Ladies and gentlemen, thank you for standing by for So-Young's Third Quarter 2024 Earnings Conference Call. At this time, all participants are in the 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 would now like to turn the meeting over to your host for today's call, Ms. Mona Qiao. Please proceed, Mona. Thank you, Operator, and thank you, everyone, for joining So-Young's third quarter 2024 earnings conference call. Joining me 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 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'd like to turn the call over to Mr. Xing Jin. [Foreign language] Our business continued to develop robustly during the third quarter, with total revenue reaching RMB 332 million, once again surpassing the upper end of our guidance range. Net income attributable to So-Young was RMB 20.3 million, up 11.2% year over year, while Non-GAAP net income attributable to So-Young came in at RMB 22.2 million, up 133.1% year over year, demonstrating the effectiveness of our continued investment across the industry value chain. [Foreign language] In the third quarter, we made significant progress in our chain of clinics, expanding the number of stores to 17 currently from eight last quarter as we penetrated into more cities. All of our clinics are located in prime commercial areas, which further strengthens our market coverage and competitiveness. This business is gradually becoming the key growth driver for us. Its revenue grew by 67% quarter to quarter, with gross margins improving significantly. Notably, all eight of the new clinics opened during the quarter are generating positive operating cash flow, and four are already profitable at the store level. In addition, despite the slowdown in consumer spending, our upstream business continued to deliver satisfactory performance. We continue to optimize the structure of our business, with our POP business serving as a solid foundation for the rapid development of these new businesses, creating strong synergies with our chain of clinics and upstream businesses. This provides critical support for our development in the medical aesthetic market. [Foreign language] As anticipated, the Chinese medical aesthetic market is polarizing with two distinct trends. On the one hand, mass consumers are gradually releasing their demands for cost-effective and convenient medical aesthetic products and services during the iteration of medical aesthetic technologies and project diversification. On the other hand, middle to high-income consumers remain willing to pay a premium for high-quality and personalized services while seeking cost-effectiveness, pushing the medical aesthetic market towards higher quality and standards. We are closely following these industry trends and accelerating and deepening our end-to-end integrations across the industry value chain, especially in our upstream and clinic businesses. During the quarter, our new business segment continues to grow rapidly, with revenue from the sales of medical products and maintenance services reaching RMB 89.3 million, up 18.7% year over year. [Foreign language] Now let me quickly take a look at our Q3 business performance. We have made big progress with our chain of clinics business, with 17 clinics fully operational across nine core cities as of today, including Beijing, Shanghai, Guangzhou, Shenzhen, Hangzhou, Chengdu, Wuhan, Chongqing, and Changsha. Among them, 14 record positive monthly operating cash flow in September. This demonstrates our sustainable operational capabilities, supported by our user base and strong brand influence. To share a few key metrics, our customer retention rates were maintained at 60%. The overall customer satisfaction at our clinics reached 4.98 out of 5, according to our data, reflecting our customer-centric operational philosophy and efficient service fulfillment capabilities. Moreover, average customer acquisition costs are now significantly lower than the industry average, highlighting the competitive advantage in marketing and operational efficiency. Our private domain user base continues to expand, now at around 900,000 users, which provides a solid foundation for us to expand in the future. [Foreign language] Within our chain of clinics businesses, a number of key initiatives have delivered robust growth that I'd like to highlight. For example, our high-end Master Injector Team project achieved 104% sequential revenue increase and annual average customer spend of nearly RMB 50,000. Its customer satisfaction rates were also exceptional, proving that our tactic of carefully selecting injection doctors is highly appreciated by consumers. Additionally, we have actively expanded partnerships with mainstream platforms. Our clinics are now on many traffic platforms such as Meituan and Tmall, further expanding our market coverage. Moreover, So-Young Youth Clinic serves as the focal point in the process of vertical integration and has given us notable cost and price advantage. For our ultrasonic program, leveraging private domain operations to reduce marketing costs and proprietary branded devices to lower consumable costs, achieved remarkable results. Its online orders exceeded 7,000 in the first month immediately after its launch. We plan to further expand our presence in five core cities, including Beijing, Shanghai, Guangzhou, Shenzhen, and Hangzhou, and accelerate the rollout of franchises in order to quickly replicate our successful standardized chain operations model to more cities, further scaling up our business. [Foreign language] We have also made great progress in our upstream business by building up four category upstream medical aesthetic manufacturing capabilities for our broader ecosystem. As of the end of the third quarter, we partnered with more than 970 institutions for the sales of injectables. Our injectable products, Elasty, saw a 22% year-over-year increase in shipments, reaching 43,000 units during the quarter. Sales of injectables grew by 21% year-over-year, further consolidating our competitive advantage in the upstream sector and underscoring the strong demand of our products. Additionally, we partnered with Lancy Group for upstream products. Together, we aim at co-developing the Natural Oriental