherent limitations in these areas. That's precisely why we will continue to focus on our business and hone our fundamental strengths around these three capabilities, further reinforcing our long-term competitive edge in the industry.

Thank you.

Thank you.

The next question comes from Daisy Chen with Hightown International. Please go ahead.

Hello, I'm Daisy Chen. Thank you for your question. First, the company has continued to grow in the second quarter in the online medical aesthetic chain. I would like to ask two questions about cost and cost. First, in the new model, the acquisition cost is a relatively significant advantage. I would like to ask Daisy Chen how she sees the acquisition cost and the marketing cost. The second question is, can you share with me how you see the cost and cost and the future trend of the future of the digital currency? Maybe check my questions into English. In the SOIAC model, the customer acquisition cost is one of our significant advantages. What is the obvious for the customer acquisition cost and the marketing expected in the future? Regarding the cost structure, can management share your views on the future trend of the consumer and share your product structure? Thank you.

Hello, thank you for your question. In the industry, the new model has maintained a relatively good acquisition efficiency. Currently, our average acquisition cost is only a few hundred yuan. The cost of the new model is lower than the current acquisition cost. The share of the new model is over 70%. The acquisition cost of the new model is the base of our city's energy use. It is also the base of our user community. The new model is very good. The conversion rate is much higher than the previous model. This is due to the model of not selling or charging the bank card. The old model is recommended without pressure. The new model is also not charged with a bank card. Soyang

Racks amount industry leaders in customer acquisition efficiency. Currently, our average customer acquisition cost is only a few hundred yuan. With over 70% of new customers coming from low-cost private domain traffic and referrals from existing customers. Private domain customers are the launchpad we use in new cities and serve as a base for user community operations. Our performance in referrals from existing customers is particularly strong. With a conversion rate significantly higher than peers. This is driven by our incentive approach of aggressive sales or prepaid membership card requirements. This allows existing customers to refer without pressure and lowers barriers for new customers. Long term, we believe sustainable low-cost acquisition hangs on accumulated broad influence. As our network starts to develop, we are denser in key cities such as Beijing and Shenzhen. Their penetration rates are consistently increasing. We will launch localized marketing initiatives focusing on high frequency touch points such as subways and cinemas to enhance spread visibility, boost customer awareness, and improve marketing efficiency.

We are looking to launch our products in the 4th quarter of this year. We have the exclusive agency rights for these two products. This means we have the right to define and set up our products. In addition, we expect that in 2026-2027, we will launch two animal-based products with sufficient production rights. We will further increase our supply lines. As our quality of products continues to expand and continue to penetrate the network system, our overall cost-efficiency ratio will further decline. This year, we will launch 50 stores and long-term targets of the same size. The expansion of the network will help strengthen our ability to buy and sell. This will continue to reduce cost-efficiency.

While improving customer acquisition efficiency, we are also optimizing cost structure by increasing the proportion of self-controlled offerings used in our aesthetic centers. For life-based treatments, we offer miracle lasers self-developed and hold exclusive distribution rights for the premium American BBL treatments. With new devices such as picosecond lasers and radio-francois micro-niddling in the pipeline, additionally, after entering the upstream injectable segment a few years ago, we have been collaborating with upstream manufacturers to launch new products, including blockbuster products such as SkinBosters and PLLA. The SkinBosters are expected to receive approval in Q4 this year. Both products carry exclusive China distribution rights, granting us broad positioning rights and pricing power. Furthermore, we expect our two proprietary animal-derived collagen products to gain approval in 2026 or 2027, further enriching our pipelines. And self-controlled products are used more broadly across our network. The proportion of consumable costs will further decline. With 50 centers targeted this year and 8,000 centers long-term goal, the scaling of our network will significantly enhance our bug and power in procurement and drive further reductions in consumable costs.

Thank you.

The next question comes from Jenny Hsu with CICC. Please go ahead.

Let me repeat in English. In traditional aesthetic centers, we believe both doctors and center managers play very important roles. As in our aesthetic centers, with the network expanding, do we expect any bottlenecks when recruiting doctors in the future? Do we rely heavily on center managers? Thanks a lot.

Thank you.

