1、Table of ContentsUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549FORM 20-F(Mark One)REGISTRATION STATEMENT PURSUANT TO SECTION 12(b)OR(g)OF THE SECURITIES EXCHANGE ACT OF 1934ORANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934ORFor the fiscal year

2、 ended December 31,2023.TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934ORSHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934Date of event requiring this shell company reportFor the transition period from to Commission fil

3、e number:001-38878So-Young International Inc.(Exact name of Registrant as specified in its charter)NA(Translation of Registrants name into English)Cayman Islands(Jurisdiction of incorporation or organization)Tower E,Ronsin Technology CenterChaoyang District,Beijing 100012Peoples Republic of China(Ad

4、dress of principal executive offices)Hui Zhao,Chief Financial OfficerTower E,Ronsin Technology Center,Chaoyang District,Beijing 100012Peoples Republic of ChinaPhone:+86(10)-8790-2012Email:(Name,Telephone,Email and/or Facsimile number and Address of Company Contact Person)Securities registered or to

5、be registered pursuant to Section 12(b)of the Act.Title of Each Class Trading Name of Each Exchange On Which RegisteredAmerican depositary shares,13 of which represent 10Class A ordinary shares,par value US$0.0005 per share*SY The Nasdaq Stock Market LLC(The Nasdaq GlobalMarket)*Not for trading,but

6、only in connection with the listing onthe Nasdaq Global Market of American depositary shares.Securities registered or to be registered pursuant to Section 12(g)of the ActNone(Title of Class)Securities for which there is a reporting obligation pursuant to Section 15(d)of the ActNone(Title of Class)Ta

7、ble of ContentsIndicate the number of outstanding shares of each of the issuers classes of capital or common stock as of the close of the period covered by the annualreport:As of December 31,2023,there were 75,422,436 ordinary shares outstanding,par value of US$0.0005 per share,being the sum of 63,4

8、22,436 Class Aordinary shares(excluding treasury shares),par value of US$0.0005 per share and 12,000,000 Class B ordinary shares,par value of US$0.0005 per share.Indicate by check mark if the registrant is a well-known seasoned issuer,as defined in Rule 405 of the Securities Act.Yes NoIf this report

9、 is an annual or transition report,indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d)of theSecurities Exchange Act of 1934.Yes NoNote Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d)o

10、f the Securities Exchange Act of1934 from their obligations under those Sections.Indicate by check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934during the preceding 12 months(or for such shorter period that the r

11、egistrant was required to file such reports),and(2)has been subject to such filingrequirements for the past 90 days.Yes NoIndicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 ofRegulation S-T(232.405 of t

12、his chapter)during the preceding 12 months(or for such shorter period that the registrant was required to submit such files).Yes NoIndicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,or an emerging growth company.Seethe definitions

13、of“large accelerated filer,”“accelerated filer,”and“emerging growth company”in Rule 12b-2 of the Exchange Act.Large accelerated filer Accelerated filer Non-accelerated filer Emerging growth company If an emerging growth company that prepares its financial statements in accordance with U.S.GAAP,indic

14、ate by check mark if the registrant has elected notto use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a)of theExchange Act.The term“new or revised financial accounting standard”refers to any update issued by the

15、Financial Accounting Standards Board to its AccountingStandards Codification after April 5,2012.Indicate by check mark whether the registrant has filed a report on and attestation to its managements assessment of the effectiveness of its internal controlover financial reporting under Section 404(b)o

16、f the Sarbanes-Oxley Act(15 U.S.C.7262(b)by the registered public accounting firm that prepared orissued its audit report.If securities are registered pursuant to Section 12(b)of the Act,indicate by check mark whether the financial statements of the registrant included in thefiling reflect the corre

17、ction of an error to previously issued financial statements.Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive based compensation receivedby any of the registrants executive officers during the relevant recovery period pursua

18、nt to 240.10D-1(b).Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:U.S.GAAP International Financial Reporting Standards as issued by the International Accounting Standards Board Other If“Other”has been checked in re

19、sponse to the previous question,indicate by check mark which financial statement item the registrant has elected to follow.Item 17 Item 18If this is an annual report,indicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of the Exchange Act).Yes No(APPLICABLE ONLY

20、TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12,13 or 15(d)of the Securities ExchangeAct of 1934 subsequent to the distribution of securities under a plan co

21、nfirmed by a court.Yes NoTable of ContentsiTABLE OF CONTENTSINTRODUCTION1FORWARD-LOOKING STATEMENTS4Part I5Item 1.IDENTITY OF DIRECTORS,SENIOR MANAGEMENT AND ADVISERS5Item 2.OFFER STATISTICS AND EXPECTED TIMETABLE5Item 3.KEY INFORMATION5Item 4.INFORMATION ON THE COMPANY60Item 4A.UNRESOLVED STAFF COM

22、MENTS100Item 5.OPERATING AND FINANCIAL REVIEW AND PROSPECTS100Item 6.DIRECTORS,SENIOR MANAGEMENT AND EMPLOYEES114Item 7.MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS126Item 8.FINANCIAL INFORMATION129Item 9.THE OFFER AND LISTING131Item 10.ADDITIONAL INFORMATION131Item 11.QUANTITATIVE AND QUALITAT

23、IVE DISCLOSURES ABOUT MARKET RISK147Item 12.DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES147Part II150Item 13.DEFAULTS,DIVIDEND ARREARAGES AND DELINQUENCIES150Item 14.MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS150Item 15.CONTROLS AND PROCEDURES150Item 16A.AU

24、DIT COMMITTEE FINANCIAL EXPERT151Item 16B.CODE OF ETHICS151Item 16C.PRINCIPAL ACCOUNTANT FEES AND SERVICES152Item 16D.EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES.152Item 16E.PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS153Item 16F.CHANGE IN REGISTRANTS CERTIFY

25、ING ACCOUNTANT153Item 16G.CORPORATE GOVERNANCE154Item 16H.MINE SAFETY DISCLOSURE154Item 16I.DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS154Item16J.INSIDER TRADING POLICIES154Item16K.CYBERSECURITY155Part III157Item 17.FINANCIAL STATEMENTS157Item 18.FINANCIAL STATEMENTS157Item 1

26、9.EXHIBITS157SIGNATURES160Table of Contents1INTRODUCTIONUnless otherwise indicated and except where the context otherwise requires,references in this annual report on Form 20-F to:“ADRs”are to the American depositary receipts that evidence our ADSs;“ADSs”are to our American depositary shares,with ev

27、ery 13 ADSs representing 10 Class A ordinary shares;“Class A ordinary shares”are to our Class A ordinary shares,par value US$0.0005 per share;“Class B ordinary shares”are to our Class B ordinary shares,par value US$0.0005 per share;“mobile MAUs”are to the sum of(i)the number of unique mobile devices

28、 that have accessed our platform through our So-Young mobile app at least once during a month,and(ii)the number of unique Weixin users that have accessed our platformthrough our Weixin mini programs at least once during a month.The numbers of our mobile MAUs are calculated usinginternal company data

29、 that has not been independently verified,and we treat each distinguishable device and Weixin useraccount as a separate user for purposes of calculating mobile MAUs,although inaccuracy may result from the possibility thatsome individuals may use more than one mobile device,may share the same mobile

30、device with other individuals,and/or mayuse both our mobile app and Weixin mini programs to access our platform;“monthly UVs”of ,are to the number of unique IP address that various internet browsers apply to access ourwebsite,from either PC end or mobile end,at least once during a month.The numbers

31、of our monthly UVs of are calculated using internal company data that has not been independently verified,and we treat each distinguishable IPaddress as a separate user for purposes of calculating monthly UVs,although inaccuracy may result from the possibility thatsome individuals may have more than

32、 one IP address and/or share the same IP address with other individuals to access ourplatform;“the variable interest entities,”“the VIEs”and“the consolidated affiliated entities”are to Beijing So-Young Technology Co.,Ltd.,or Beijing So-Young,and Beijing Chiyan Medical Beauty Consulting,Ltd.,or Beiji

33、ng Chiyan;“our WFOE”are to So-Young Wanwei Technology Consulting Co.,Ltd.,or Beijing Wanwei;“RMB”and“Renminbi”are to the legal currency of mainland China;“So-Young,”“we,”“us,”“our company”and“our”are to So-Young International Inc.,our Cayman Islands holding company,its subsidiaries,and in the contex

34、t of describing our operations and consolidated financial information,the VIEs and thesubsidiaries of the VIEs;“shares”or“ordinary shares”are to our Class A and Class B ordinary shares,par value US$0.0005 per share;“US$,”“U.S.dollars,”“$,”and“dollars”are to the legal currency of the United States;an

35、d“Wuhan Miracle”are to Wuhan Miracle Laser Systems,Inc.Unless otherwise noted,all translations from Renminbi to U.S.dollars and from U.S.dollars to Renminbi in this annual report aremade at a rate of RMB7.0999 to US$1.00,the exchange rate in effect as of December 29,2023 as set forth in the H.10 sta

36、tistical release ofThe Board of Governors of the Federal Reserve System.We make no representation that any Renminbi or U.S.dollar amounts could havebeen,or could be,converted into U.S.dollars or Renminbi,as the case may be,at any particular rate,or at all.Table of Contents2Summary of Risk FactorsAn

37、investment in our ADSs or Class A ordinary shares involves significant risks.Below is a summary of material risks we face,organized under relevant headings.These risks are discussed more fully in“Item 3.Key InformationD.Risk Factors.”Risks Related to Our Business and IndustryRisks and uncertainties

38、related to our business and industry include,but are not limited to,the following:the online medical aesthetic service industry is rapidly evolving,which makes it difficult to evaluate our future prospects;we have experienced revenue and profitability declines in the past,and we cannot guarantee tha

39、t we will be able to maintainrevenue or profitability growth in the future.If we are unable to maintain growth,our business and prospects may be materiallyand adversely affected;we may be subject to consumer claims,regulatory or professional investigations and litigations regarding the medicalinform

40、ation and services offered on our platform,which could materially and adversely affect our brand,reputation,and resultsof operations;characterization of our business as engaging in medical,drug and/or medical device advertisement distribution in Chinawithout proper licenses or permits may have mater

41、ial impacts on our operations;we face risks associated with our acquisition of Wuhan Miracle and its business;if we fail to anticipate user preferences and provide high-quality and reliable content in a cost-effective manner,we may not beable to attract and retain users to remain competitive;if cont