Lightweight Face project, which is already being offered in 90% of Lancy's aesthetic institutions after just two months, showcasing the strong synergies of our business ecosystem and leading product promotion capabilities. [Foreign language] Our traditional POP businesses provide strong support for both our chain of clinics and upstream businesses. Moving forward, we will focus more on improving the experience for both medical aesthetic institutions and consumers. Our platform continues to help medical aesthetic institutions improve order conversion and sales through targeted advertising and traffic allocation. This has been highly recognized by institutions, demonstrating the effectiveness of advertising placements on our platform. For consumers, we are committed to providing cost-effective products. In September, GMV, facilitated by our platform, grew by over 60% from the previous month. The per capita in-store GTV for the third quarter increased 22.9% year-over-year, reflecting the initial success of our upmarket shifting tactics in POP. We also enhanced our sales leads and conversion rates through commission rates reform and product optimization. [Foreign language] Our POP business has served the medical aesthetic industry for 11 years, establishing a strong brand presence and becoming top of mind for consumers. Over the past three years, we have invested over RMB 1 billion in building our upstream supply chain and expanding our product offerings. We have now opened 17 clinics, leveraging our organizational culture and central platform capabilities, gradually growing in scale to deepen cost advantage and ensure consumers enjoy reliable, convenient, high-quality, and high-cost-effective services. Looking forward, our focus is clear. Through upstream, middle, and downstream integration, we aim to create multidimensional competitive advantage and become the most trusted medical aesthetic and healthcare service provider, fulfilling our mission of making medical aesthetic accessible for 100 million Chinese people. [Foreign language] Now let me hand over to our CFO, Nick, who will go through the financial results. After that, we will open for questions. Hello, this is Nick. Please be reminded that our amounts quoted here will be RMB. Please also refer to our earnings release for detailed information of our comparative financial performance year-over-year basis. Total revenues during the quarter were RMB 371.8 million, down 3.5% year-over-year, exceeding the high end of our guidance, with the sales of medical products and maintenance services growing by an impressive 18.7% year-over-year, primarily due to an increase in the order volume for aesthetic injectables and medical equipment. Information services and other revenues were RMB 263.0 million, down 8% year-over-year, primarily due to a decrease in the number of medical service providers subscribing to information services on our platform. Reservation services revenues decreased 18.9% year-over-year to RMB 19.6 million, primarily due to a decrease in consumer spending through our platform. Cost of revenues were RMB 142.2 million, down 0.3% year-over-year, primarily due to a decrease in the cost of services associated with the information services. Within cost of revenues, cost of services and others were RMB 98.6 million, down 4.7% year-over-year, primarily due to a decrease in the cost of services associated with information services. Cost of medical products sold and maintenance services were RMB 43.5 million, up 11.3% year-over-year, primarily due to an increase in the cost associated with the sales of aesthetic injectables. Total operating expenses were RMB 225 million, down 8.1% year-over-year. Sales and marketing expenses were RMB 114.9 million, down 20.1% year-over-year, mainly due to a decrease in expenses associated with branding and user acquisition activities. G&A expenses were RMB 69.9 million, up 39.1% year-over-year, primarily due to an increase in share-based compensation expenses. R&D expenses were RMB 40.2 million, down 20.6% year-over-year, primarily attributable to improvements in staff efficiency. Income tax expenses were RMB 2.1 million, compared with income tax benefit of RMB 2.2 million in the same period of 2023. Net income attributable to So-Young was RMB 20.3 million, compared with a net income of RMB 18.3 million during the same period last year. Non-GAAP net income attributable to So-Young was RMB 22.2 million, compared with RMB 9.5 million in the same period of 2023. Basic and diluted earnings for ADS attributable to ordinary shareholders were RMB 0.2 and RMB 0.2 respectively, compared with basic and diluted earnings for ADS attributable to ordinary shareholders of RMB 0.18 and 0.18 respectively during the same period of 2023. We have maintained a robust cash position with cash and cash equivalents, restricted cash and term deposits, term deposits, and short-term investments, totaling RMB 1.25 billion as of September 30, 2024. Moving to our outlook for the fourth quarter of 2024, we expect total revenues to be between RMB 350 million and RMB 370 million. This outlook also takes into account the uncertainties of the pace of clinic openings and ramping up, as we are in the early stages of our clinic expansion and our business transformation. That being said, we are confident our strategic initiatives integrating the upstream and downstream of the aesthetic medical industry will ideally position us for long-term growth. These initiatives will enable us to capture a significantly larger share of the market and establish a solid foundation for profitability. As our clinic matures and market conditions stabilize, we expect our financial performance to gradually improve. This concludes our key remarks. I will now turn over the call to the operator and open the call for Q&A. Operator, we are ready to take questions. Thank you. We will now begin the question and answer session. To ask a question, you may press star and then one on your telephone keypad. If you are using a speakerphone, 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 two. At this time, we will pause momentarily to assemble our roster. The first question comes from Ivy Li with Haitong Securities. Please go ahead. Okay. Good