So-Young International Inc.

Ladies and gentlemen, thank you for standing by for So Young's fourth quarter and full year 2025 earnings conference call. At this time, all participants are in the listen-only mode. After management give 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 meeting over to your host for today's call, Ms. Mona Chow. Please proceed, Mona.

Thank you, Operator, and thank you, everyone, for joining Suyang's fourth quarter and full year 2025 earnings conference call. Joining me today on the call is Mr. Jinxing, our founder, chairman, and CEO, and Ms. Zhang Xia, VP of Finance. Before we begin, please refer to the September statement in our earnings release, which applies to this call as we'll be making for the local statement. Please also note that We will discuss non-GAAP measures today, which are more thoroughly explained and reconciled to the most comparable measures reported under GAAP. We have an early introduction on our investor relations website and findings with SEC. Please also note, all fingers mentioned in this call are in the movie, or as otherwise stated. At this time, I'd like to turn the call over to Mr. Yingxin.

Hello, everyone. Welcome to today's press conference. In the year of 2025, China's medical industry will undergo structural adjustment. The supply and demand of oil continues to grow. Consumers need to be rational. The return of value is becoming the common theme of the entire industry. For institutions that insist on the standardization and standardization of the route, this is exactly the window period for accumulating long-term advantages. In the fourth quarter, Xinyang continues to expand its investment and steadily advances in three directions. continue to realize the size of the joint business breakthrough and increase the efficiency of the business, continue to deepen the medical care ability, and build a long-term supply chain that is self-motivating. Continue to strengthen the supply chain, increase brand influence, and grasp market opportunities. We are very happy to see that these three choices are also reflected in the financial data. In the fourth quarter, the company achieved a total income of 4.6 million yuan a month, The growth rate is 25%. The company's record income is historically high. The company's business income is 2.48 billion yuan. The company's growth rate is more than 205%. It is about 10% above the last line. The company's business has become the first major income source of the group and the core growth engine. Xinyang Youth Institute has also become the largest youth institute in China.

In 2025, China's medical aesthetic needed treatment through structural adjustment as upstream capacity expanded and consumers become more value-driven. Return to value has become the common theme. For institutions pursuing scaled and repeatable models, this offers a critical window to build a long-term edge. In Q4, we continued to improve our investment and make progress in three directions. First, delivering steel breakthroughs and operational improvements in our aesthetic center business. Second, reinforcing medical service delivery capabilities to build a long-term transcriber mode. And third, building on supply chain barriers to enhance driving loans and safe opportunities. We are pleased to see these choices are reflected in our financial results. The total revenue was $461 million, at around 25% year-over-year. taking a record high for quarterly revenue. Revenue from our aesthetic center business reached $248 million, up over 205% year-over-year, and about 10% above the high-end of guidance. Our aesthetic center business has become our largest revenue-contributing segment at Goose Engine, with Soyang Clinic becoming the largest live medical aesthetic chain in China by a number of centers.

Now, let me walk you through our progress in Q4 and our 2026 deployment, focusing on our aesthetic center business. 第一,联手业务的规模突破与运营深化。 联手业务近期完成了两项重要里程碑。 第一是门面规模,截至2025年底, At the end of December, the number of active users exceeded 170,000. Our aesthetic center business has recently achieved two milestones.

The first is our center food point. By year 2025, we have opened 49 live medical aesthetic centers, ranking third nationwide among all tiers by finger count. The second is the treatment volume. In Q4, verified treatment visits exceeded 125,000, up 178% year-to-year. Verified aesthetic treatment performed exceeded 289,400, up 158% year-to-year. As of December end, our total active users surpassed 170,000. The growth in both treatment volume and user base validates the market's demand and ongoing recommendations from consumers.

微博之外,门店运营效率也在稳步提升。 四季度,25家门店实现电端引力, 39家门店在第四季度实现了现金运为正。 进入2026年,我们将进一步加快扩张步伐。 计划年内新增不低于35家门店。 At this scale, center-level operational efficiency continues to improve.