42、ent providers do not continue to contribute content that is high-quality,reliable or otherwise valuable to our users,wemay experience a decline in user traffic and user engagement;our business may be materially and adversely affected by an unfavorable market perception of the overall medical aesthet

43、icindustry;we depend significantly on the strength of our brand and reputation.Any failure to maintain and enhance,or any damage to,our brand image or reputation could materially and adversely affect our business,results of operations,financial condition andprospects;if we fail to meet the changes o

44、r developments in the regulatory framework in China with respect to the provision of onlinemedical aesthetic services industry,our reputation may be harmed and our financial condition and results of operations may bematerially and adversely affected;we face risks related to health epidemics,natural

45、disasters,and other outbreaks,which could significantly disrupt ouroperations;andour business is subject to data privacy laws and regulations in jurisdictions other than China.Any failure or perceived failure tocomply with such laws and regulations could have a material and adverse impact on our bus

46、iness,financial condition andresults of operations.Table of Contents3Risks Related to Our Corporate StructureRisks and uncertainties related to our corporate structure include,but are not limited to,the following:if the PRC government finds that the agreements that establish the structure for operat

47、ing our operations in China do notcomply with regulations of mainland China relating to the relevant industries,or if these regulations or the interpretation ofexisting regulations change in the future,we could be subject to severe penalties or be forced to relinquish our interests inthose operation

48、s.we rely on contractual arrangements with the consolidated affiliated entities and their respective shareholders for our businessoperations,which may not be as effective as direct ownership in providing operational control;andany failure by the consolidated affiliated entities or their respective s

49、hareholders to perform their obligations under ourcontractual arrangements with them would have a material and adverse effect on our business.Risks Related to Doing Business in ChinaRisks and uncertainties related to doing business in China include,but are not limited to,the following:the PCAOB had

50、historically been unable to inspect our auditor in relation to their audit work performed for our financialstatements and the inability of the PCAOB to conduct inspections over our auditor in the past has deprived our investors withthe benefits of such inspections;Our ADSs may be prohibited from tra

51、ding in the United States under the HFCAA,in the future if the PCAOB is unable toinspect or investigate completely auditors located in China.The delisting of the ADSs,or the threat of their being delisted,maymaterially and adversely affect the value of your investment.Risks Related to Our ADSsRisks

52、and uncertainties related to our ADSs include,but are not limited to,the following:the trading price of our ADSs has been and is likely to continue to be volatile,which could result in substantial losses toinvestors;our dual-class voting structure limits your ability to influence corporate matters a

53、nd could discourage others from pursuing anychange of control transactions that holders of our Class A ordinary shares and ADSs may view as beneficial;andwe cannot guarantee that any share repurchase program will enhance long-term shareholder value,and share repurchases couldincrease the volatility

54、of the price of our ADSs and could diminish our cash reserves.Table of Contents4FORWARD-LOOKING STATEMENTSThis annual report contains forward-looking statements that reflect our current expectations and views of future events.Theforward-looking statements are contained principally in the sections en

55、titled“Item 3.Key InformationD.Risk Factors”“Item 4.Information on the CompanyB.Business Overview”and“Item 5.Operating and Financial Review and Prospects.”Known and unknownrisks,uncertainties and other factors,including those listed under“Item 3.Key InformationD.Risk Factors,”may cause our actual re

56、sults,performance or achievements to be materially different from those expressed or implied by the forward-looking statements.You can identify some of these forward-looking statements by words or phrases such as“may,”“will,”“expect,”“anticipate,”“aim,”“estimate,”“intend,”“plan,”“believe,”“is/are li

57、kely to,”“potential,”“continue”or other similar expressions.We have based theseforward-looking statements largely on our current expectations and projections about future events that we believe may affect our financialcondition,results of operations,business strategy and financial needs.These forwar

58、d-looking statements include statements relating to:our mission,goals;our ability to retain and increase the number of users and expand our service offerings;our future business development,financial conditions and results of operations;expected changes in our revenues,costs or expenditures;the tren

59、ds in,expected growth and the market size of the online medical aesthetics industry,both in the PRC and globally;our expectations regarding demand for and market acceptance of our services;our expectations regarding our relationships with users and service providers;our use of proceeds;competition i

60、n our industry;general economic and business conditions in the market we have business;andrelevant government policies and regulations relating to our industry.These forward-looking statements involve various risks and uncertainties.Although we believe that our expectations expressed inthese forward

61、-looking statements are reasonable,our expectations may later be found to be incorrect.Our actual results could be materiallydifferent from our expectations.Important risks and factors that could cause our actual results to be materially different from ourexpectations are generally set forth in“Item

62、 3.Key InformationD.Risk Factors”“Item 4.Information on the CompanyB.BusinessOverview”and“Item 5.Operating and Financial Review and Prospects”and other sections in this annual report.You should read thoroughlythis annual report and the documents that we refer to with the understanding that our actua

63、l future results may be materially different fromand worse than what we expect.We qualify all of our forward-looking statements by these cautionary statements.Table of Contents5PART IITEM 1.IDENTITY OF DIRECTORS,SENIOR MANAGEMENT AND ADVISERSNot applicable.ITEM 2.OFFER STATISTICS AND EXPECTED TIMETA

64、BLENot applicable.ITEM 3.KEY INFORMATIONOur Holding Company Structure and Contractual Arrangements with the Consolidated Affiliated EntitiesSo-Young International Inc.is not a Chinese operating company,but rather a Cayman Islands holding company with no equityownership in its consolidated affiliated

65、 entities.Our Cayman Islands holding company does not conduct business operations directly.Weconduct our operations in mainland China through(i)our subsidiaries in mainland China and(ii)the consolidated affiliated entities withwhich we have maintained contractual arrangements and their subsidiaries

66、in mainland China.Laws and regulations of mainland Chinaimpose certain restrictions or prohibitions on foreign ownership of companies that engage in certain value-added telecommunicationservices,internet audio-video program services and certain other businesses.Accordingly,we operate these businesse

67、s in mainland Chinathrough the consolidated affiliated entities and their subsidiaries,and rely on contractual arrangements among our subsidiaries,theconsolidated affiliated entities and their nominee shareholders to control the business operations of the consolidated affiliated entities.Theconsolid

68、ated affiliated entities are consolidated for accounting purposes,but are not entities in which our Cayman Islands holding company,or our investors,own equity.Revenues contributed by the consolidated affiliated entities,excluding inter-company transactions,accountedfor 93.0%,78.9%and 80.4%of our tot

69、al revenues for the years ended December 31,2021,2022 and 2023,respectively.As used in thisannual report,“we,”“us,”“our company,”“our,”or“So-Young”refers to So-Young International Inc.,its subsidiaries,and,in the context ofdescribing our operations and consolidated financial information,the consolid

70、ated affiliated entities and their subsidiaries in mainland China.Investors in our ADSs are not purchasing equity interest in the consolidated affiliated entities in mainland China,but instead are purchasingequity interest in a holding company incorporated in the Cayman Islands.A series of contractu

71、al agreements,including equity pledge agreement,exclusive option agreement,exclusive business cooperationagreement,power of attorney and spousal consent letter,have been entered into by and among our subsidiaries,the consolidated affiliatedentities and their respective shareholders.Terms contained i

72、n each set of contractual arrangements with the consolidated affiliated entitiesand their respective shareholders are substantially similar.Despite the lack of legal majority ownership,our Cayman Island holding companyis considered the primary beneficiary of the consolidated affiliated entities and

73、consolidates the consolidated affiliated entities and theirsubsidiaries as required by Accounting Standards Codification topic 810,Consolidation.Accordingly,we treat the consolidated affiliatedentities as the consolidated entities under U.S.GAAP and we consolidate the financial results of the consol

74、idated affiliated entities in theconsolidated financial statements in accordance with U.S.GAAP.For more details of these contractual arrangements,see“Item 4.Information on the CompanyC.Organizational StructureContractual Arrangements with the Consolidated Affiliated Entities and TheirRespective Shar

75、eholders.”However,the contractual arrangements may not be as effective as direct ownership in providing us with control over theconsolidated affiliated entities and we may incur substantial costs to enforce the terms of the arrangements.If the consolidated affiliatedentities or the nominee sharehold

76、ers fail to perform their respective obligations under the contractual arrangements,we could be limited inour ability to enforce the contractual arrangements that give us effective control over the consolidated affiliated entities,and theseagreements have not been tested in courts of mainland China.

77、Furthermore,if we are unable to maintain effective control,we would not beable to continue to consolidate the financial results of these entities in our financial statements.See“Item 3.Key InformationD.RiskFactorsRisks Related to Our Corporate StructureWe rely on contractual arrangements with the co

78、nsolidated affiliated entities and theirrespective shareholders for our business operations,which may not be as effective as direct ownership in providing operational control”and“Item 3.Key InformationD.Risk FactorsRisks Related to Our Corporate StructureThe shareholders of the consolidated affiliat

79、edentities may have potential conflicts of interest with us,which may materially and adversely affect our business and financial condition.”Table of Contents6There are also substantial uncertainties regarding the interpretation and application of current and future laws,regulations and rulesof mainl

80、and China regarding the status of the rights of our Cayman Islands holding company with respect to its contractual arrangementswith the consolidated affiliated entities and their nominee shareholders.It is uncertain whether any new laws or regulations of mainlandChina relating to variable interest e

81、ntity structures will be adopted or if adopted,what they would provide.If we or any of the consolidatedaffiliated entities is found to be in violation of any existing or future laws or regulations of mainland China,or fail to obtain or maintain anyof the required permits or approvals,the PRC regulat

82、ory authorities would have broad discretion to take action in dealing with suchviolations or failures.See“Item 3.Key InformationD.Risk FactorsRisks Related to Our Corporate StructureIf the PRC governmentfinds that the agreements that establish the structure for operating our operations in China do n

83、ot comply with regulations of mainland Chinarelating to the relevant industries,or if these regulations or the interpretation of existing regulations change in the future,we could be subjectto severe penalties or be forced to relinquish our interests in those operations”and“Uncertainties exist with

84、respect to the interpretationand implementation of the PRC Foreign Investment Law and how it may impact the viability of our current corporate structure,corporategovernance and business operations.”Our corporate structure is subject to risks associated with our contractual arrangements with the cons

85、olidated affiliated entities.Ourcompany and its investors may never have a direct ownership interest in the businesses that are conducted by the consolidated affiliatedentities.Uncertainties in the legal system of mainland China could limit our ability to enforce these contractual arrangements,and t

