Thank you, operator, and thank you, everyone, for joining So-Young's fourth quarter and full year 2023 earnings conference call. Joining today on the call is Mr. Xing Jin, our Co-Founder, Chairman, and CEO; and Mr. Nick Zhao, CFO. Please note that the discussion today will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities and 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 outlined in our public filings with the SEC, including our annual report on Form 20-F. So-Young does not undertake any obligation to update any forward-looking statements, except as required under applicable law. At this time, I would like to turn the call over to Mr. Xing Jin.

Hello, everyone. Thank you for joining the call today. Despite the challenging market conditions, our business remained resilient as the new ventures we are developing continue to demonstrate significant growth potential. Total revenues increased by 20.1% year-over-year to RMB390.6 million during the quarter. Our legacy business reflected in revenues from information services and others increased by 15.8%, while new business reflected in revenues from sales of medical products and maintenance services increased by 50.6% during the quarter. By carefully managing cost, we regained profitability with net income attributable to So-Young International Inc. of RMB31.3 million in 2023, a significant turnaround from net loss attributable to So-Young International Inc. of RMB65.6 million last year. In many ways, last year presented an even more challenging situation than the COVID-19 pandemic did. In this context, our financial results for the year are even more impressive and a testament to our strength and adaptability in the face of evolving consumer behaviors and market practices. Looking back at 2023, it's evident that our differentiated strategy was key to maintaining stable growth. While e-commerce platforms and short-form video platforms prioritized the pricing of products to attract budget-conscious low-to-mid-tier users, we prioritized premium service to attract high-tier users seeking quality services. This segment represented only 13% of frequent users but drives 51% of market volume. We've consistently maintained a strong competitive advantage with this segment, given our premium products and services. Throughout the year, we further strengthened this advantage by offering high-tier users the personalized services they required for high-quality procedures, which also drives profitable support for the partner institutions we collaborate with. Moving forward, we remain committed to this strategy as we build stronger relationships with more collaborative doctors and institutions. So-Young Prime made significant progress throughout the year with over 200,000 clinic visits facilitated, generating over RMB100 million in revenues for partner institutions. This translates to significant user acquisition cost savings of roughly RMB140 million. To further optimize our model, we piloted operations for a chain of clinics by establishing a model mix for light medical aesthetics procedures on the second floor of our headquarters last summer. The results have been impressive. These clinics have experienced exceptional growth with steadily expanding margins and monthly revenue increasing 13.8x during the second half of this year, a CAGR of 71%. Equally important, they hit breakeven in only 3 months of formal operations. Building on this success, we are now actively expanding our network by transforming partner institutions into a chain of clinics. Several are already under construction, with the first ones already operational. We plan to open clinics in 6 to 7 cities throughout 2024 and will explore franchise opportunities in the latter half of this year. Our supply chain business also continues to create opportunities for us by leveraging synergies with our other businesses to expand upstream around the medical aesthetic supply chain, distinct from the traditional upstream R&D production supply chain model used by manufacturers. We are able to add further value by leveraging our institutional network and enhancing consumer reach. This allows us to support emerging trends and quickly bring new products to market while rapidly making them competitive. To date, we have 7 injectable products available on the market, 1 R&D center, and 2 robust production lines. We approach each relationship with care by adopting a cautious and safe approach. Developing a healthy market for our products is key to long-term sustainability and pricing power. Our cooperation with the Korean brand, Elravie, is a perfect example. We positioned their hyaluronic acid program as a mid-market product, and through the careful selection of partner institutions, we distributed to gross sales significantly last year. Shipments of this product increased nearly 600% with over 120,000 medical injections sold so far. More than 750 select partner institutions also benefited from this, with 500 of our core institutions seeing revenue increases of 20% last year as a result. A single SKU can generate revenue of RMB2 million for them in one campaign. We plan to add a new Elravie product to our portfolio this year and explore other opportunities in the anti-aging category. Our current portfolio of 7 products addresses demand across various segments within the highly demanded collagen categories. Building a strong upstream presence along the medical aesthetics supply chain requires strategic investment and lead time. Through 3 years of focused efforts, we have built stronger synergies between our product development pipeline, sales team, and our platform. As we secure additional product certifications, we are confident in our ability to consistently generate incremental revenue and profit growth over the long term. We are currently undergoing a strategic business transformation with a strong focus on the development and growth of our new ventures. While these new initiatives are making promising progress and generating rapid growth, they are still in their investment phase. We are confident that these new businesses will become significant contributors to revenue in the coming quarters. The medical aesthetic sector in China still presents significant growth potential as we adopt the right strategy. As the industry moves towards greater standardization, our comprehensive vertically integrated capabilities and competitive strengths are set to become increasingly evident. We will continue to adjust the business to create greater synergies between our business, institutions, doctors, and products. This strategic focus will allow us to build more diverse and sustainable revenue sources and a solid profit structure, ultimately delivering long-term value to our shareholders. I will now turn the call over to our CFO, Nick, to review the financial results for the fourth quarter before taking your questions. Nick, please?