In Q4, 25 centers achieved profitability. and 13 new centers generated positive operating cash flow. In 2026, we will accelerate the expansion, opening at least 35 new centers. We will deepen density in core cities, including Beijing, Shanghai, Guangzhou, and Shenzhen, while also expanding our presence in secondary cities. As our operations mature, we are confident in further improving the performance of the facility while maintaining expansion and driving the overall performance of the facility at an early date.

Second, we continue to deepen the ability of the medical service to build a long-term interoperability of trust. Fourth, we continue to improve the ability of the medical service to build a long-term interoperability of trust.

Second, we are enhancing our medical service delivery capability to build a long-term trust-driven mode. In Q4, we enhanced our service across three dimensions, physician team, compliance framework, and data security. This improvement reinforced the user trust.

Since the end of 2025, the full-time medical team of Xinjiang Youth Hospital has expanded to 211, and has grown by 41% since the end of the third quarter. The number of doctors is the number one in the country. In terms of quality, all of our doctors have a public hospital background. And through strict internal standardization operation certification, they can enter the industry. Doctors with organizational doctors and above are now over half. The average number of doctors in the team is more than six years. More than 6,200 doctors in Xinyang's Renjun Hexiao Service Area are employed in a year or more. It highlights the team's solid clinical ability and high-standard medical skills. In 2026, we will launch the New Medicine Start-Up Program to accelerate the recruitment and preparation of medical talents. This program will provide doctors with first-class practical training opportunities, systematic skill training, and clear career development skills, helping doctors grow quickly to the top of the industry. to improve the professional ability of the medical team and the reputation of the users. The growth of single-person production will be stable, and it will drive the level of capacity to continue to optimize. In terms of the regulatory system, we have established a six-level regulatory system and a standardized risk inspection mechanism. With digitized management methods, medical delivery can be carried out and the whole process can be followed. In terms of user data security, XinYang has become the first

By year end 2025, our full-time physician team expanded to 211, up 41% from the end of Q3, recognizing first nationwide among our peers by physician count. In terms of quality, all our physicians have a public hospital background and passed our regular internal certification before practicing. Over half of them hold attending physician qualifications or higher. On average, our team processes over six years of clinical experience, and those maybe a year or more and so young have delivered over 6,200 treatments per physician. reflecting our solid clinical capabilities. In 2026, we will launch a new physician initiative to accelerate recruitment and build a talent pipeline. The program will provide industry-leading hands-on practice, systematic training, and clear paths, enabling physicians to quickly achieve top-tier performance. As our physician team's expertise deepens and user word-of-mouth grows, we expect Her position productivity is growing, driving continued improvement in profitability. On compliance, we established a six-tier compliance framework and a regular inspection mechanism. With digital software, we deliver full-process traceability of medical services. On data security, Soyang is the first in the industry to obtain the PIA certification, setting a benchmark for the industry.

Our ongoing investments are reflected in users here.

Call numbers have a close to the purchase rate of 80%, and their average earnings spending is around 60,500. The growing user trust is the foundation of our low-cost, sustainable growth.

Third, continue to build supply chain barriers, improve brand influence, and grasp market opportunities. Over the next four seasons, we have 18 domestic top-end upstream equipment suppliers, with a total of nearly 1,400 equipment purchases. Zengji has 42 top-end upstream box partners, with a total of more than 700,000 purchases. We continue to increase the supply chain supply capability But we will continue to build on our supply chain, enhance supply influence, and save market opportunities.

As of Q4, we worked with 18 top-tier domestic suppliers and had procured nearly 1,400 devices for injectables we have 42 top-tier upstream partners with a cumulative procurement of over 700,000 units. In 2025, the upstream supply expanded sharply. The NMPA issued over 50 certificates for class-grade medical devices, up over 60% year-over-year. For Soyang, this delivers a broader product portfolio, more durable procurement costs, and enhanced user experience. Backed by the China's largest life medical aesthetic chain, we continuously enhance our supply chain layout capabilities. We have also built long-term partnerships with core suppliers and established a volume price linkage mechanism, securing the industry's best tier procurement prices.

