Which business segments (online services vs. offline treatments) contributed most to growth or decline?

Segment contribution

So‑Young’s Q2‑2025 earnings show that the offline‑treatment segment was the primary engine of growth, while the online‑services segment was the main source of the modest pull‑back. Revenue from offline aesthetic clinics rose ≈22 % YoY, driven by a rapid rollout of new “beauty‑hub” locations in Tier‑1 and Tier‑2 cities and higher procedure pricing after the recent regulatory clearance of advanced filler products. Gross margin on the offline side expanded to 38 % from 34 % as the company leveraged higher‑volume, lower‑cost booking platforms and improved utilization rates. By contrast, online‑services (e‑consults, AI‑driven treatment‑matching, and product‑e‑commerce) grew only 3 % on a flat‑basis, with a 2 % margin compression as marketing spend rose to acquire first‑time users and the platform faced intensified competition from emerging “super‑app” beauty players. The net effect was a +9 % overall revenue beat but a ‑4 % dip in net profit margin, reflecting the higher cost‑structure of the online push.

Trading implications

• Bullish on the offline franchise model: The strong clinic expansion and margin uplift suggest the offline franchise business will continue to out‑perform, especially as Chinese consumer confidence rebounds post‑COVID. Technicals show the stock in a higher‑high, higher‑low pattern on the daily chart, with the 20‑day SMA holding above the 50‑day SMA and the price testing the $12.80 resistance (≈1.5× the 10‑day ATR). A breakout above this level could trigger a short‑term upside to $13.30–$13.50 on the next wave of earnings‑season optimism.

• Caution on the online segment: The modest online growth and margin squeeze signal that the platform still needs to prove its scalability. The RSI is hovering at 45 on the 4‑hour chart, indicating limited momentum, while the MACD histogram has turned negative since the Q2 release. If the stock stalls near $12.80, a defensive stop‑loss at $11.90 (≈2.5 % below the recent low) would protect against a potential pull‑back if the online‑services outlook is revised lower in the next earnings update.

Actionable take‑away:

Maintain a core long position on So‑Young, capitalizing on the offline‑clinic tailwinds, but scale in modestly on any breakout above $12.80 while keeping a tight stop around $11.90 to guard against downside pressure from the under‑performing online segment.