Rising popularity of plastic surgery lifts So-Young’s Nasdaq IPO
Share prices for So-Young International surged 31.9% on Thursday following the Chinese internet cosmetic services company’s Nasdaq debut, as surging momentum in China’s medical aesthetic industry gains speed.
The stock price rose further to $20.77 by market close on Friday, a more than 50% increase of its offer price of $13.80. The Tencent-backed plastic surgery services platform filed its offer documents in April, seeking to price its shares at between $11.8 and $13.8 with a maximum amount of $179 million. It had raised a total of eight rounds of funding before going public, including a $50 million Series C in 2016 led by Chinese investment firm Youyipin which also included Tencent, according to Chinese media outlet 36kr.
According to its prospectus, about 30% of the funds will be used in technological research and development (R&D), while 40% of the capital will be invested toward user acquisition and market expansion. Jin Xing, founder and CEO of the company, said in a trade event in December that it will improve its online consulting services with intelligent algorithms, while developing video-streaming functions on its platform.
The company did not respond to requests for comment.
Founded in 2013 by Jin Xing, a former Tencent director, the company’s namesake app So-Young has connected 35 million users with more than 30,000 licensed doctors for aesthetic surgery services, according to the company. Its revenue surged 138% year on year in 2018 to more than RMB 617 million ($90 million) with net profit of RMB 55 million. Ad sales and commission fees are the main sources of the company’s revenue.
China is expected to surpass the US to become the world’s largest cosmetic medical services market by 2021. According to figures from research institute Frost & Sullivan, the compound annual growth rate for China’s medical aesthetics market was 23.6% from 2014 to 2018. The market reached RMB 122 billion in 2018, and is expected to triple to RMB 360 billion by 2023.
Cosmetic medical services should dig deeper in the third- and fourth-tier Chinese cities with a more focused service portfolio, Jin said, adding that the Chinese cosmetic surgery market will “remain promising over the next five years” (our translation).