It has further reduced the standard of consumption of consumers. At the same time, the injection-based transparent acid-soluble solution produced by our exclusive agent, Xihong Medicine, is officially listed in domestic goods and services, and it has further enriched the product base of Xinyang in the long-term management channel of skin. In terms of BBL products, we have further increased the brand influence and user transformation through IP links and immersive experience activities. In the fourth quarter, we joined forces with Little Prince IP to build the Youth Planet Hu Laoguang, the main marketing event. The event covers new experiences, fast-spinning events, and small red book blogging, etc. The fast-spinning event has reached about 2 million people offline. The small red book platform has a total exposure of more than 14 million. Successfully realized the efficient link between online heat and offline experience. It has further strengthened the brand system of Xinyang Youth Institute, and at the same time, it has promoted the sales transformation of the main product, DDL, and realized the union of the product and sales. This series of product replacements, new product layout, and brand marketing actions are the implementation of our continuous promotion of the large single product strategy. In the fourth quarter, the four large single products performed brilliantly for a period of time, and the income ratio reached more than 37%, which achieved a steady growth.

On our product layout in Q4, we launched a lighter version, Miracle PLLA version 3 printing, which lowers the customer's barrier to trail. We are also the exclusive distributor of Xihong Biopharma's HA solution, now approved for marketing in China, which expands our portfolio. For BDL treatments, we improved flag influence and conversion through IP co-branding and immersive experiences. In 2004, we partnered with Little Prince IP and launched the Youth Planet Timeless Radiance campaign. The campaign leveraged multiple channels and formats, including celebrity treatment experience, pop-up events, and in-store visits by bloggers on Red Note. Our pop-up events generated about 2 million outside visits, and total exposure on that note exceeded 14 million. This online and offline synergy reinforced our blood awareness and delayed sales conversion for BBL, aligning blood building with revenue. Our product integration, new product launches, and market activities reflect our commitment to the blockbuster strategy. In Q4, these blockbuster projects delivered strong results, contributing over 37% of revenue with sequential growth. and remain a core engine for our eclectic center business.

At the same time, our brand influence has also been fully verified in the offline scene. Currently, Xinyang Qingfeng Institute has successfully invested in Beijing Heshenghui, Guangzhou Environmental Center, Hangzhou Home Center, Jinan Henglong Square, and other high-end shopping centers across the country. Our high-quality offline display scene has also boosted the market share of the brand, and has also accurately reached the core customer group for the store.

Meanwhile, our branding groups have been fully validated in offline scenarios. To date, we have successfully established a presence in high-end shopping malls nationwide, including Beijing Hubsan One, Guangzhou ICC Mall, Hangzhou Carry Center, Jinan Honglong Plaza, and so on. These premium shopping malls reinforce our brand recognition and help us reach target customer groups.

Finally, let's talk about our vision for the future. With the development track gradually returning to rationality and quality, the value distribution of the entire industrial chain is being rewritten. We believe that those who will truly master the power of industry in the future will be those who are closest to consumers and the most reliable institutions. In 2026, it is the year of the strategic transformation of Xinya. Our core issues will shift from the priority of scale and efficiency. What we need to do is not only to keep the power on, but also to prove that this model is capable of expanding. Over the past two years, we have accumulated systematization capability, which makes us full of confidence. But our pursuit is not only this. When the door-to-door network supply chain and medical delivery form a non-powerful effect, we have the ability to continuously reduce the consumption threshold Finally, let me share our outlook for the future.

As industry gradually shifts back to a rational, quality-driven path, value distribution is being reset. We believe that in the long run, the industry will be laid by the closest consumers and capable of delivering the most trusted services. But so young, 2026 is a turning point. We are moving from Salesforce to a door engine of sales and efficiency. Our aim is not only to open centers, but also to prove the model is profitable and really expands. Our systematic capabilities over the past two years give us great confidence But our ambitions could be on that. As our center network, supply chain, and medical service delivery create a by-will, we will lower access barriers and let more consumers enjoy safe, transparent, and inclusive services while delivering sustainable returns to shareholders. We believe companies that create real value will earn long-term recognition from the markets.