86、hesecontractual arrangements have not been tested in a court of law.If the PRC government finds that the agreements that establish the structurefor operating our business in China do not comply with laws and regulations of mainland China,or if these regulations or the interpretationof existing regul

87、ations change or are interpreted differently in the future,we and the consolidated affiliated entities could be subject to severepenalties or be forced to relinquish our interests in those operations.This would result in the consolidated affiliated entities beingdeconsolidated.The majority of our as

88、sets,including the necessary licenses to conduct business in China,are held by the consolidatedaffiliated entities.The majority of our revenues are generated by the consolidated affiliated entities.An event that results in thedeconsolidation of the consolidated affiliated entities would have a mater

89、ial effect on our operations and result in the value of the securitiesof our company diminish substantially or even become worthless.Our company,our subsidiaries and consolidated affiliated entities inmainland China,and investors of our company face uncertainty about potential future actions by the

90、PRC government that could affect theenforceability of the contractual arrangements with the consolidated affiliated entities and,consequently,significantly affect the financialperformance of the consolidated affiliated entities and our company as a whole.So-Young International Inc.may not be able to

91、 repay itsindebtedness,and the ADSs of our company may decline in value or become worthless,if we are unable to assert our contractual controlrights over the assets of our subsidiaries in mainland China and consolidated affiliated entities that conduct all or substantially all of ouroperations.For a

92、 detailed description of the risks associated with our corporate structure,please refer to risks disclosed under“Item 3.KeyInformationD.Risk FactorsRisks Related to Our Corporate Structure.”Other Risks related to our Operations in Mainland ChinaWe face various risks and uncertainties related to doin

93、g business in China.Our business operations are primarily conducted inChina,and we are subject to complex and evolving laws and regulations of mainland China.For example,we face risks associated withregulatory approvals on offshore offerings,anti-monopoly regulatory actions,and oversight on cybersec

94、urity and data privacy.We also facerisks associated with the lack of inspection by the Public Company Accounting Oversight Board,or the PCAOB,on our auditors asdiscussed under“The Holding Foreign Companies Accountable Act.”These risks could result in a material adverse change in ouroperations and th

95、e value of our ADSs,significantly limit or completely hinder our ability to continue to offer securities to investors,or causethe value of such securities to significantly decline.For a detailed description of risks related to doing business in China,“Item 3.D.KeyInformationRisk FactorsRisks Related

96、 to Doing Business in China.”PRC governments significant authority in regulating our operations and its oversight and control over offerings conducted overseasby,and foreign investment in,China-based issuers could significantly limit or completely hinder our ability to offer or continue to offersecu

97、rities to investors.Implementation of industry-wide regulations in this nature may cause the value of such securities to significantlydecline.For more details,see“Item 3.Key InformationD.Risk FactorsRisks Related to Doing Business in ChinaThe PRCgovernments significant oversight and discretion over

98、our business operation could result in a material adverse change in our operations andthe value of our ADSs.”Table of Contents7Risks and uncertainties arising from the legal system in China,including risks and uncertainties regarding the enforcement of lawsand quickly evolving rules and regulations

99、in China,could result in a material adverse change in our operations and the value of our ADSs.For more details,see“Item 3.Key InformationD.Risk FactorsRisks Related to Doing Business in ChinaUncertainties with respect tothe legal system of mainland China could adversely affect us.”The Holding Forei

100、gn Companies Accountable ActThe HFCAA states that if the SEC determines that we have filed audit reports issued by a registered public accounting firm that hasnot been subject to inspection by the PCAOB for two consecutive years,the SEC shall prohibit our shares or ADSs from being traded on anationa

101、l securities exchange or in the over-the-counter trading market in the United States.On December 16,2021,the PCAOB issued areport to notify the SEC of its determination that the PCAOB was unable to inspect or investigate completely registered public accountingfirms headquartered in mainland China an

102、d Hong Kong,including our auditor.In May 2022,the SEC conclusively listed us as aCommission-Identified Issuer under the HFCAA following the filing of our annual report on Form 20-F for the fiscal year ended December31,2021.On December 15,2022,the PCAOB issued a report that vacated its December 16,20

103、21 determination and removed mainlandChina and Hong Kong from the list of jurisdictions where it is unable to inspect or investigate completely registered public accounting firms.For this reason,we were not identified as a Commission-Identified Issuer under the HFCAA after we file our annual report

104、on Form 20-Ffor the fiscal year ended December 31,2022 and do not expect to be identified as such after we file this annual report on Form 20-F.Eachyear,the PCAOB will determine whether it can inspect and investigate completely audit firms in mainland China and Hong Kong,amongother jurisdictions.If

105、PCAOB determines in the future that it no longer has full access to inspect and investigate completely accounting firmsin mainland China and Hong Kong and we continue to use an accounting firm headquartered in one of these jurisdictions to issue an auditreport on our financial statements filed with

106、the Securities and Exchange Commission,we would be identified as a Commission-IdentifiedIssuer following the filing of the annual report on Form 20-F for the relevant fiscal year.There can be no assurance that we would not beidentified as a Commission-Identified Issuer for any future fiscal year,and

107、 if we were so identified for two consecutive years,we wouldbecome subject to the prohibition on trading under the HFCAA.For more details,see“Item 3.Key InformationD.Risk FactorsRisksRelated to Doing Business in ChinaThe PCAOB had historically been unable to inspect our auditor in relation to their

108、audit workperformed for our financial statements and the inability of the PCAOB to conduct inspections over our auditor in the past has deprived ourinvestors with the benefits of such inspections”and“Item 3.Key InformationD.Risk FactorsRisks Related to Doing Business in ChinaOur ADSs may be prohibit

109、ed from trading in the United States under the HFCAA,in the future if the PCAOB is unable to inspect orinvestigate completely auditors located in China.The delisting of the ADSs,or the threat of their being delisted,may materially andadversely affect the value of your investment.”Cash Flows through

110、Our OrganizationWe have established stringent controls and procedures for cash flows within our organization.Each transfer of cash between ourCayman Islands holding company and a subsidiary,the consolidated affiliated entities or the subsidiaries of the consolidated affiliatedentities is subject to

111、internal approval.The cash inflows of the Cayman Islands holding company were primarily generated from the proceedswe received from our public offerings of ordinary shares,historical financing activities and cash provided by our operating activities.In2021,2022 and 2023,the Cayman Islands holding co

112、mpany transferred cash in the total amount of RMB860.0 million,nil and RMB38.0million(US$5.4 million)to our subsidiaries in mainland China,the consolidated affiliated entities and their subsidiaries through our offshoreintermediate holding entities.For the years ended December 31,2021,2022 and 2023,

113、no assets other than cash were transferred between theCayman Islands holding company and a subsidiary,a consolidated affiliated entity or its subsidiary,no subsidiaries paid dividends or madeother distributions to the holding company,and no dividends or distributions were paid or made to U.S.investo

114、rs.Pursuant to the ExclusiveBusiness Cooperation Agreements between our wholly-owned subsidiary in mainland China and the VIEs,the amount of service fee andpayment method shall be determined by the wholly-owned subsidiary in mainland China.The VIEs have paid RMB826.5 million,RMB264.0 million and RMB

115、264.1 million(US$37.2 million)of service fee to the wholly-owned subsidiary in mainland China under theVIE arrangements for the years ended December 31,2021,2022 and 2023,respectively.The VIEs expect to continue to settle any servicefees incurred under the Exclusive Business Cooperation Agreements.T

116、able of Contents8As a Cayman Islands holding company,we may receive dividends from our subsidiaries in mainland China.Under the EnterpriseIncome Tax Law of the PRC,and related regulations,dividends,interests,rent or royalties payable by a foreign-invested enterprise,such asour subsidiaries in mainla

117、nd China,to any of its foreign non-resident enterprise investors,and proceeds from any such foreign enterpriseinvestors disposition of assets(after deducting the net value of such assets)are subject to a 10%withholding tax,unless the foreignenterprise investors jurisdiction of incorporation has a ta

118、x treaty with China that provides for a reduced rate of withholding tax.Undistributed profits earned by foreign-invested enterprises prior to January 1,2008 are exempted from any withholding tax.The CaymanIslands,where So-Young International Inc.,the direct parent company of our subsidiaries,is inco

119、rporated,does not have such a tax treatywith China.Hong Kong has a tax arrangement with China that provides for a 5%withholding tax on dividends subject to certain conditionsand requirements,such as the requirement that the Hong Kong resident enterprise own at least 25%of the enterprise in mainland

120、Chinadistributing the dividend at all times within the 12-month period immediately preceding the distribution of dividends and be a“beneficialowner”of the dividends.For example,So-Young Hong Kong Limited,which directly owns our subsidiary in mainland China,BeijingWanwei,is incorporated in Hong Kong.

121、However,if So-Young Hong Kong Limited is not considered to be the beneficial owner of thedividends paid to it by Beijing Wanwei under the tax circulars promulgated in February and October 2009,such dividends would be subjectto withholding tax at a rate of 10%.If our subsidiaries in mainland China de

122、clare and distribute profits to us,such payments will be subjectto withholding tax,which will increase our tax liability and reduce the amount of cash available to our company.See“Item 3.KeyInformation-D.Risk Factors-Risks Related to Our Corporate Structure-We may rely on dividends and other distrib

123、utions on equity paid byour subsidiaries in mainland China to fund any cash and financing requirements we may have,and any limitation on the ability of oursubsidiaries in mainland China to make payments to us and any tax we are required to pay could have a material and adverse effect on ourability t

124、o conduct our business”for more details.If our holding company in the Cayman Islands or any of our subsidiaries outside of Chinawere deemed to be a“resident enterprise”under the PRC Enterprise Income Tax Law,it would be subject to enterprise income tax on itsworldwide income at a rate of 25%.See“Ite

125、m 3.Key Information-D.Risk Factors-Risks Related to Doing Business in China-If we areclassified as a resident enterprise in mainland China for PRC income tax purposes,such classification could result in unfavorable taxconsequences to us and our shareholders that are non-resident of mainland China or

126、 ADS holders.”For purposes of illustration,the following discussion reflects the hypothetical taxes that might be required to be paid within China,assuming that:(i)we have taxable earnings,and(ii)we determine to pay dividends in the future.Tax calculation(1)Hypothetical pre-tax earnings(2)100%Tax on

127、 earnings at statutory rate of 25%(3)(25)%Net earnings available for distribution 75%Withholding tax at standard rate of 10%(4)(7.5)%Net distribution to Parent/Shareholders 67.5%Notes:(1)For purposes of this example,the tax calculation has been simplified.The hypothetical book pre-tax earnings amoun

