Xinyang's "Heavy Asset Game" is urgently awaiting a profitable moment

Last quarter, So-Young (Xinyang) experienced its most difficult financial period.

At that time, So-Young was at a crossroads, transitioning from platform advertising and heavy-asset chain medical aesthetic services, with the pain of transformation particularly intense.

Because of its involvement in offline light medical aesthetics, competing with its original medical aesthetic clients, this inevitably accelerated the loss of traditional advertising clients, making the transition especially painful.

Now, with the growth of its offline chain business, So-Young’s tough times have finally reached a turning point.

In 2025, So-Young’s revenue reached 1.523 billion yuan, a 3.87% increase year-over-year. In the fourth quarter alone, revenue was 461 million yuan, up over 20% year-over-year.

The heavily invested offline light medical aesthetic chain business has finally supported half of the company’s operations. In Q4 2025, revenue from So-Young’s medical aesthetic medical services (i.e., offline store business) reached 248 million yuan, a 205.3% increase year-over-year, accounting for over 50% of total revenue for the first time.

By the end of 2025, So-Young had 49 offline stores.

Although the business restructuring has shown initial results, So-Young has not yet fully escaped the loss cycle, with a net loss of 242 million yuan in 2025.

In response, So-Young told AllWeather Tech that it aims to achieve quarterly profitability by Q4 2026.

To turn losses into profits, So-Young’s core drivers are “improving efficiency of existing stores” and “expanding into new stores.”

In 2026, So-Young plans to open no fewer than 35 new stores, intensifying its network in first-tier cities while focusing on expanding into high-quality second-tier cities.

During a conference call on March 25, So-Young’s management explained the business logic behind increasing its presence in second-tier cities: Compared to first-tier cities, second-tier cities in China still have significant gaps in medical delivery capacity and operational standards in the medical aesthetics field. So-Young’s “standardized delivery capability” can ensure that stores in second-tier cities provide services and results comparable to those in first-tier cities.

Further, according to So-Young’s management, as of December 2025, the average sales per square meter in mature second-tier city stores like Wuhan Tiandi and Changsha were around 7,000 yuan. Recently opened second-tier city stores, such as the Suzhou Suyue Plaza store, achieved monthly revenue exceeding one million yuan within three months, demonstrating the feasibility of replicating the model in second-tier cities.

“From the profitability of mature stores in second-tier cities, due to lower wages for medical staff and rent levels compared to first-tier cities, profit margins in second-tier city stores are even slightly higher,” said So-Young’s management.

With the benefits of sinking into second-tier cities and higher profit margins, whether So-Young can successfully implement its profitability model is now under close watch.

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