evening, management. And thank you for taking my question. I would like to ask about the industry. From your current perspective, what new changes or trends are emerging in the medical aesthetics industry? And I'll translate myself. [Foreign language] [Foreign language] In recent years, light medical aesthetic procedures have gained popularity due to their ease of operation, lower risk, and shorter recovery periods, attracting a growing number of consumers. However, the current market is dominated by small and medium-sized institutions, lacking unified standards and quality control, leading to inconsistent service quality. There are around 20,000 medical aesthetic institutions nationwide, with over 95% being small institutions. No national chain clinic brands have yet emerged in the market, indicating significant room for standardization and consolidation. With the continued growth in demand for light medical aesthetics, we believe nationwide chain clinic brands will emerge in the future. South Korea serves as a prime example where the development of light medical aesthetic chains has already reached maturity, with over 10 well-known brands. If the Chinese market develops chain brands at a similar rate, the total number of light medical aesthetic chain clinics could exceed 2,000, presenting significant marketing opportunities. Our goal is to benchmark against developed overseas markets and make medical aesthetic accessible and affordable to all. This is also the original intention behind establishing our own chain of clinics. [Foreign language] Currently, the demand among Chinese medical aesthetic consumers is polarized. Customers seeking standardized procedures focus on authenticity, compliance, and cost-effectiveness, whereas those interested in non-standard services prefer top-tier doctors and personalized solutions. For this latter segment, we have introduced the Master Injector Team, a high-end customized service which has received excellent user feedback and financial results. By precisely targeting different consumer needs, we aim to deliver exceptional experiences to various customer groups. We are optimistic about the growth potential of light medical aesthetic chain clinics and are enhancing our competitiveness through vertical integration and cost optimization. By integrating our upstream supply chain and implementing a unified management and operational model, we aim to reduce operating and procurement costs across our clinics, thereby improving overall profitability. Given this promising market outlook, we are committed to expanding our footprint in the light medical aesthetic market, aiming to become a leading domestic clinical chain brand. [Foreign language] Thank you. Thank you. The next question comes from Stacy Lee with Guosen Securities. Please go ahead. [Foreign language] We've observed a decline in the POP business, particularly following the announcement of your chain extension. Has there been a strategic shift for POP? Thank you. [Foreign language] We continue to place significant importance on POP, which remains a critical component of our operations. Similar to platforms like Didi or JD.com, we maintain a mix of self-operated and third-party partners. The light medical aesthetic chain clinics are our self-operated business, developed to address intense market competition and traffic challenges. While our traffic quality is high, we face the risk of insufficient traffic compared to big internet platforms with higher traffic volume, which could potentially impact user and institutional retention over the long term. We have drawn valuable insights from product category of Sam's Club and Pang Dong Lai, and are developing our light medical aesthetic chain clinics with the aim for them to become new traffic drivers, attracting and retaining more users on our platform. This approach attracts more third-party medical institutions to join, offering more diverse products to meet users' diverse and personalized needs, and are helping these institutions achieve greater benefits. Ultimately, it positions the platform to rapid growth. [Foreign language] Moving forward, we will place greater emphasis on the experience of institutions and consumers. On the institution side, our ROI for verified transactions improved steadily, with September showing an ROI increase of 60% compared to June. Feedback from institutions has been positive. From the consumer perspective, we remain committed to providing cost-effective products. September's GMV increased by 60%. Additionally, with the implementation of commission reforms and product optimization measures, the numbers of leads and the conversion rates from exposure to detailed pages have been shown improvement. For example, during September's promotional activities, the conversion rate of DAU to detailed pages increased by 4%, and the conversion rate from detailed pages to transaction increased by 20% compared to June. We are also adjusting our fee model, transitioning from the original advertising-based model to a service fee-based model, shifting from exposure-based charge to performance-based charge, placing greater emphasis on conversion effectiveness. [Foreign language] Thank you. Thank you. The next question is from the line of Nelson Cheung with Citibank. Please go ahead. [Foreign language] So let me translate the question myself. My question is regarding the clinic business. So what are the considerations behind So-Young's move to implement a franchise model alongside the expansion of its national chain network? Thank you. [Foreign language] Our original goal was to address the issue of information asymmetry in the medical aesthetics industry through our community and platform, reducing the decision-making costs and risks. Despite the rapid growth and popularization of medical aesthetics over the years, we found that services remain expensive, and truly trusted institutions are rare. We have always aspired to serve 100 million Chinese consumers, offering safe, convenient, and high-quality services at reasonable prices. Our goal is to become a national chain clinic brand, building long-term trust with consumers through high-quality, cost-effective services. By maintaining high customer retention, we can reduce