Now, I'll hand it over to our VP of Finance, Ms.

Zhang Xia, to walk through the financial results, followed by the Q&A session.

Thank you, Xi, and thank you, everyone, for joining us today. I'm Xia Jiang, Vice President of Finance. On behalf of our CFO, I will walk you through our fourth quarter 2025 operating and financial results. For additional details on our fourth quarter and four-year performance, please refer to the earnings release we issued earlier today. Unless otherwise noted, all amounts are in IMB. 2025. marked a transformational year for Soyang. The rapid scaling of our branded aesthetic center network fundamentally reshaped our business profile, and we are pleased with where we are today. Total fourth quarter revenues reached $460.7 million, up 24.8% year over year. This was driven by continued expansion of our branded aesthetic center business. Our cash position stood at $936.4 million, providing solid runway to fund our expansion plans while preserving financial flexibility. Let me now walk you through performance by business segment. Our branded aesthetic center business sits at the core of our growth. With our platform and upstream supply chain businesses serving as complementary businesses, aesthetic treatment services reached $248.1 million, up 205.3% year-over-year. This has been our largest revenue segment since Q2, and this quarter it crossed the 15% revenue contribution threshold for the first time. Also, this marks our third consecutive quarter of exceeding the high end of our segment guidance. This strong performance was driven by both continued As of December 31st, we operated 49 Soyoung clinics across 15 major cities, reflecting a net addition of 10 centers during the quarter. Now, breaking down revenue by center development phase. Our 17 mature phase centers generated 142.5 million in revenue, or roughly 8.4 million per center. Our 19 growth phase centers contributed 89 million, Notably, average revenue per center nearly doubles as centers progress from growth phase to maturity. With 19 centers currently in the growth phase, we see a clear built-in revenue growth driver as these centers continue to mature. As for their profitability, 25 centers achieved profitability during the quarter, including 16 mature phase centers. 39 centers generated positive operating cash flow. As centers moved through their development cycle, profitability has consistently followed. This gives us confidence in the financial trajectory of our newer centers. Turning to other segments, information and reservation services revenues were $125.7 million, down 26.8% year-over-year, platform. Sales of medical products and maintenance services revenues were 69.3 million, down 19.9% year-over-year, primarily due to a decrease in the order volume for medical equipment. Other services revenues were $17.7 million, down 40.7% year over year, primarily due to a decrease in revenues from Soyoung Crime. I will now walk you through our financials below revenue in more detail. Cost of revenues. year-over-year. Cost of information and reservation services was 10.1 million, down 50.6% year-over-year. Cost of medical products sold and maintenance services was 41.6 million, down 4% year-over-year. of 2024. Excluding the impact of goodwill impairment charges in both periods, solo operating expenses increased moderately year-over-year, reflecting continued investment in scaling our aesthetic center business. Sales and marketing expenses were $168.7 million, up 25.8% year-over-year. This was primarily driven by branding and user acquisition investments. were $101.9 million, up 3.5% year-over-year, due to the business expansion of the branded aesthetic centers. R&D expenses were $37.4 million, down 12.4% year-over-year, due to improved staff efficiency. We also reported an impairment of goodwill and long-term assets charge of $19.7 compared with 53.2 million in the same period of 2024. Basic and diluted loss per ATS improved to 1.08 compared with 5.9%. of December 31, 2024. The decrease primarily reflects our accelerated investment world expansion toward balancing growth with profitability improvement. We plan to add no fewer than 35 new centers in 2026 while leveraging our expanding skill to improve growth margins and drive efficiency gains across the network. This concludes my remarks. Operator, we are now ready for the Q&A session.

Thank you very much. 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're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star, then 2. At this time, we will pause momentarily to assemble our roster. If you would like to state your question in Chinese, do so, but then please also restate your question in English. Our first question comes from Jinpeng He with City Securities. Please go ahead.