128、t,not consideringtiming differences,is assumed to equal taxable income in China.(2)Under the terms of VIE agreements,our subsidiaries in mainland China may charge the VIEs for services provided to VIEs.Theseservice fees shall be recognized as expenses of the VIEs,with a corresponding amount as servi

129、ce income by our subsidiaries inmainland China and eliminate in consolidation.For income tax purposes,our subsidiaries and VIEs in mainland China file income taxreturns on a separate company basis.The service fees paid are recognized as a tax deduction by the VIEs and as income by oursubsidiaries in

130、 mainland China and are tax neutral.(3)Certain of our subsidiaries and VIEs qualifies for a 15%preferential income tax rate in China.However,such rate is subject toqualification,is temporary in nature,and may not be available in a future period when distributions are paid.For purposes of thishypothe

131、tical example,the table above reflects a maximum tax scenario under which the full statutory rate would be effective.Table of Contents9(4)The PRC Enterprise Income Tax Law imposes a withholding income tax of 10%on dividends distributed by a foreign investedenterprise,or FIE,to its immediate holding

132、company outside of China.A lower withholding income tax rate of 5%is applied if theFIEs immediate holding company is registered in Hong Kong or other jurisdictions that have a tax treaty arrangement with China,subject to a qualification review at the time of the distribution.For purposes of this hyp

133、othetical example,the table above assumes amaximum tax scenario under which the full withholding tax would be applied.The table above has been prepared under the assumption that all profits of the VIEs will be distributed as fees to our subsidiaries inmainland China under tax neutral contractual arr

134、angements.If,in the future,the accumulated earnings of the VIEs exceed the service feespaid to our subsidiaries in mainland China(or if the current and contemplated fee structure between the intercompany entities is determinedto be non-substantive and disallowed by Chinese tax authorities),the VIEs

135、could make a non-deductible transfer to our subsidiaries inmainland China for the amounts of the stranded cash in the VIEs.This would result in such transfer being non-deductible expenses for theVIEs but still taxable income for the subsidiaries in mainland China.Under laws and regulations of mainla

136、nd China,we are subject to restrictions on foreign exchange and cross-border cash transfers,including to U.S.investors.Our ability to distribute earnings to the holding company and U.S.investors is also limited.We are a CaymanIslands holding company,and we may rely on dividends and other distributio

137、ns on equity paid by our subsidiaries in mainland China,whichin turn relies on consulting and other fees paid to us by the consolidated affiliated entities,for our cash and financing requirements,includingthe funds necessary to pay dividends and other cash distributions to our shareholders and servi

138、ce any debt we may incur.When any of oursubsidiaries in mainland China incurs debt on its own behalf,the instruments governing the debt may restrict its ability to pay dividends ormake other distributions to us.Our subsidiaries ability to distribute dividends is based upon their distributable earnin

139、gs.Current regulations of mainland Chinapermit our subsidiaries in mainland China to pay dividends to their respective shareholders only out of their accumulated profits,if any,determined in accordance with accounting standards and regulations in mainland China.In addition,each of our subsidiaries i

140、n mainlandChina and the consolidated affiliated entities is required to set aside at least 10%of its after-tax profits each year,if any,to fund a statutoryreserve until such reserve reaches 50%of its registered capital.Each of such entities in China is also required to further set aside a portion of

141、its after-tax profits to fund the employee welfare fund,although the amount to be set aside,if any,is determined at the discretion of its boardof directors.These reserves are not distributable as cash dividends.In 2023,our subsidiary in mainland China,Wuhan Miracle,has declared and paid a dividend f

142、or an aggregate amount of RMB36.0million(US$5.1 million)to its shareholders.Specifically,Wuhan Miracle paid RMB16.5 million(US$2.3 million)to Beijing Wanwei andRMB 15.0 million(US$2.1 million)to Wuhan Zeqi Technology Co.,Ltd.(“Wuhan Zeqi”),both of whom are our subsidiaries in mainlandChina.Wuhan Zeq

143、i later distributed RMB13.0 million(US$1.8 million)from the dividend payment to Beijing Wanwei.The dividendpayments are not subject to withholding tax.In addition,our subsidiaries in mainland China,the consolidated affiliated entities and their subsidiaries generate their revenueprimarily in Renminb

144、i,which is not freely convertible into other currencies.As a result,any restriction on currency exchange may limit theability of our subsidiaries in mainland China to pay dividends to us.For more details,see“Item 3.Key InformationD.Risk FactorsRisks Related to Our Corporate StructureWe may rely on d

145、ividends and other distributions on equity paid by our subsidiaries in mainlandChina to fund any cash and financing requirements we may have,and any limitation on the ability of our subsidiaries in mainland China tomake payments to us and any tax we are required to pay could have a material and adve

146、rse effect on our ability to conduct our business.”and“Risks Related to Doing Business in China-Regulation of mainland China of loans to and direct investment in entities in mainland Chinaby offshore holding companies and governmental control of currency conversion may delay or prevent us from using

147、 the proceeds of ourinitial public offering to make loans or to make additional capital contributions to our subsidiaries in mainland China and variable interestentities,which could materially and adversely affect our liquidity and our ability to fund and expand our business.”Table of Contents10Perm

148、issions Required from the PRC Authorities for Our OperationsWe conduct our business primarily through our subsidiaries and consolidated affiliated entities in China.Our operations in Chinaare governed by laws and regulations of mainland China.As of the date of this annual report,our subsidiaries in

149、mainland China,consolidated affiliated entities and their subsidiaries have obtained the requisite licenses and permits from the PRC government authoritiesthat are material for the business operations of our holding company,the consolidated affiliated entities in China,including,among others,the Val

150、ue-Added Telecommunications Services Operating License for providing information services via the internet,or the ICP License.Wehave not obtained certain approvals,licenses and permits that may be required for some aspects of our business operations.For example,weare required to but have not obtaine

151、d the Audio-Visual License for providing internet audio-visual program services through our onlineplatform,including the provision of original short videos created by ourselves and our service providers.We do not consider such services tobe material to our business and the revenues generated through

152、 the provision of such services account for an insignificant portion of our totalrevenues.We are not eligible to apply for an Audio-Visual License under the current regulatory regime,because we are not a wholly state-owned or state-controlled entity as required for this license under laws of mainlan

153、d China.Given the uncertainties of interpretation andimplementation of relevant laws and regulations and the enforcement practice by relevant government authorities,we may be required toobtain additional licenses,permits,filings or approvals for the functions and services of our platform in the futu

154、re.For more detailedinformation,see“Item 3.Key InformationD.Risk FactorsRisks Related to Our Business and IndustryOur failure to obtain andmaintain approvals,licenses or permits applicable to our business could have a material adverse impact on our business,financial conditionsand results of operati

155、ons.”Furthermore,under current laws,regulations and regulatory rules of mainland China,we,our subsidiaries in mainland China andthe consolidated affiliated entities may be required to fulfill filing and reporting procedures to the China Securities Regulatory Commission,or the CSRC,in connection with

156、 offering and listing in an overseas market.For example,if we plan to conduct securities offering in anoverseas market different from the market where we are currently listed,we may be required to fulfill filing and reporting requirement.Inaddition to the above filing and reporting requirements,we m

157、ay also be required to report to the CSRC within three business days upon theoccurrence and public disclosure of any the following events:(i)change of control;(ii)investigation or sanctions by any overseas securitiesregulators or overseas authorities;(iii)change of listing status or listing segment;

158、(iv)voluntary or mandatory delisting;and(v)materialchange of principal business operations after overseas issuance and listing.Additionally,we,our subsidiaries in mainland China and theconsolidated affiliated entities may also be required to go through cybersecurity review by the Cyberspace Administ

159、ration of China.As ofthe date of this annual report,we have not been subject to any cybersecurity review made by the administration.If we fail to complete thefiling or reporting procedures for any future offshore offering or listing or if any of the specified events occur,we may face sanctions by th

160、eCSRC or other PRC regulatory authorities,which may include fines and penalties on our operations in China,limitations on our operatingprivileges in China,restrictions on or prohibition of the payments or remittance of dividends by our subsidiaries in China,restrictions on ordelays to our future fin

161、ancing transactions offshore,or other actions that could have a material and adverse effect on our business,financialcondition,results of operations,reputation and prospects,as well as the trading price of our ADSs.For more detailed information,see“Item3.Key Information-D.Risk Factors-Risks Relating

162、 to Doing Business in China-The approval of and/or filing with the CSRC or other PRCgovernment authorities may be required in connection with our offshore offerings under laws of mainland China,and,if required,we cannotpredict whether or for how long we will be able to obtain such approval or comple

163、te such filing.”and“-Risks Related to Our Business andIndustry-Our business is subject to data privacy laws and regulations in jurisdictions other than China.Any failure or perceived failure tocomply with such laws and regulations could have a material and adverse impact on our business,financial co

164、ndition and results ofoperations.”Financial Information Related to the Consolidated Affiliated EntitiesThe following table presents the condensed consolidating schedule of financial position for the consolidated affiliated entities andother entities as of the dates presented.Table of Contents11Selec

165、ted Condensed Consolidated Statements of Income/(Loss)Information For the year ended December 31,2023 Primary VIEs andOther Beneficiary VIEs EliminatingConsolidated Parent Subsidiaries of VIEs Subsidiaries Adjustments TotalsRMB(in thousands)Third-party revenues from services and sales 461 293,814 1,

166、203,754 1,498,029Inter-company revenues from services and sales 868 280,701 19,466 (301,035)Total revenues 1,329 574,515 1,223,220 (301,035)1,498,029Third-party costs from services and sales (1,294)(154,899)(388,143)(544,336)Inter-company costs from services and sales (468)(18,605)(280,781)299,854 T

167、otal costs (1,762)(173,504)(668,924)299,854 (544,336)Total operating expenses(8,786)(11,746)(441,816)(552,945)553 (1,014,740)Income/(Loss)from subsidiaries and VIEs 17,230 (2,015)9,171 (24,386)Other non-operating income 12,836 31,701 23,448 931 68,916Income/(Loss)before tax 21,280 17,507 (8,186)2,28

168、2 (25,014)7,869Income tax(expenses)/benefits (277)10,838 7,514 18,075Net income 21,280 17,230 2,652 9,796 (25,014)25,944Net(income)/loss attributable to noncontrolling interests (4,667)3 (4,664)Net income/(loss)attributable to So-Young InternationalInc.21,280 17,230 (2,015)9,799 (25,014)21,280 For t

