At the moment when the face value economy is increasingly prosperous, SY.US, the first stock of the Internet medical beauty platform, is difficult to be "beautiful" and seems to have an embarrassment of "forcing a smile". With the closing time of the United States East Time on June 21, the company's share price was locked at $1.04. Since the company hit a high of $3 in stock price in early 2023, it has shown an overall downward trend. The decline in stock prices also indicates a shift in investor attitudes towards the company. The reason for this situation may be closely related to the new developments in its performance and business model.
The financial report shows that New Oxygen's revenue in the first quarter of 2024 was 318 million yuan, an increase of 3% from the same period last year's 310 million yuan, and a decrease of 19% from the previous quarter's 390 million yuan. New Oxygen's net loss in the first quarter of this year was 20.19 million yuan, compared to 11.11 million yuan in the same period last year.
In addition, the business data of New Oxygen shows a quarterly decline in the number of active users and registered medical institutions, making this "matchmaking business" seem increasingly difficult to operate. Why does the new oxygen medical beauty cause a situation of "hypoxia"? How can we restore "beauty" in the future?
The total net profit of six fiscal years has just exceeded 100 million yuan
In the medical beauty industry, which has always been known for its high gross profit and impressive scenery, New Oxygen's performance report seems somewhat difficult for investors to handle.
Looking at the annual reports since 2019, the overall performance of New Oxygen has been extremely unstable, with revenue fluctuating and net profit struggling to break even.
From 2019 to 2023, the company's revenue was 1.152 billion yuan, 1.295 billion yuan, 1.692 billion yuan, 1.258 billion yuan, and 1.498 billion yuan, with year-on-year changes of 86.58%, 12.45%, 30.69%, -25.68%, and 19.09%, respectively;
The performance of net profit is even more unbelievable. During the same period, the net profits of New Oxygen were 177 million yuan, 4.877 million yuan, -37.636 million yuan, -66.107 million yuan, and 25.944 million yuan, respectively. Overall, the sum of net profits for the six fiscal years is just a small target. The matchmaking business of New Oxygen seems to be getting harder and harder to do.
Massive financial data is compiled based on public data.
At the same time, in recent years, the management of New Oxygen has frequently undergone changes, with multiple executives including COO Liu Xiao, CMO Hu Guanzhong, CFO Yu Min, and CTO Li Xuejian resigning due to personal reasons. The change in management undoubtedly adds to the market's concerns about the stability of the company's operations. It can be seen that the new oxygen, which frequently creates appearance anxiety, is also abnormally anxious. Throughout the development process of new oxygen, where is its core competitiveness? With the continuous increase of leading medical beauty companies, how much cake can New Oxygen get in this industry? How to break the ceiling of repurchase rate is a key issue that New Oxygen needs to consider in the future.
How good is the Internet in the transformation industry?
As the Internet is a competitive place for businesses, NEO understands the importance of traffic. As a "medical beauty community+e-commerce model" platform, New Oxygen is known as the combination of "Xiaohongshu+Dianping" in the medical beauty industry. With the huge traffic access connecting the business end and the consumer end, as well as the bright clothing of medical beauty Internet, it has obtained capital support from Jingwei China, CDH Investment, Zhixin Capital, etc.
With capital support, in May 2019, under the halo of "the first Internet medical beauty stock", we landed in the US stock market, and hit a high of $22.8 in the short term after listing. However, "going public is the peak" and has since continued to decline, with a current market value of 110 million US dollars, which has dropped by 90% compared to when it went public.
Faced with a sharp decline, in order to stabilize the secondary market, New Oxygen announced that it will repurchase no more than $25 million worth of shares starting from March 22 this year, accounting for about 25% of the closing market value on the announcement date. It also announced a dividend of $0.078 per common share ($0.06 per share) on April 12 this year, with a total dividend of approximately $6 million.
In addition, Jinxing, the chairman and CEO of New Oxygen, publicly announced the company's new development strategy: transforming from medical beauty e-commerce platform to industrial Internet platform, and officially launched three innovative businesses, namely, new oxygen preferential service, new oxygen fast service and new oxygen exclusive service, enabling medical beauty institutions, medical beauty manufacturers and medical beauty doctors in an all-round way.
The upstream market in the medical beauty industry often has high technological barriers, resulting in strong profitability, while the downstream market has shifted from an incremental market to a stock market, and competition has become increasingly fierce. The transformation of New Oxygen may be driven by the industry environment.
However, the R&D expenses of New Oxygen, which aims to connect upstream, in 2023 were 203.5 million yuan, a year-on-year decrease of 13.43% from 235 million yuan in 2022. Not to mention whether the company's transformation can be successful, as market competition intensifies and supply continues to increase in the future, the upstream dividends of the medical beauty industry may not be as beautiful as imagined.
This goal sounds like a "big" goal. How New Oxygen will build the industrial Internet, and whether the transformation of the industrial Internet can help New Oxygen to improve, remains to be further observed.
Users are "fleeing" and marketing growth is gradually failing
From the perspective of business data, the core business operations of New Oxygen may not be optimistic. In 2023, the MAU of new oxygen mobile devices in the first, second, third, and fourth quarters were 3.4 million, 3 million, 3.1 million, and 2.7 million, respectively, with this data reaching a peak of 10 million at one point.
With fewer potential users, the number of merchants willing to spend money on advertising decreases, and the number of paying medical institutions is also decreasing. The willingness of merchants to be reflected in data is more realistic. In the fourth quarter of 2023, the number of medical service providers subscribing to information services on the Soyuying platform was 1289, which is still 200 fewer than the 1489 in the same period of 2022.
In the past few years, New Oxygen has made some explorations related to customer acquisition, such as becoming a doctor MCN, building internet celebrities, and promoting through sharing and selling products with internet celebrities. In addition, they have also joined AR, developed facial testing software, launched free experience activities, and used new media matrix marketing.
But marketing is still the main way to attract customers. The sales expenses of New Oxygen from 2019 to 2023 were 470 million yuan, 726 million yuan, 792 million yuan, 472 million yuan, and 520 million yuan, respectively. During the same period, the sales expenses accounted for 40.8%, 56.06%, 46.8%, 37.52%, and 34.71% of the total revenue, respectively.
According to a report, it is expected that the Chinese medical beauty market will reach RMB 351.9 billion by 2025, RMB 653.5 billion by 2030, and a compound annual growth rate of 13.2% from 2025 to 2030.
From the data, it can be seen that the future development prospects of the medical beauty industry are enormous, but the tempting cake naturally comes from capital giants who want to get a share of the pie, which also makes the competition in the industry increasingly fierce.
Nowadays, in addition to facing fierce competition from competitors in the industry such as Meibei, Gengmei, and Yuemei, New Oxygen also faces cross-border competition from other industry giants, including ByteDance, Alibaba, Meituan, JD.com, and other large enterprises.
However, with Alibaba, Meituan and other Internet platforms entering into Yimei, taking high-frequency services such as takeout and payment as the diversion entrance, and diverting to high margin projects such as Yimei, the disadvantages of the lack of traffic advantages of New Oxygen itself are highlighted. Seeing medical beauty become a new battlefield for Internet giants, and the flow of aboriginal new oxygen has reached the ceiling, how long can the story be told?