Hello, everyone. Thank you for the opportunity. I am He Jingpeng, the interpreter of Meizhuang Shanghai Group. First of all, I would like to congratulate the company. We have seen a rapid growth in the number of businesses in Q4. We have also seen a rapid rise in the number of services in Q4. Let me briefly translate myself. So thank you for taking my question. I'm Jing Peng He from CTXCritics. So firstly, congratulations on the accelerated growth in Q4, and we are glad to see that there is improving growth margins in the static center business and service business. So, I have a question regarding the gross margin prospects. So, could you share more about the gross margin plans and source of further margin extension?

Thank you. Thank you for your question. In general, we think that the core factors that affect the performance of joint labor are three main aspects. They are the rhythm of the opening of new stores in the quarter, the cost of spending, and the seasonal cancellation. For the above factors, we have developed a clear energy-efficiency improvement plan. First, continuous optimization of the operating rhythm and the efficiency of new power supply. The intensive investment of new power supply will have a gradual impact on the energy efficiency. From the characteristics of the industry, the operating rhythm of each clinic has its own uncertainties. In the future, we will strive for a relatively balanced year-round operating rhythm, to ensure that each new power plant can rely on standardized operating systems to quickly enter a stable operating period. To shorten the break-through period, the number of newly opened power plants that we planned in 2026, compared to the total number of power plants, decreased last year. This will directly reduce the interference of new power plants' concentrated investment in the current labor. At the same time, the comparison and contribution of mature power plants will be further improved. Thank you for your question.

They believe that three core factors shape margin performance. The pace of central openings, consumable costs, and seasonal promotions. Based on these factors, we have a plan to enhance those margins. First, we will continue optimizing the pace of central openings and the ramp-up efficiency of new centers. Up-front investment into new centers can create short-term margin pressure and license approval timing in our industry is often unpredictable. Going forward, we aim to adopt a more even cadence throughout the year. Combined with our integrated operating system, this accelerates each center's path to efficient operations and shortens the run-up cycle. For 2026, new opens will represent a smaller share of total centers compared to last year. This will reduce margin dilution of concentrated new center investments. Meanwhile, the proportion and profit contribution from mature-free centers will rise, driving the overall growth margin levels.

Second, continue to optimize the cost-benefit structure. Currently, we rely on Xihong, Kangze, Sihuan, Shota, and other upstream enterprises to establish deep cooperation, while ensuring supply and supply, and achieving continuous optimization of purchase costs. In the future, we will continue to magnify the mid-range size advantage, strengthen the upstream price capability, and transform more high-end upstream manufacturers into long-term cooperation partners. At the same time, we will continue to advance the large single-product strategy. In the fourth quarter, the income of the four large single-products is over 37%. As the size of core products continues to expand, the purchase cost advantage will be further highlighted. Third, the economic, institutional, and seasonal sales and operations. Seasonal sales and operations are an important way for us to expand the size of our users, achieve new customer transformation, and generate long-term user assets for our stores. In the future, we will continue to optimize the sales and marketing structure, and renew the sales and membership system. Second, we will optimize consumable costs.

Currently, we have built deep collaborations with upstream partners including Xihong Biopharma, China Medical System, Sihuan Pharm, and Sota Medical. This guarantees reliable supply and ongoing cost optimization. Looking ahead, we will strengthen bargaining power with our partners and convert more high-quality F3 manufacturers into long-term partners. At the same time, we will continue advancing our flow faster strategy. In the fourth quarter, our four major products accounted for over 37% of revenue, as I will call offerings growth. the procurement cost benefits will become more pronounced. Third, we will refine our seasonal promotion. Seasonal campaigns remain a critical channel for user-based expansion, customer conversion, and building long-term user assets. Going forward, we will optimize our product mix and integrate campaigns more deeply with the membership system, targeting repeat purchases among core members. We aim to transform short-term traffic into customers' LTV. In return, we also add growth margin.

Thank you. Thank you.

Thank you. Your next question comes from John Wong with GF Securities. Please go ahead.