169、he year ended December 31,2022 PrimaryVIEs andOtherBeneficiary VIEsEliminatingConsolidated Parent Subsidiaries of VIEs Subsidiaries Adjustments Totals RMB (in thousands)Third-party revenues from services and sales 5,385 259,784 992,705 1,257,874Inter-company revenues from services and sales 3,742 25

170、1,739 12,203 (267,684)Total revenues 9,127 511,523 1,004,908 (267,684)1,257,874Third-party costs from services and sales (130)(157,068)(236,094)(393,292)Inter-company costs from services and sales (496)(12,641)(253,929)267,066 Total costs (626)(169,709)(490,023)267,066 (393,292)Total operating expen

171、ses(9,659)(5,632)(418,412)(533,684)(967,387)(Loss)/Income from subsidiaries and VIEs(55,104)(69,345)(22,408)146,857 Other non-operating(expenses)/income(791)13,291 10,521 (7,288)15,733(Loss)/Income before tax(65,554)(53,185)(88,485)(26,087)146,239 (87,072)Income tax(expenses)/benefits (1,919)20,915

172、1,969 20,965Net(loss)/income(65,554)(55,104)(67,570)(24,118)146,239 (66,107)Net(income)/loss attributable to noncontrolling interests (1,775)2,328 553Net(loss)/income attributable to So-Young InternationalInc.(65,554)(55,104)(69,345)(21,790)146,239 (65,554)Table of Contents12 For the year ended Dece

173、mber 31,2021 Primary VIEs and OtherBeneficiary VIEs Eliminating Consolidated Parent Subsidiaries of VIEs Subsidiaries Adjustments Totals RMB (In thousands)Third-party revenues from services and sales 7,244 112,058 1,573,161 1,692,463Inter-company revenues from service fees 21,744 584,914 358 (607,01

174、6)Total revenues 28,988 696,972 1,573,519 (607,016)1,692,463Third-party costs from services and sales (2,156)(104,447)(221,286)(327,889)Inter-company costs from service fees (607,016)607,016 Total costs (2,156)(104,447)(828,302)607,016 (327,889)Total operating expenses(9,556)(18,517)(546,861)(822,21

175、0)(1,397,144)(Loss)/Income from subsidiaries and VIEs(1,412)(15,219)(79,541)96,172 Other non-operating income/(expenses)2,597 8,807 12,318 (7,557)16,165(Loss)/Income before tax(8,371)1,903 (21,559)(84,550)96,172 (16,405)Income tax(expenses)/benefits (3,315)5,608 (23,524)(21,231)Net(loss)/income(8,37

176、1)(1,412)(15,951)(108,074)96,172 (37,636)Net loss attributable to noncontrolling interests 732 28,533 29,265Net(loss)/income attributable to So-Young InternationalInc.(8,371)(1,412)(15,219)(79,541)96,172 (8,371)Table of Contents13Selected Condensed Consolidated Balance Sheets Information As of Decem

177、ber 31,2023 PrimaryVIEs andOtherBeneficiaryVIEsEliminatingConsolidated Parent Subsidiaries of VIEs Subsidiaries Adjustments Totals RMB (In thousands)Assets Cash and cash equivalents 8,228 84,120 189,736 144,035 426,119Restricted cash and term deposits 65 14,630 14,695Trade receivables 17,632 39,587

178、57,219Receivables from online payment platforms 5,005 18,153 23,158Amounts due from VIE companies 45,304 265,090 (310,394)Amounts due from Group companies 1,647,534 52,422 18,212 137,937 (1,856,105)Amount due from related parties 85 9,127 9,212Term deposits and short-term investments 283,308 572,362

179、 29,000 16,153 900,823Inventories 102,925 15,999 118,924Prepayment and other current assets 7,683 23,027 99,553 46,289 (4,778)171,774Investment in subsidiaries and VIEs 565,304 1,351,903 98,368 34,691 (2,050,266)Long-term investments 3,560 93,000 164,456 261,016Property and equipment,net 45 88,071 2

180、9,082 (416)116,782Intangible assets 117,230 28,023 145,253Deferred tax assets 1,519 52,798 23,717 78,034Operating lease right-of-use assets 58,950 59,458 118,408Goodwill 540,009 684 540,693Other non-current assets 59,844 122,661 49,950 232,455Total assets 2,512,057 2,194,106 1,898,390 831,971 (4,221

181、,959)3,214,565Liabilities Short-term borrowings 29,825 29,825Taxes payable 932 13,007 42,955 56,894Contract liabilities 25,243 78,131 103,374Salary and welfare payables 674 51,517 34,099 86,290Amounts due to VIE companies 41,928 25,372 70,637 (137,937)Amounts due to Group companies 24,856 1,601,314

182、91,998 310,394 (2,028,562)Amounts due to related parties 301 87 388Accrued expenses and other current liabilities 1,144 510 33,266 203,771 (4,778)233,913Operating lease liabilities-current 12,521 17,218 29,739Operating lease liabilities-non current 44,956 41,254 86,210Deferred tax liabilities 19,385

183、 5,697 25,082Other non-current liabilities 1,536 1,536Total liabilities 67,928 1,628,802 394,192 733,606 (2,171,277)653,251Shareholders equityNon-controlling interests 163,997 (3)(46,809)117,185So-Young International Inc.shareholders equity 2,444,129 565,304 1,340,201 98,368 (2,003,873)2,444,129Tota

184、l liabilities and shareholders equity 2,512,057 2,194,106 1,898,390 831,971 (4,221,959)3,214,565Table of Contents14 As of December 31,2022 PrimaryVIEs andOtherBeneficiaryVIEsEliminatingConsolidated Parent Subsidiaries of VIEs Subsidiaries Adjustments Totals RMB (In thousands)Assets Cash and cash equ

185、ivalents 143,100 127,411 253,646 170,263 694,420Restricted cash and term deposits 447 14,461 14,908Trade receivables 15,538 20,468 36,006Receivables from online payment platforms 3,409 11,378 14,787Amounts due from VIE companies 15,292 229,112 (244,404)Amounts due from Group companies 1,671,880 41,3

186、34 17,212 125,165 (1,855,591)Amount due from related parties 85 33,297 33,382Term deposits and short-term investments 208,938 647,011 20,006 875,955Inventories 110,742 9,738 120,480Prepayment and other current assets 6,826 18,800 74,980 36,126 (9,843)126,889Investment in subsidiaries and VIEs 531,69

187、3 1,323,281 84,826 34,691 (1,974,491)Long-term investments 93,000 134,959 227,959Property and equipment,net 92,265 24,407 (488)116,184Intangible assets 137,609 31,671 169,280Deferred tax assets 1,613 37,043 26,083 64,739Operating lease right-of-use assets 27,709 35,189 62,898Goodwill 540,009 684 540

188、,693Other non-current assets 86,516 12,777 99,293Total assets 2,562,437 2,174,742 1,824,154 721,357 (4,084,817)3,197,873Liabilities Taxes payable 4,822 20,457 49,301 74,580Contract liabilities 33,917 76,242 110,159Salary and welfare payables 416 40,188 31,928 72,532Amounts due to VIE companies 39,78

189、6 5,315 80,064 (125,165)Amounts due to Group companies 23,722 1,632,272 74,432 244,404 (1,974,830)Amounts due to related parties 5,895 5,895Accrued expenses and other current liabilities 1,004 224 46,306 186,898 (9,843)224,589Operating lease liabilities-current 19,314 30,971 50,285Operating lease li

190、abilities-non current 9,465 11,507 20,972Deferred tax liabilities 24,620 6,373 30,993Total liabilities 64,512 1,643,049 348,763 643,519 (2,109,838)590,005Shareholders equityNon-controlling interests 163,812 (6,988)(46,881)109,943So-Young International Inc.shareholders equity 2,497,925 531,693 1,311,

191、579 84,826 (1,928,098)2,497,925Total liabilities and shareholders equity 2,562,437 2,174,742 1,824,154 721,357 (4,084,817)3,197,873Table of Contents15Selected Condensed Consolidated Cash Flows Information For the year ended December 31,2023 PrimaryVIEs andOtherBeneficiaryVIEsEliminatingConsolidated

192、Parent Subsidiaries of VIEs Subsidiaries Adjustments Totals RMB (In thousands)Condensed Consolidating Schedules of Cash Flows Inter-company receipts/(payments)related to service andsales 870 238,218 (239,088)Other operating/administrative activities with externalparties(7,914)18,271 (255,721)267,865

193、 22,501Net cash(used in)/provided by operating activities(7,914)19,141 (17,503)28,777 22,501Purchase of short-term investments and term deposits(491,162)(1,219,379)(493,882)(31,000)(2,235,423)Proceeds from maturities of short-term investments andterm deposits 411,184 1,252,474 424,435 15,000 2,103,0

194、93Loans to Group companies(178,985)(241,488)(1,950)(57,680)480,103 Repayments from Group companies 237,747 26,523 589 73,982 (338,841)Other investing activities with external parties(7,161)(1,439)(61,681)(70,281)Net cash used in investing activities(21,216)(189,031)(72,247)(61,379)141,262 (202,611)B

195、orrowings under loan from Group companies 420,170 42,921 17,012 (480,103)Repayments to borrowings under loan from Groupcompanies(285,752)(42,500)(10,589)338,841 Other financing activities with external parties(125,426)25,411 (100,015)Net cash(used in)/provided by financing activities(125,426)134,418

196、 25,832 6,423 (141,262)(100,015)Effect of exchange rate changes on cash,cashequivalents and restricted cash 19,684(7,819)11,865Net decrease in cash,cash equivalents and restricted cash(134,872)(43,291)(63,918)(26,179)(268,260)Cash,cash equivalents and restricted cash at the beginningof the year 143,

197、100 127,411 253,654 176,835 701,000Cash,cash equivalents and restricted cash at the end ofthe year 8,228 84,120 189,736 150,656 432,740Table of Contents16 For the year ended December 31,2022 PrimaryVIEs andOtherBeneficiaryVIEsEliminatingConsolidated Parent Subsidiaries of VIEs Subsidiaries Adjustmen

198、ts Totals RMB (In thousands)Condensed Consolidating Schedules of Cash Flows Inter-company(payments)/receipts related to service and sales (25,089)327,117 (302,028)Other operating/administrative activities with external parties(54,390)115,125 (451,962)278,354 (112,873)Net cash(used in)/provided by op