Hello, this is Nick. Please be reminded that all amounts quoted here will be in RMB. Please also refer to our earnings release for detailed information on our comparative financial performance on a year-over-year basis. Total revenues during the quarter were RMB390.6 million, up 20.1% year-over-year and in line with our guidance. The increase was primarily due to the increase in revenues generated by So-Young Prime and the sales of cosmetic injectables. Information services and other revenues were RMB268.1 million, up 15.8% year-over-year, primarily due to an increase in revenues generated by So-Young Prime. Reservation services revenues decreased 20.7% year-over-year to RMB20.6 million, primarily due to the operating strategy which provided higher subsidies to end-users. Sales of medical products and maintenance service revenues were RMB101.9 million, up 50.6% year-over-year, primarily due to an increase in sales of cosmetic injectables. Cost of revenues were RMB137.6 million, up 56.0% year-over-year. The increase was primarily due to an increase in costs associated with So-Young Prime and the sales of cosmetic injectables. Within the cost of revenues, cost of services and others were RMB94.1 million, up 73.6% year-over-year, primarily due to an increase in costs associated with So-Young Prime. The cost of medical products sold and maintenance services was RMB43.6 million, up 28.1% year-over-year, primarily due to an increase in costs associated with the sales of cosmetic injectables. Total operating expenses were RMB257.8 million, up 21.3% year-over-year. Sales and marketing expenses were RMB126.2 million, up 28.3% year-over-year, primarily due to an increase in payroll costs and the expenses associated with branding and user acquisition activities. General and administrative expenses were RMB86.7 million, up 18.4% year-over-year, primarily due to an increase in payroll costs associated with the expansion of administrative employees to support our business upgrades and new strategic businesses. Research and development expenses were RMB45.0 million, up 9.6% year-over-year, primarily attributable to an increase in payroll costs. Income tax benefits were RMB10.8 million, which was primarily due to the impact of additional deductions for research and development expenditures, compared with income tax benefits of RMB2.4 million in the fourth quarter of 2022. Net income attributable to So-Young was RMB17.5 million compared with a net income of RMB31.3 million during the same period last year. Non-GAAP net income attributable to So-Young was RMB35.3 million compared with RMB38.8 million non-GAAP net income attributable to So-Young in the same period of 2022. Basic and diluted earnings per ADS attributable to ordinary shareholders were RMB0.18 and RMB0.18, respectively, compared with basic and diluted earnings per ADS attributable to ordinary shareholders of RMB0.29 and RMB0.29, respectively, during the same period of 2022. For the full year 2023, total revenues were RMB1.5 billion, up 19.1% year-over-year. Within total revenues, information services and other revenues were RMB1.1 billion, up 22.2% year-over-year. Reservation services revenues were RMB101.3 million, down 21.3% year-over-year. Sales of medical products and maintenance services revenues were RMB333.5 million, up 28.7% year-over-year. Cost of revenues were RMB544.3 million, up 38.4% year-over-year, primarily due to an increase in costs associated with So-Young Prime and the sales of cosmetic injectables. Total operating expenses were RMB1.0 billion, up 4.9% year-over-year. Net income attributable to So-Young International Inc. was RMB21.3 million compared with a net loss of RMB65.6 million in the fiscal year 2022. Non-GAAP net income attributable to So-Young International Inc. was RMB57.6 million compared to a net loss of RMB22.2 million in the fiscal year 2022. Basic and diluted earnings for ADS attributable to ordinary shareholders were RMB0.21 and RMB0.21, respectively, compared with basic and diluted losses per ADS attributable to ordinary shareholders of RMB0.61 and RMB0.61, respectively, in the fiscal year 2022. We have ample cash on hand with a total cash and cash equivalents, restricted cash, and term deposits of RMB1.3 billion as of December 31, 2023, compared with RMB1.6 billion as of December 31, 2022. The decrease was primarily due to share repurchases of RMB125.6 million in 2023. I'd like to reiterate that our new businesses are currently in a critical phase of development as we support them in their early stages of growth. They are critical pieces to the foundation we are building for future growth and recognize that we are just at the start of this journey. However, we are extremely confident that they will increasingly contribute to revenue growth in the quarters ahead. With this in mind, for the first quarter of 2024, we expect total revenues to be between RMB290 million and RMB310 million. The above outlook is based on the current market conditions that reflect the company's preliminary estimates of market and operating conditions and customer demand. This concludes our key remarks. I will now turn the call to the operator and open the call for Q&A.

Our first question will come from Katrina of Citigroup.