各位领导,大家好。 我是广发证券PM社服组的张旺。 非常感谢管理层提供这次提问的机会。 也恭喜公司取得如此亮眼的业绩表现。 我在这里想和管理层请教一个问题。 其实我们一直都在持续关注二线城市的新样青春诊所的发展。 This is Zhang Wang from Guangfa Securities. Thank you very much to the management of giving me this opportunity to ask a question and congratulations to the company on this outstanding performance. My question is about the development of Soyang Clinic in second tier cities. and I would like to know whether the current operating performance of these centers has met management's expectations. Could management also share some operational updates on the several representative centers?

Thank you.

Sorry to interrupt ladies and gentlemen, the line for the management has been disconnected.

Please stay connected while we reconnect the line for the management. Thank you.

Thank you for patiently holding, ladies and gentlemen. The line for the management has been reconnected. Yes, please go ahead.

不好意思,刚刚断线了,继续回答。 从行业视角来看,中国二线城市虽然与美市场发展相对成熟, But compared to the first-tier cities, the difference in medical interaction ability and operating level is very large. And Xinyang's standardized interaction ability ensures that second-tier cities' electricity can provide equivalent medical quality and service experience to first-tier cities. From our operating experience and results, second-tier cities' electricity overall presents a good growth trend. Customer flow size and number of human resources projects are growing steadily. Single service point income is close to first-tier cities. In December, the average cost of two-storey stores such as Wuhan Tianbi Store, Changsha Dexing Store and other two-storey stores is around 7,000 yuan. From the recent two-storey stores, Ningbo Life City Store, Shuzhou Shuyue Square Store and other stores are outstanding. The income of these stores is very good. The average annual recovery growth rate has reached the industry leading level. Within three months, the revenue of ShuZhou's ShuYue Square Store has exceeded one million yuan. This fully verifies the feasibility of our copy model in the second-tier city. From the point of view of the operating capacity of the second-tier city, due to the low salary and rent level of the first-tier city, the profitability of the second-tier city store is even slightly higher.

From an industry perspective, while China's medical safety markets in second-tier cities have reached relative maturity, they lack behind third-tier cities in medical service delivery capabilities and operational standards. We ensure that our centers in second-tier cities deliver the same level of medical service quality as those in first-tier cities. Based on our operational track record, centers in second-tier cities are also growing well. both the traffic and per-customer treatment are rising, and the revenue per center is close to first-tier levels. As of December, motor centers in second-tier cities, such as Wuhan Tianbi Center and Changsha Dousijing Center, generated an average sales per square meter of 7,000 per mile. Among new openings in second-tier cities, Nianbo Raffle Center and Suzhou Suzhou Plaza sold out, These centers have attained robust revenue growth with industry-leading figures. For example, Suzhou Studio Plaza broke one million in monthly revenue with three months since opening, proving that our model works in second-tier cities. In terms of profitability, mature centers in second-tier cities enjoy slightly higher margins due to lower staff payroll and rental expenses compared to the first-tier cities.

We believe that the essence of the chain is to reduce the cost of trading and increase the reliability by relying on size and variability. Currently, the second-tier cities are all single-storied, and there has not been any change. From the perspective of the development trajectory of the first-tier cities, as the brand's profitability increases, consumers will tend to do more projects every time, and the corresponding number of people-to-people consumer projects will gradually increase. We believe that the fundamental advantage of a chain model

transaction costs, and enhanced live trust sales skill and accessibility. At present, most players in second tier cities are single central operators without meaningful density. Based on how we moved in first tier cities and still have live trust growth, customers will tend to purchase multiple treatments per visit. Looking ahead, we believe the process improvement, resource synergy, and traffic management will drive continued gains in our second-tier centers. And economics of scale will take effect across our network. We are confident that this will lead to stronger profitability and market competitiveness in second-tier cities. Thank you.

Thank you. Thank you, Director. thank you

Hi Maggie, can you hear us?

Maggie, your line is unmuted.

Please proceed with your question. 我们26年在货客这个方面的策略。 And let me translate my question. This is Maggie Huang from CICC. Congratulations for our excellent performance. And we would like to know whether the competitive advantages in customer acquisition costs has been maintained amid its continued scaled expansion. And could management also share the customer acquisition strategy for 2026? Thank you.