marketing expenses, achieving significantly greater efficiency per employee and per square meter than traditional clinics, while delivering more value and benefits to consumers. [Foreign language] For the business itself, the success of the chain model relies on central platform support, which helps break central platform costs over an expanding scale, maximizing cost efficiency. Our decision to launch the franchise model aims to capture development opportunities which exist in light medical aesthetic sector, accelerate the expansion of our clinic network, and effectively control costs. The operating data from our initial 10-plus self-operated clinics have already validated this model's feasibility. We believe that introducing franchise partners will further accelerate expansion, enhance brand influence, and secure resources and support from commercial property owners, customers, and government agencies, allowing us to focus on building and enhancing central platform capabilities. Based on our regular financial and operational projections, we are confident in achieving rapid growth and profitability at the individual store level for our franchised clinics. [Foreign language] Our franchise model uses a fully managed approach to ensure high service standards and deep integration of the supply chain. The supervisors and doctors at all clinics are So-Young's registered employees, and the information system is fully managed and controlled by headquarters, ensuring standardized operations across all chain clinics. Additionally, the asset-light franchise model offers financial advantage, promising greater profitability and sustainable growth potential for the company. [Foreign language] Thank you. Thank you. The next question is from the line of Harry Zhao with Deutsche Bank. Please go ahead. Harry Zhao, your line has been unmuted. You may proceed with your question. As there is no response from the line of Harry Zhao, we will proceed to the next question, which will be from the line of Lucy Zhao with Penghua Funds. Please go ahead. Thanks, Management Team, for answering my question. The third quarter indicates effective expense control, with sales and marketing expenses down approximately 20% year over year. How has Management Team achieved a lower expense ratio and improved profitability? [Foreign language] Thank you, Lucy, for your question. We believe profitability fundamentally comes from business growth. Our clinic chain business has proven its growth potential, and by optimizing order and back office costs while maintaining expansion speed, there exists more room for profits. Additionally, the continuous expansion of our upstream product pipeline and the launch of new products will further enhance our profitability. As one of the very few companies to successfully achieve vertical integration in the industry, we leverage our comprehensive advantages and forward-looking strategies to maintain long-term competitiveness and high-quality growth in the market. The reduction in sales and marketing expenses is the result of adjustment to our marketing strategy. We recognize that the current medical aesthetics market is beyond pure traffic competition and requires a professional platform with a deep understanding of the industry and user needs, offering consumers excellent experience and addressing their genuine concerns. This has led us to focus more on refined operations and cost-effectiveness analysis, prioritizing the efficiency and precision of marketing investments and making timely adjustments based on market conditions. In terms of overall expense management, effective cost control has enabled us to maintain a well-managed expense ratio in Q3 2024, which stood at 60.5%, down 3 percentage points year over year, and a 0.2 percentage point quarter over quarter. Thank you. Thank you. Thank you. The next question is from Harry Zhao with Deutsche Bank. Please go ahead. Harry Zhao, if you are speaking, you are not audible. Hello? Yeah. Can you hear me? Yes, you are audible now. You may proceed. Oh, okay. [Foreign language] Let me just translate for myself. I want to ask a question about upstream business. What competitive advantages does So-Young have over traditional upstream companies to ensure success? Thank you. [Foreign language] We have already demonstrated clear advantage in the upstream business. For instance, Elasty has achieved a three-year figure of 170% in shipments in the highly competitive HA markets. Additionally, as a new player in the ultrasound market, we have quickly risen to prominence with cumulative shipments of our True Lift ultrasound device reaching over 200 units. This underscores the ecosystem-based operational advantage of our upstream business, allowing us to maintain a durable position in a highly competitive industry. [Foreign language] For upstream companies lacking marketing resources and capabilities, we provide target-brand positioning and promotional support to enhance product visibility and expand coverage among end consumers, medical aesthetic institutions, and doctors. This helps potential products grow into best sellers and assists upstream manufacturers in establishing a solid market foundation and enhancing their influence in the industry. Through our self-operated chain clinics, we have launched several top-performing products, setting a new standard in terms of industry marketing strategies. Currently, we have opened 17 clinics in nine core cities, and we plan to accelerate our market coverage through a mix of self-operated and franchise models, further driving product sales and enhancing competitiveness. [Foreign language] Additionally, our participation as the only external shareholder of the MEVOS International Congress of Medical Aesthetics, the largest industry event, will strengthen our upstream business by expanding influence among institutions and doctors, promoting innovation in the industry. With our competitive edge in marketing, data resources, and team expertise, we aim to become a four-category upstream medical aesthetic manufacturer within a robust ecosystem. [Foreign language] Thank you. [Foreign language] Thank you. This brings us to the end of our question and answer session. The conference has now concluded.