So-Young: Highly Attractive Risk-Reward Profile

Cavenagh Research
9.44K Followers

Summary

  • So-Young is a small-cap internet company in China. The company operates the country’s leading online platform to connect buyers and sellers of medical aesthetic solutions.
  • So-Young has 4.4 million monthly active users, which the company claims to be highly loyal and engaged.
  • Speculators might find significant value based on three pillars: (1) the company can either find growth, (2) sustain/slightly increase profitability (3), or distribute net cash to shareholders.
  • I calculate a fair base-case target price of $4.92/share and assign a Strong BUY recommendation on >400% upside potential.
  • However, given the speculative nature of the trade, I also assign a High-Risk label.

Collage of hands reaching up with colourful dots in background

We Are/DigitalVision via Getty Images

Thesis

Most readers might agree that there are some amazing opportunities for China-based small/mid-cap ADR stocks, as many of these stocks are down between 70% - 90%, and now trade at highly attractive multiples. I understand that this sector comes

This article was written by

9.44K Followers
Experience as an investment analyst for a major BB-Bank, as well as private equity consultant for MBB. Currently working towards the CFA charter, having completed I&II. Passion for risk-assets (Growth, Contrarian, Emerging Market) ex-colleague and close friend of Investor Express

Analyst’s Disclosure:I/we have a beneficial long position in the shares of SY either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Not financial advise.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

About SY Stock

SymbolLast Price% Chg
Market Cap
PE
Yield
Rev Growth (YoY)
Short Interest
Prev. Close
Compare to Peers

More on SY

Related Stocks

SymbolLast Price% Chg
SY
--