199、erating activities(54,390)90,036 (124,845)(23,674)(112,873)Purchase of short-term investments and term deposits(201,348)(623,489)(340,433)(40,500)(1,205,770)Proceeds from maturities of short-term investments 318,785 410,000 36,000 764,785Acquisitions of subsidiaries,net of cash acquired (97,492)(97,

200、492)Loans to Group companies(82,766)(56,821)(16,646)(37,000)193,233 Repayments from Group companies 41,383 252 66,000 (107,635)Other investing activities with external parties (291)(33,444)(33,735)Net cash provided by/(used in)investing activities 76,054 (680,058)21,138 (74,944)85,598 (572,212)Borro

201、wings under loan from Group companies 92,685 37,000 63,548 (193,233)Repayments to borrowings under loan from Group companies (51,383)(56,252)107,635 Other financing activities with external parties(14,247)661 (13,586)Net cash(used in)/provided by financing activities(14,247)41,302 37,000 7,957 (85,5

202、98)(13,586)Effect of exchange rate changes on cash,cash equivalents andrestricted cash 79,877 (24,015)55,862Net increase/(decrease)in cash,cash equivalents and restricted cash 87,294 (572,735)(66,707)(90,661)(642,809)Cash,cash equivalents and restricted cash at the beginning of the year 55,806 700,1

203、46 320,361 267,496 1,343,809Cash,cash equivalents and restricted cash at the end of the year 143,100 127,411 253,654 176,835 701,000Table of Contents17 For the year ended December 31,2021 PrimaryVIEs andOtherBeneficiaryVIEsEliminatingConsolidated Parent Subsidiaries of VIEs Subsidiaries Adjustments

204、Totals RMB (In thousands)Condensed Consolidating Schedules of Cash Flows Inter-company receipts/(payments)related to service fee 19,529 826,534 (846,063)Other operating/administrative activities with external parties 12,117 (42,718)(423,823)538,711 84,287Net cash provided by/(used in)operating activ

205、ities 12,117 (23,189)402,711 (307,352)84,287Purchase of short-term investments(610,841)(1,048,963)(220,000)(40,000)(1,919,804)Proceeds from maturities of short-term investments 549,344 2,213,525 180,000 110,000 3,052,869Acquisitions of business combination,net of cash acquired (635,970)(902)(636,872

206、)Capital contribution to Group companies (860,000)860,000 Loans to Group companies(446,270)(289,903)(164,000)900,173 Repayments from Group companies 764,712 68,675 82,006 (915,393)Other investing activities with external parties (130,127)(26,244)(156,371)Net cash provided by/(used in)investing activ

207、ities 256,945 304,562 (1,027,325)(39,140)844,780 339,822Capital contribution from Group companies 860,000 (860,000)Borrowings under loan from Group companies 575,270 35,000 289,903 (900,173)Repayments to borrowings under loan from Group companies (846,716)(68,677)915,393 Other financing activities w

208、ith external parties(216,743)(216,743)Net cash(used in)/provided by financing activities(216,743)(271,446)895,000 221,226 (844,780)(216,743)Effect of exchange rate changes on cash,cash equivalents andrestricted cash(2,813)(4,782)(1,647)(9,242)Net increase/(decrease)in cash,cash equivalents and restr

209、icted cash 49,506 5,145 268,739 (125,266)198,124Cash,cash equivalents and restricted cash at the beginning of theyear 6,300 695,001 51,622 392,762 1,145,685Cash,cash equivalents and restricted cash at the end of the year 55,806 700,146 320,361 267,496 1,343,809Table of Contents18B.Capitalization and

210、 IndebtednessNot applicable.C.Reasons for the Offer and Use of ProceedsNot applicable.D.Risk FactorsRisks Related to Our Business and IndustryThe online medical aesthetic service industry is rapidly evolving,which makes it difficult to evaluate our future prospects.The online medical aesthetic servi

211、ce industry is still at an early stage of development and is rapidly evolving.There are few well-established and widely-accepted online medical aesthetic service platforms.Although we launched our online medical aesthetic servicebusiness in November 2013 and we are now the leader in the online medic

212、al aesthetic service industry in China,we have not yetdemonstrated our ability to generate significant revenue.We believe that our business model is novel and we have a limited operating historyon which investors can evaluate our business and prospects.As our business develops and as we respond to c

213、ompetition,we may continue tointroduce new service offerings and make adjustments to our existing services and to our business operation in general.Any significantchange to our business model that does not achieve expected results may have a material and adverse impact on our financial condition and

214、results of operations.It is therefore difficult to effectively assess our future prospects.The online medical aesthetic platform service industry may not develop as expected.Prospective users and medical serviceproviders may not be familiar with the development of online medical aesthetic service ma

215、rkets and may have difficulties distinguishing ourservices from those of our competitors.Convincing prospective users and medical service providers of the value of using our services isimportant to the success of our business.You should consider our business and prospects in light of the risks and c

216、hallenges we encounter or may encounter given the rapidlyevolving market in which we operate and our limited operating history.These risks and challenges include our ability to,among other things:manage our future growth;offer personalized and competitive online medical aesthetic services;increase t

217、he utilization of our service by existing and new users;maintain and enhance our relationships with medical service providers and our other partners;navigate the evolving regulatory environment;enhance our technology infrastructure to support the growth of our business;improve our operational effici

218、ency;attract,retain and motivate talented employees;cope with economic fluctuations;anddefend ourselves against legal and regulatory actions.Table of Contents19We have experienced revenue and profitability declines in the past,and we cannot guarantee that we will be able to maintain revenue orprofit

219、ability growth in the future.If we are unable to maintain growth,our business and prospects may be materially and adverselyaffected.Our total revenues decreased by 25.7%from RMB1,692.5 million in 2021 to RMB1,257.9 million in 2022,and increased by 19.1%to RMB1,498.0 million(US$211.0 million)in 2023.

220、Our gross profit decreased by 36.6%from RMB1,364.6 million in 2021 to RMB864.6million in 2022,and increased by 10.3%to RMB953.7 million(US$134.3 million)in 2023.Our gross margin decreased from 80.6%in 2021to 68.7%in 2022,and further decreased to 63.7%in 2023.We cannot assure you that we will be able

221、 to maintain revenue or profitabilitygrowth in the future.Our total revenues and gross profit may decline in the future for a number of possible reasons,including decreasingconsumer spending,changes in regulations and government policies,increasing competition,slowing down of Chinas medical aestheti

222、cindustry,emergence of alternative business models,and general economic conditions.If we are unable to maintain growth,investorsperceptions of our business and business prospects may be adversely affected and the market price of our ADSs could decline.We may be subject to consumer claims,regulatory

223、or professional investigations and litigations regarding the medical informationoffered on our platform and services and products offered by us,which could materially and adversely affect our brand,reputation,andresults of operations.We work with medical aesthetic service providers when a medical or

224、 beauty treatment is performed for our user through reservationfrom our platform.In 2022,we expanded our presence in the medical aesthetics industry from online to offline with a new service called So-Young Prime.By collaborating with established medical aesthetics providers,we offer a range of stan

225、dardized non-surgical aesthetictreatments.Our service covers the entire process from service reservation,reception,consultation,equipment and material verification,topost-treatment care.Moreover,we supply equipment and consumables for the entire process.Our partnering providers reserve a serviceroom

226、 dedicated to serving So-Young Prime customers,with delegated personnel provided by us,whose responsibility is to work on site as anadvisor and supervise the whole service process.We also enter into separate service agreements with doctors at our partnering providers,who represent So-Young while pro

227、viding medical aesthetic services on the partnering providers sites and are responsible for performingservices,including online consultation and medical aesthetic procedures.The doctors follow our procedures and instructions whenperforming services.We have implemented a screening procedure through v

228、erifying the qualifications and required licenses of medicalservice providers and also have recorded the contact person details of such medical service providers.However,we cannot assure you that allthe information of the medical service providers we have is updated in a timely manner.Pursuant to th

229、e PRC Law on the Protection of Rightsand Interests of Consumers,under the circumstances where the users suffer injuries or damages due to the service reserved on our platform,especially treatment we offered in collaboration with our partnering medical aesthetic service providers under our own brand,

230、they may bringclaims or legal proceedings against us as a platform service provider if we fail to provide the real names,addresses and valid contact detailsof the medical service providers in the event that users request such information for purposes of seeking compensation from the medicalservice p

231、roviders.Furthermore,if we know or should have known that medical service providers we collaborate with infringe upon thelegitimate rights and interests of users but we fail to take necessary measures,we may be subject to joint and several liability with themedical service providers.Users may also s

232、eek refunds in such situations.Table of Contents20Any incorrect decisions on the part of our service providers or any incorrect decisions made by our own medical treatment facilitiesmay result in undesirable or unexpected outcomes,including complications,injuries and potentially death in the most ex

233、treme cases.Wemay be subject to complaints,claims or legal proceedings initiated by our users as a result of any negative physical reaction to servicesreserved on our platform or services provided by ourselves.In addition,unsatisfactory services provided by the doctors may result in usersbring compl

234、aints and claims to us.We have implemented a strict procedure to verify the qualifications and required licenses of the medicalservice providers we partner with.However,we cannot assure you that all our medical service providers are fully licensed and qualified asrequired by laws of mainland China.P

235、ursuant to the PRC E-Commerce Law that became effective on January 1,2019,we are required toverify the identities of the persons doing online businesses over our platform(such as medical service providers on our platform),includingbut not limited to verification of business licenses and other requir

236、ed qualifications or licenses,and shall take necessary steps if we find outor should have found out that services provided by a service provider do not comply with the requirements of health and safety protections.If we are deemed to have failed to verify the service providers qualifications and lic

237、enses,or failed to otherwise perform our obligations as aplatform with respect to services that are pertinent to the life and health of consumers provided through our platform,we may be subject topotential sanctions under laws of mainland China,including suspension of certain business activities,rec

238、tification,compensation,andadministrative penalties,and may face civil and criminal liabilities.See“Item 4.Information on the CompanyB.Business OverviewRegulationsRegulations on Consumer Protection”and“RegulationRegulations on E-commerce.”Moreover,failure to performmedical services in accordance wit

239、h various evolving laws and regulations of mainland China could expose us to penalties,claims,regulatory actions or litigations.As of the date of this annual report,certain of the consolidated affiliated entities are engaging in aestheticmedical services.We may not be able to avoid malpractice,medic

240、al negligence or misconduct exposure,including malpractice,medicalnegligence or misconduct by our personnel,machine or equipment error.We cannot assure you that we will not be involved in malpractice,medical negligence or misconduct claims in the future.These claims may be brought against us by way

241、of legal proceedings or lodging offormal complaints with the licensing regulatory bodies.Any non-compliance with the regulations may expose us to regulatory actions andadministrative penalties,and negatively affect our business operation and financial position.See“Item 4.Information on the CompanyB.