Regarding doctors, there are about 40,000 doctors in China's medical aesthetic sector. And we continue to see doctors moving from public hospitals into these centers. This forms a solid base for our talent pipeline. We focus on life medical aesthetic services, where technical requirements for doctors are easier to standardize. Newly recruited doctors can accumulate extensive practical experience in a short time, and are quickly brought up to speed. Meanwhile, we are committed to building a high-quality team. All of over 130 full-time doctors have either completed internships or standardized training at public hospitals, and nearly 90% of them are specialized in dermatology. We have established a tiered diagnosis and treatment system that matches treatment to doctors based on their level. We are also building regional training centers to provide structural support for their professional growth. Coupled with benefits such as two-day weekends for social insurance and housing fund coverage, and transparent clear paths, SoYang remains a highly attractive choice for doctors. Turning to center managers, our organizational structure naturally reduces reliance on center managers. We operate on an online appointment booking and onsite service verification model. Center managers mainly handle onsite management. We access them primarily on operational metrics such as safety, customer experience, and consultation efficiency. Management, marketing, product management, pricing, and recruitment of doctors and nurses are handled by our dedicated center operations platform. This greatly improves -to-day efficiency at each center. We have also built a digital dashboard that enables headquarters to monitor center operations in real time. Going forward, we will continue to enhance the maturity of digital management to further reduce management costs.

Thank you.

Thank you.

The next question comes from Yi Bingli with Hytone. Please go ahead.

I would like to ask about the planning of products and operations. I would like to ask about the future of youth clinic and what is different about the planning and strategy of the product and operation. Let me translate myself. Congratulations first for achieving high quality growth in the authentic center business. And I would like to ask what factors will differentiate Soyang's product strategy and planning from others in the future. Thank you.

Our product strategy focuses on anti-aging treatments, with all treatments developed around the core theme to ensure consistency across our entire portfolio. Unlike some institutions that use low-priced single products to attract customers and then sell to more profitable ones, we emphasize overall cost effectiveness. We make sure each treatment delivers a healthy growth margin and don't rely on loss-making products to attract customers. We continue to advance our blockbuster strategy. The goal is to have a small number of core treatments contribute most revenue. We focus on the treatment level rather than individual products. Our approach is similar to Sam's club curated by the seller model, where only the very best options are selected to drive strong repeat business and positive word of mouth referrals. We

will continue to optimize our

product portfolio and dynamically adjust its table style. We will closely monitor change in market demand and competitive trades, as well as new product RFC and launch dynamics. This approach will allow us to introduce new products that address customer demand in a timely manner and have strong market potential to maintain our leading position.

Thank you.

The next question comes from James Zhang with Dawson Securities. Please go ahead.

Hi, hello ladies. James Zhang from Hua Fu Securities. My question is, in addition to your aesthetic center business, we are also very interested in your POP business. Can management provide any updates on future development plans for the POP business? Hi, ladies. I am James Zhang from Hua Fu Securities. In addition to our aesthetic center business, we are also very interested in the development of our online platform. Can management provide any updates on future development plans for the POP business? Thank you.

Hello, thank you for your question. POP business has always been a business that has been very strong and has a high level of experience.

Our POP business has always been a business with relatively high growth margins and net margins. While revenue has fluctuated this quarter, it remains a capillary of the group's profitability. We will maintain a strict cost-benefit balance between the POP business and the net margin. We will continue to

expand our POP business. We will actively promote the cooperation between the POP and the net margin business. The offline network has brought us a lot of high-quality traffic, including new users who have received new services such as old-age, new apartment, new hair. This part of the user will also have some unorthodox needs such as surgery, micro surgery, etc. While some users receive standardized clean and beauty services at the Xin Yang Youth Clinic. Therefore, we plan to establish a more detailed business classification rating mechanism on the platform. Combine the user's behavior and preference, and recommend the user to a high-quality POP business.

As our aesthetic center network continues to expand, we will actively promote synergies between the POP and aesthetic center business. Our aesthetic centers drive a large volume of high-quality traffic, including new customers acquired through referral programs and public domain traffic. While these customers receive standardized light medical services, we will also provide a wide range of services. We also provide a wide range of services for the medical aesthetic services at Xin Yang Youth Clinic. They also generate amounts for non-standardized surgical and minimally invasive procedures. We plan to establish a more refined merchant classification and rating mechanism on our platform. By leveraging user behavior and preferences, we will be able to make targeted recommendations for high-quality POP merchants. This will improve traffic monetization efficiency and create new incremental growth for the POP business.

Thank you.

This concludes our question and answer session. I would like to turn the conference back over for any closing remarks. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.