I see your question. As the scale continues to expand, our customer cost advantage has not only reached its limit, but also continues to improve. This quarter, we have newly opened a corner store to catch up with large companies such as Double 11 and Double 12. The number of new users is relatively new. On an annual average, our customer cost is still under 10% of the income. This is a very competitive level in the industry. The reason why we can maintain this advantage is mainly due to the continuous improvement of our old and new model. In the future, we will further strengthen the performance of the old and new model. Through member systems and differentiated power design, we encourage more new customers with high-value users. This not only reduces the cost of customers, but also increases the quality and storage power of new customers. Next, we will continue to optimize the structure of the customer channel Through economic operations, we will increase the value of the user's life cycle. At the same time, we will continue to build a link with the world's top IPs. Recently, we have landed a people's project with Little Prince and Disney, two well-known IPs. With the creation of a new brand, we will reach a wider consumer community. We will build a deep emotional resonance with consumers, and further expand the brand effect. Our edge in customer acquisition costs has been preserved and further strengthened.

During the quarter, we opened a significant number of new centers and seized the opportunities brought by major shopping campaigns. including double 11 and double 12, bringing a quarterly record for new customers. For the full year, our average tax remains below 10% of revenue, a highly competitive benchmark in this industry. We sustained this advantage primarily through our customer referral model. Through our membership system and differentiated benefits, we will incentivize existing high-value users to reform new customers. This will not only lower tax, but also improve the quality and retention rate of new users. Second, we will continue to optimize the mix of our public and private domain customer acquisition channels and enhance their LTV through refined operations. Meanwhile, we will continue to roll out co-branding initiatives with the world's top IT, Recently, we launched co-branding programs with two renowned IPs, The Little Prince and Disney. Through black storytelling, we reached a broader customer base and resonated with users emotionally, further amplifying our black appetite. As our footprint expands and user base grows, we anticipate further reductions in tech. Thank you.

Thank you.

Thank you.

Thank you. Your next question comes from the line of Daisy Cheung with Haipong International.

Please go ahead. Thank you, Director. This is my question. I would like to ask about the growth and operation of our users, especially core users. I'll translate myself. Thank you, Benjamin, for taking my question. My question is about the user goals and the membership operations, especially for core members. Could Benjamin share the specific measures you will take to improve the LTV of core members going forward? Thank you.

感谢你的提问。 关于核心用户的情况呢, We see that the core members of L3 and above are still maintaining a very good growth trend. From our multi-task user survey, we found that L3 plus core users still have a larger annual budget. This provides us with a good foundation for improving user LTE. In this quarter, the income contributed by L3 and above members and the quarterly repurchase rate exceeded 80%.

For our core members, Level 3 and higher members continue to show solid growth momentum. Our user surveys show that core members still have significant room for growth in their annual medical aesthetic budget, laying a foundation for us to boost user LTV. This quarter, value contribution from core members and their quarterly The purchase rate both exceeded 80%, with new co-members surpassing 14,000.

With the increase in user efficiency and professionalism, in 2026, we will launch more product proofs, create standardized scientific joint treatment programs, continue to enrich high-end medical products, and fully enhance service experience and business value. At the same time, we will continue to optimize the member system, provide differentiated rights and service access to core customers at different stages of consumption, and help core customers to continue to feel the value of the brand and get positive feedback through precise user division and individualized service, thereby increasing the scalability and consumption frequency, thereby promoting the improvement of single-sale profitability, and continue to develop the company for a long time.

Consumer performances are shifting towards the sequencing and clinical capabilities. Against this background, we will focus on first expanding our product portfolio. We will introduce more comprehensive product offerings, including standardized size-backed treatments and needs to high-end services. We expect this to elevate user values. Second, we will further optimize our membership system by offering differentiated benefits and service touchpoints, so as to realize tiered user segmentation and provide corresponding services. This will strengthen co-members' perception of our Black venue, building a positive feedback loop, which will drive their loyalty. These measures will lead to improved percent of profitability and provide strong momentum for our long-term growth.

Thank you.

Thank you. This concludes our question and answer session, and this concludes our conference for today. Thank you for attending today's presentation. You may now disconnect.