242、Business OverviewRegulationRegulations on Medical Liabilities”And“RegulationRegulations on Aesthetic Medical Services.”In addition,as medical aesthetic service focuses on improving our users physical appearance,users may have varying expectationsof the magnitude of improvement that may result from t

243、he medical aesthetic services.Users who are dissatisfied with the services receivedmay request refunds and other compensation from us,complain on our platform and other social media platforms and/or file legal claimsagainst us.We have experienced complaints from our users in the past,and we cannot a

244、ssure you that we will be able to successfully manageusers expectation and prevent their complaints,allegations and other claims in the future.Such complaints,allegations and other claims,regardless of merits,may have a material adverse effect on our reputation,business,results of operations,financi

245、al condition and prospects.Although we sometimes offer complimentary services,refunds and/or other insignificant amount of monetary compensations to addressusers complaints,the amounts of which have been immaterial historically,we cannot assure you that we can successfully address all usercomplaints

246、 in the future.Moreover,we require all platform users to have full legal capacity,and minors to be accompanied by their legalguardians,when they use medical services reserved or accessed through our platform.However,we cannot assure you that we can prevent allmedical service providers from performin

247、g medical procedures on minors without parental consent,or prevent all minors from obtainingmedical treatment from service providers without providing parental consent.Such non-compliance by users who are minors or by medicalservice providers could materially and adversely affect our brand image and

248、 reputation.Moreover,we have engaged in the research,development,production,sales and agency of laser and other optoelectronic medicalequipment since July 2021 and the sales of medical beauty products produced by third parties,which mainly include cosmetic injectables,since 2022.For the equipment,Wu

249、han Miracle has established a comprehensive quality management system and production controlprocedures with an experienced quality control department.We have also adopted a series of measures for selecting third-party provider forour sales of medical beauty products.However,we cannot guarantee that

250、all of the equipment and products are free of defects orsubstantially meet the relevant quality standards.If the equipment and products are defective,of poor quality,or cause any adverse reaction,we could be subject to liability claims,complaints or adverse publicity that could result in the imposit

251、ion of penalties or suspension oflicenses by government authorities or damages imposed on us by courts.We may also need to find suitable replacement products,which maylower our profit margins and result in delays in services to our customers.Table of Contents21We may be subject to regulatory or prof

252、essional investigations and litigations.Any complaint,claim or legal proceeding,regardlessof merit,could adversely affect our brand image and reputation.In addition,any legal proceeding that may be brought against us could divertmanagement resources and incur extra costs.A settlement or successful c

253、laim against us can result in legal costs,damages,compensationand reputational damage to use and may adversely affect our business,results of operations,financial condition and prospects.Characterization of our business as engaging in medical,drug and/or medical device advertisement distribution in

254、China without properlicenses or permits may have material impacts on our operations.We dedicate ourselves to providing transparent information.The information available on our platform includes but is not limited toregistration or practicing license details and contact information of medical service

255、 provides,description of different types of medicalaesthetic services,the price of such services and reviews and Beauty Diaries associated with the service providers contributed by users.Wealso connect our users with medical service providers.We have adopted internal control and platform regulation

256、measures seeking to ensurethe authenticity and pertinence of the medical aesthetic information available on our platform and endeavor to prevent the informationdisseminated on our platform from being considered medical,drug or other medical device advertisements.We believe it is improbable that PRC

257、governmental authorities will deem the content or the format of the information disseminatedfrom and displayed on our platform to constitute medical,drug or other medical device advertisements,and we have not been subject to anyregulatory authoritys inquiries or investigations in connection with the

258、 content or format of information disseminated from and displayed onour platform which could have a material adverse effect on our business,financial condition,results of operations and prospects.However,as advertisement is currently defined vaguely and broadly under the relevant laws and regulation

259、s of mainland China and the availableregulatory interpretations,we cannot assure you that the information provided by medical aesthetic services providers on our platform willnot be deemed by relevant authorities as advertisement.If certain information listed on our platform is considered medical ad

260、vertisement,it will subject us to regulations that may havematerial impacts on our operations.Medical,drug and/or medical devices advertisement must be approved by relevant PRC authoritiesbefore they are distributed,and distributors,among other obligations,are required to review the applicable licen

261、ses and permits of themedical service providers,ensure the content displayed is fair and accurate,and take steps to monitor the content of advertisements displayedon their platforms.In addition,distributors are required to label advertisements from other information so that consumers will not be mis

262、led.Furthermore,we may be required to scale back,rearrange or alter the content or format of information displayed on our platform,therebyaffecting the fundamental of our business model.As a result,compliance with laws and regulations applicable to the advertisement industrycould materially and adve

263、rsely affect our business prospects,results of operations and financial condition.In addition,we will also be subjectto increased liability under these laws and regulations and may incur additional costs,such as fines or other penalties,if we fail to comply.Such liabilities and costs could have a ma

264、terial adverse effect on our business,financial condition,results of operations and prospects.See“Item 4.Information on the CompanyB.Business OverviewRegulationsRegulations on Advertising.”Moreover,we may be subjectto additional taxes applicable to the advertisement industry.Our expansion plans,incl

265、uding our plans to expand into new business lines,business categories and geographic areas,are subject touncertainties and risks,and we may not be able to successfully manage our expanded operations.To serve our expanding user base and our users evolving medical service needs,we continually expand i

266、nto new geographic areasand offer new services.For example,in 2022,we expanded our presence in the medical aesthetics industry from online to offline bycollaborating with established medical aesthetics providers.Expansion into diverse locations,new business lines and business categoriesinvolves new

267、risks and challenges.Our lack of familiarity with these new geographic areas and service offerings may make it more difficultfor us to anticipate user demand and preferences.Table of Contents22We have mainly focused on service providers in the major urban centers in China,and we plan to expand our n

268、ationwide networkcoverage to penetrate further into Chinas smaller cities.We also plan to expand further into international markets.There is no assurance thatour geographic expansion strategies will be successful.As we enter markets and countries that are new to us,we must tailor our services andbus

269、iness model to the unique circumstances of such markets and countries,which can be complex,difficult and costly,and divertmanagement and personnel resources.In addition,we may face competition from platforms that may have more experience with operationsin such markets and countries.In addition,laws

270、and business practices that favor local competitors or prohibit or limit foreign ownership ofcertain businesses could slow our growth.Our failure to adapt our practices,systems,processes and business models effectively to userpreferences of each country into which we expand,could also affect our gro

271、wth.Certain markets in which we operate have,or certain newmarkets in which we may operate in the future may have,lower margins than our more mature markets,which could have a negative impacton our overall margins as our revenues from these markets grow over time.We also plan to continue to introduc

272、e and expand new services on our platform.Expansion into diverse new products and servicecategories involves new risks and challenges.Our lack of familiarity with these new service offerings and lack of relevant customer data maymake it more difficult for us to anticipate customer demand and prefere

273、nces and manage legal,operational,competitive and other risks.Wecannot assure you that we will be able to recoup our investments in introducing these new service categories.If we fail to execute ourexpansion strategies effectively or address the challenges and risks we encounter when executing our e

274、xpansion strategies,our business andresults of operations could be materially and adversely affected.We face risks associated with our acquisition of Wuhan Miracle and its business.We cannot assure you that the acquired Wuhan Miracle will bring the anticipated benefits to us.We have limited experien

275、ce withthe research and development,production,sales and agency of medical equipment and we may not be able to successfully integrate WuhanMiracle into our existing business.We face uncertainties and challenges in navigating the complex regulatory environment,competingeffectively in product performa

276、nce,reliability,quality and safety,and developing and/or upgrading products and services as well astechnologies to meet everchanging user needs.If implemented ineffectively or if impacted by unforeseen negative economic or marketconditions or other factors,we may not realize the full anticipated ben

277、efits of the acquisition of Wuhan Miracle.Our failure to meet thechallenges involved in realizing the anticipated benefits of the acquisition of Wuhan Miracle could cause an interruption of,or a loss ofmomentum in,our business and could adversely affect our results of operations.The acquisition and

278、integration of the businesses may resultin material unanticipated problems,expenses,liabilities,competitive responses and diversion of managements attention,and we may recordimpairment charges or write-offs in connection therewith if the anticipated benefits of the acquisition fail to realize.We wou

279、ld be subject toand may not be able to successfully manage a variety of additional risks associated with respect to combining Wuhan Miracle with us.Theserisks include,but are not limited to,the following:challenges in the integration of operations and systems and in managing the expanded operations

280、of a larger and more complexcompany;challenges in achieving anticipated business opportunities and growth prospects from combining the businesses of WuhanMiracle with the rest of our businesses;rules and measures governing the production,sales and agency of medical equipment are complex and evolving

281、,and we maynot be able to navigate such complex regulatory environment or to respond to future changes in regulatory environment in aneffective and timely manner;if our products do not achieve and maintain market acceptance,our business and results of operations could be materiallyadversely impacted

282、.Because the markets Wuhan Miracle operated in are highly competitive,customers may choose topurchase our competitors products or services,which would result in reduced revenue and loss of market share.reduction or interruption in supply or other manufacturing difficulties may adversely affect our m

283、anufacturing operations andrelated product sales;if our products contain defects or encounter performance problems,we may have to recall our products,incur additionalunforeseen costs,and our reputation may suffer;Table of Contents23we are subject to product liability and negligence claims relating t

284、o the use of our products and other legal proceedings thatcould materially adversely affect our financial condition,divert managements attention,and harm our business;if we lose key personnel of Wuhan Miracle or are unable to attract and retain additional personnel,our ability to compete willbe harm

285、ed and increases in labor costs could materially adversely impact our business and results of operations;andunanticipated additional costs and expenses resulting from the integration of additional personnel,operations,products,services,technology and increased internal controls and financial reporti

286、ng responsibilities could materially adversely impactour business and results of operations.If we fail to anticipate user preferences and provide high-quality and reliable content in a cost-effective manner,we may not be able toattract and retain users to remain competitive.Our success depends on ou

287、r ability to maintain and grow user engagement on our platform.To attract and retain users and competeagainst our competitors,we must continue to offer high-quality and reliable content to provide our users with a superior online medicalaesthetic service experience.To this end,we must continue to pr

