🧾 What This Document Is

This is So-Young International Inc.'s annual report (Form 20-F) for the fiscal year ended December 31, 2025. Think of it as a comprehensive annual health check-up required by the U.S. SEC for foreign companies listed on American stock exchanges. It gives investors a deep dive into the company's business, finances, and the significant risks it faces.

👉 In simple terms: This document is the company's official, detailed report card for investors, explaining what it does, how much money it made or lost, and the major challenges it confronts, especially those related to its operations in China.

🏢 What The Company Does

So-Young is a leading online platform in China for medical aesthetics. This includes non-surgical cosmetic treatments like laser procedures, fillers, and other "medspa" services.

👉 In simple terms: Imagine a combination of a discovery platform like Yelp, a booking service like OpenTable, and a content hub like Instagram, but all focused exclusively on connecting users with plastic surgery clinics and aesthetic treatment providers in China. The company primarily makes money by charging clinics for marketing and reservation services on its platform.

💰 Financial Highlights

The financial picture for 2025 shows significant challenges compared to prior years.

Key Figures (in RMB, millions):

• Total Revenue: 1,523.4 million (approx. US$218 million), a slight increase from 1,466.7 million in 2024.
• Net Loss Attributable to So-Young: 242.3 million (approx. US$34.6 million). This is a substantial improvement from the large loss of 589.5 million in 2024, but contrasts with a net profit of 21.3 million in 2023.
• Total Assets: 2,649.6 million (approx. US$379 million) as of Dec 31, 2025.
• Total Liabilities: 980.8 million (approx. US$140 million) as of Dec 31, 2025.

👉 Why it matters: While revenue is stable, the company has swung from a small profit in 2023 to a large loss in 2024 and back to a smaller loss in 2025. This indicates volatility and ongoing profitability challenges in a competitive market.

🚀 Key Moves & Operations

The company operates through a complex structure due to Chinese regulations.

• VIE Structure: So-Young doesn't directly own its Chinese operating companies. Instead, it controls them through Variable Interest Entity (VIE) agreements. This is a common but riskier structure for Chinese tech firms listed overseas.
• Share Buybacks: The company has active share repurchase programs, with purchases continuing into 2026. This is often a sign management believes the stock is undervalued.
• Business Segments: The operations are segmented, with a focus on its "Platform Service Group" and an "Aesthetic Treatment Services" segment.

👉 Why it matters: The VIE structure is critical to understand. It means investors don't have direct ownership of the operating assets but rely on contractual rights, which are subject to Chinese legal and regulatory risks.

⚖️ Big Picture: Strengths & Risks

👍 Strengths (The Bull Case)

• Market Leader: Operates a leading platform in China's large and growing medical aesthetics market.
• Brand Recognition: Well-known brand "So-Young" in the Chinese aesthetic services space.
• Cash Position: Holds a reasonable amount of cash and equivalents (RMB 418.2 million).

⚠️ Risks (The Bear Case - VERY SIGNIFICANT)

This filing details extensive risks, particularly related to its China-based operations:

1. Regulatory & VIE Risk: The PRC government has significant oversight. Any adverse change in regulations could invalidate the VIE agreements, causing the company to lose control of its operations and assets.
2. PCAOB & Delisting Risk: Although the PCAOB regained access to inspect Chinese auditors in 2022, the situation is not guaranteed. If access is again restricted, So-Young's shares could be prohibited from trading in the U.S. under the Holding Foreign Companies Accountable Act (HFCAA).
3. Data & Cybersecurity Laws: Evolving strict data privacy and cybersecurity laws in China could impose heavy compliance costs or restrict operations.
4. Profitability Pressure: Recent financial losses highlight sensitivity to market competition and economic conditions in China.
5. Currency & Dividend Risk: The company may rely on cash flows from China. Restrictions on currency conversion or profit repatriation could impact its ability to fund operations or pay dividends.

🔮 What's Next

The filing outlines the company's need to:

• Continue navigating the complex and evolving Chinese regulatory environment.
• Manage its business to return to sustained profitability.
• Maintain compliance with U.S. listing requirements amid geopolitical tensions.
• Execute its share repurchase program.

🧠 The Analogy

Investing in So-Young is like buying a ticket to a promising concert in a venue where the landlord (the PRC government) controls the electricity, the Wi-Fi, and can change the rules of the lease at any time. You're betting on the performer's talent (the company's business), but the performance can be disrupted by factors completely outside the performer's control.

🧩 Final Takeaway

So-Young is a story of a market-leading platform in a hot sector, hamstrung by structural and geopolitical risks. The improved 2025 results are a positive sign, but the profound uncertainties tied to its Chinese operations and U.S. listing status dominate the narrative and are the most critical factors for any investor to weigh.

Company Contact: Xing Jin, CEO & Interim CFO Address: 2/F, East Tower, Poly Plaza, No. 66 Xiangbin Road, Chaoyang District, Beijing, 100012, China Phone: +86 (10)-8790-2012 Email: [email protected]