I will translate myself. My question is about the overall outlook of the medical aesthetic market in 2024 and also the market landscape of the medical aesthetic market in the first quarter of 2024. Thank you.

According to data from the China National Bureau of Statistics, retail sales of consumer groups are gradually recovering, increasing by 6.7% year-over-year in January and February 2024. Consumption data from our medical aesthetics platform is also reflecting this trend, with a gradually improving macroeconomic environment and our differentiated strategy taking hold. We remain optimistic about the growth prospects of the medical aesthetics industry in 2024 and over the long term. The Chinese medical aesthetics industry is maturing. Structural changes in consumer behavior are driving a tremendous shift in demand. As consumers mature, the market is moving from low frequency and high construction value towards high frequency, high quality, and diversification. As a result, e-commerce platforms and medical institutions are shifting their focus upstream and towards acquiring diverse traffic. Competing on pricing will no longer be an option to attract premium users. The old model will lower the value proposition of products and services and lead to a smaller share of a wider market. In 2024, these market shifts will continue. As a result, we will focus on refining our three businesses and further consolidate the positioning of our platform in the market. We will do this by upgrading our community for businesses and adding high-end customized services targeting top-tier users while adopting a differentiated operating strategy from our peers. So-Young Prime will focus on offering the best quality-to-cost ratio for mid-tier users, and our upstream business will support both of these platforms and user groups, capturing opportunities in the light medical aesthetics market and expanding margins.

Our next question comes from an unidentified speaker.

I'd like to ask what are your thoughts on the recent suspension of medical aesthetic light marketing? And where do you think the regulation trend is going forward?

The medical aesthetics market continues to be regulated strongly. For any new marketing models that are deployed, regulators will require an observation period where they can stop any behavior that breaks the medical regulations. We believe medical aesthetics marketing will continue to be restricted to a few channels approved by regulators, such as search engines and e-commerce. This regulatory trend actually benefits us indirectly as the value proposition of our existing legal marketing channels becomes more pronounced. We maintain our belief that a healthy market is the foundation for long-term growth and value creation for companies. We will focus our attention on the supply side of the market going forward by integrating the core production advantages we have accumulated in terms of institutions, doctors, and users. This will also allow us to set standards for service quality and delivery, ensuring users receive a premium experience. These comprehensive capabilities will enable us to build a strong competitive barrier. Unlike a pure internet business model, we are in a position to solve issues at a deeper level, creating a differentiated model from our competitors.

And next, we have a question from Chloe Wei of CICC.

My question is concerning So-Young Prime. Could management maybe share some more about the P&L contribution, revenue, and margins for 2023 and what we should expect in 2024? Also, could management share some color on the playbook in different cities in China since we are looking at more chain clinics in operation by the end of 2024? How should we expect the pace and investments?

Last year, So-Young Prime completed its strategic transformation into our asset-light, highly efficient platform and operational model which helped us to take the lead in the surgery and light medical aesthetic sector. The model clinic we opened last August is a logical next step from our previous cooperation with institutions and products. We gathered an experienced clinical operating team to promote the development of a standardized management system for light medical aesthetics institutions that leverage our supply chain innovative capabilities. Our model clinics broke even in only 3 months of formal operations, which reflects our strong reputation among medical aesthetics users and has strengthened our confidence to begin exploring franchising opportunities. In 2024, we plan on opening more than 10 clinics in 6 cities nationwide. Each location has been selected based on data from our cooperation with institutions, strict operational requirements, profitability, and deep market research.

And the next question comes from Joey of Jefferies.

This is Joey from Jefferies on behalf of Thomas Chong. My question is can management share with us the outlook for the upstream supply chain business?

Thank you for your question. We plan to launch a new product in 2024 and also add new products sourced through our supply chain business. In addition, from 2025 in the light-demanded collagen category, we will launch various products including PWLA, which will establish a strong presence for us in this vertical. With 3 years of operational experience, the synergies between our product development pipeline, sales team, and platform are now rapidly strengthening. We expect to add more products and continuously generate incremental revenue and profit growth from the supply chain business.

Next, we have a question from Haitong Securities.

Let me translate myself. I have a question about the profit margin. I would like to know the reason for the year-over-year decrease in gross margin and where your margin trend is headed going forward.

The decrease in gross margin was mainly due to the changes in revenue mix. In Q4 2023, our sales of information and reservation services maintained high margins compared to those from sales of medical products and maintenance which were lower, while revenue from new business such as So-Young Prime has already demonstrated its potential. It is still in the early stages of development with a lower gross margin. As we strategically expand our presence along the medical aesthetic value chain, each of those new businesses is expected to increasingly contribute to our bottom line as the synergies created by our presence, both upstream and downstream, strengthen the profitability of our business. Overall performance is expected to improve in the mid to long term.

We are now approaching the end of the conference call. Thank you for your participation in today's conference. You may now disconnect. Have a good day.