288、oduce original content and source new professional and user-generatedcontent in a cost-effective manner.Given that we operate in a rapidly evolving industry,we need to anticipate user preferences and industrychanges and respond to such changes timely and effectively.If we fail to continue to offer h

289、igh-quality and reliable content to our users thatcater to the needs and preferences,we may suffer from reduced user traffic and engagement,and our business,financial condition and resultsof operations may be materially and adversely affected.In addition to content generated by our users,we rely on

290、our in-house team to generate creative ideas for original content and tosupervise the original content origination and production process,and we intend to continue to invest resources in content production.Weface competition for qualified personnel in a limited pool of high-quality creative talent.I

291、f we are not able to compete effectively for talentsor attract and retain top talents at reasonable costs,our original content production capabilities would be negatively impacted.Anydeterioration in our in-house content production capability,inability to attract creative talents at reasonable costs

292、 or losses in personnel maymaterially and adversely affect our business and operating results.If content providers do not continue to contribute content that is high-quality,reliable or otherwise valuable to our users,we mayexperience a decline in user traffic and user engagement.In addition to cont

293、ent produced by us,our ability to provide users with interesting,reliable and industry-specific content depends oninformation and content contributed by our users.We believe that one of our competitive advantages is the quality,quantity and open natureof the content on our platform,and that access t

294、o reliable,rich and industry-specific content is one of the main reasons users visit So-Young.We seek to foster a broader and more engaged user community,and we encourage influencers,such as social media celebrities and keyopinion leaders,and doctors to use our platform to share interesting and high

295、-quality content.If content providers do not continue to contribute content to our platform as a result of any factors,such as government policychanges and use of alternative communication channels,or if the providers contents are not high-quality,reliable or otherwise valuable tousers,we may be una

296、ble to provide users with attractive content,and our user base and user engagement may decline.If we experience adecline in the number of users or the level of user engagement,our business and operating results could be materially and adversely affected.Our business may be materially and adversely a

297、ffected by an unfavorable market perception of the overall medical aesthetic industry.Medical aesthetic services have been gaining popularity in recent years.However,we believe that existing and potential users of themedical aesthetic service industry remain cautious about the risks inherent in medi

298、cal aesthetic services and are therefore sensitive to anynegative review,comment or allegations on the industry in general.Any such allegations,negative news or research results regardingaccident,ineffectiveness of services,health risks or inadequate services standard by any medical aesthetic servic

299、e provider,regardless ofmerits,may lead to a deterioration in consumer confidence in and market perception of the medical aesthetic service industry,and could leadto reduced demand for medical aesthetic services.Moreover,market perception of the medical aesthetic industry may be adversely affectedby

300、 external factors beyond our control,including restrictive government policies and guidance.As a participant to the industry,we couldconsequently be exposed to reputational harm and our business,results of operations,financial condition and prospects may be adverselyaffected.Table of Contents24We de

301、pend significantly on the strength of our brand and reputation.Any failure to maintain and enhance,or any damage to,our brandimage or reputation could materially and adversely affect our business,results of operations,financial condition and prospects.Our reputation and brand recognition,which depen

302、d on cultivating awareness,trust and confidence among our current or potentialusers,is critical to the success of our business.We believe a well-recognized brand is crucial to increasing our user base and,in turn,facilitating our effort to monetize our services and enhancing our attractiveness to ou

303、r users and service providers.Our reputation and brandare vulnerable to many threats that can be difficult or impossible to control,and costly or impossible to remediate.Regulatory inquiries orinvestigations,lawsuits and other claims in the ordinary course of our business,perceptions of conflicts of

304、 interest and rumors,includingcomplaints made by our competitors,among other things,could substantially damage our reputation,even if they are baseless orsatisfactorily addressed.In addition,any perception that the quality of our medical aesthetic services may not be the same as or better than that

305、of othermedical aesthetic service platforms can damage our reputation.Any negative media publicity about any of the services available on ourplatform or product or service quality problems at other online medical aesthetic service platforms,including at our competitors,may alsonegatively impact our

306、reputation and brand.Negative perceptions of medical aesthetic products and services,or the industry in general,mayreduce the number of users coming to our platform and the number of transactions conducted through our platform,which would adverselyimpact our revenues and liquidity position.If we fai

307、l to meet the changes or developments in the regulatory framework in China with respect to the provision of online medicalaesthetic services industry,our reputation may be harmed and our financial condition and results of operations may be materially andadversely affected.As the online medical aesth

308、etic service industry in China is at a relatively early stage of development,applicable laws andregulations may be adopted from time to time to address new issues and may require additional licenses and permits other than those wecurrently have obtained.As a result,substantial uncertainties exist wi

309、th regard to the implementation and interpretation of and compliancewith current and any future laws and regulations applicable to our business.We cannot assure you that we will be able to meet all theapplicable regulatory requirements or comply with all the applicable regulations and guidelines at

310、all times.Failure to do so could result insanctions,fines,penalties or other disciplinary actions,including,among other things,limitations or prohibitions on our future businessactivities,which may harm our reputation,and consequently materially and adversely affect our financial condition and resul

311、ts of operations.We face risks related to health epidemics,natural disasters,and other outbreaks,which could significantly disrupt our operations.Given the nature of the medical aesthetic industry,our business and the business of our service providers could be significantly andadversely affected by

312、health epidemics,including COVID-19,Ebola virus disease,H1N1 flu,H7N9 flu,avian flu,Severe Acute RespiratorySyndrome,or SARS,or other diseases.In addition,our business operations could be disrupted if any of our employees is suspected of havingCOVID-19,Ebola virus disease,H1N1 flu,H7N9 flu,avian flu

313、,SARS or other epidemic disease,since it could require our employees to bequarantined and/or our offices to be disinfected.COVID-19 resulted in quarantines,travel restrictions and temporary closure of businessesand facilities in China and worldwide between 2020 and 2022.The extent to which the pande

314、mic impacts our results of operations goingforward will depend on future developments,including the frequency,duration and extent of future outbreaks of COVID-19,the appearanceof new variants with different characteristics,the effectiveness of efforts to contain or treat cases,and future actions tha

315、t may be taken inresponse to these developments.In addition,substantially all of our revenues and workforce are concentrated in mainland China.Our resultsof operations could be adversely affected to the extent that any of these epidemics harms the Chinese economy in general.We are also vulnerable to

316、 natural disasters and other calamities.Fire,floods,typhoons,earthquakes,power loss,telecommunications failures,break-ins,war,riots,terrorist attacks or similar events may give rise to server interruptions,breakdowns,system failures,technology platform failures or internet failures,which could cause

317、 the loss or corruption of data or malfunctions of softwareor hardware as well as adversely affect our ability to provide services on our platform.Table of Contents25Our business generates and processes data in the ordinary course,and we are required to comply with laws of mainland China relatingto

318、privacy,data security and cybersecurity.The improper collection,use or disclosure of data could have a material and adverse impacton our business,financial condition and results of operations.As a business that provides mobile apps and generates revenue primarily from online subscriptions,we face ri

319、sks inherent inhandling and protecting data and are subject to various regulatory requirements relating to the security and privacy of data.The challengeswe face relating to our handling and protection of data include,in particular:protecting the data in and hosted on our system,including against at

320、tacks on our system by outside parties or fraudulentbehavior or improper use by our employees and business partners;addressing concerns related to privacy and sharing,safety,security and other factors;andcomplying with applicable laws,rules and regulations relating to the collection,use,storage,tran

321、sfer,disclosure and securityof personal information,including any requests from regulatory and government authorities relating to these data.In general,we expect that data security and data protection compliance will receive greater attention and focus from regulators,bothin China and other jurisdic

322、tions,as well as attract continued or greater public scrutiny and attention going forward,which could increase ourcompliance costs and subject us to heightened risks and challenges associated with data security,cybersecurity and protection.If we areunable to manage these risks,we could receive negat

323、ive publicity or become subject to penalties,including fines,suspension of business andrevocation of required licenses,and our reputation and results of operations could be materially and adversely affected.For risks relating toour compliance with data privacy laws and regulations in jurisdictions o

324、ther than China,see“-Our business is subject to data privacy lawsand regulations in jurisdictions other than China.Any failure or perceived failure to comply with such laws and regulations could have amaterial and adverse impact on our business,financial condition and results of operations.”The regu

325、latory and enforcement regime in mainland China with regard to data security,cybersecurity and data protection isevolving and may be subject to different interpretations or significant changes.Moreover,different PRC regulatory bodies,including theStanding Committee of the National Peoples Congress,t

326、he Ministry of Industry and Information Technology,or the MIIT,the CyberspaceAdministration of China,the Ministry of Public Security and the SAMR,have enforced data privacy and protections laws and regulationswith varying standards and applications.See“Item 4.Information on the Company-B.Business Ov

327、erview-Regulation-Regulations onInternet Security”and“-Regulations on Privacy Protection.”The following are examples of certain recent regulatory activities in mainlandChina in this area:In December 2021,the Cyberspace Administration of China,together with other authorities,jointly promulgated the R

328、evisedCybersecurity Review Measures,which became effective on February 15,2022 and replaces its predecessor regulation.Pursuant to theRevised Cybersecurity Review Measures,critical information infrastructure operators that procure internet products and services must besubject to the cybersecurity re

329、view if their activities affect or may affect national security.The Revised Cybersecurity Review Measuresfurther stipulate that critical information infrastructure operators or network platform operators that hold personal information of over onemillion users shall apply with the Cybersecurity Revie

330、w Office for a cybersecurity review before any initial public offering at a foreign stockexchange.As of the date of this annual report,no detailed rules or Implementation rules have been issued by any authority and we have notbeen informed that we are a critical information infrastructure operator b

331、y any government authorities.Furthermore,the exact scope of“critical information infrastructure operators”under the current regulatory regime remains unclear,and the PRC government authorities mayhave wide discretion in the interpretation and enforcement of the applicable laws.Therefore,it is uncert

332、ain whether we would be deemed tobe a critical information infrastructure operator under laws of mainland China.If we are deemed to be a critical information infrastructureoperator under the cybersecurity laws and regulations of mainland China,we may be subject to obligations in addition to what we

333、havefulfilled under cybersecurity laws and regulations of mainland China.Table of Contents26In November 2021,the Cyberspace Administration of China released the Regulations on the Network Data Security(Draft forComments).The regulations provide that data processors refer to individuals or organizations that,during their data processing activitiessuch as data collection,storage,utilization,transmis