1. Investment Snapshot
2. Thesis
3. Valuation & Price Target
4. Business & Product Moat
5. People & Governance
6. Market & Macro
7. Financial Quality
8. Risk Register
9. Prediction Market
10. 𝕏 Posts
Discussion
1. Investment Snapshot
2. Thesis
3. Valuation & Price Target
4. Business & Product Moat
5. People & Governance
6. Market & Macro
7. Financial Quality
8. Risk Register
9. Prediction Market
10. 𝕏 Posts
Discussion
1. Investment Snapshot
2. Valuation
Discussion
Symbol
YSG
Event Date
2020-11-19
IPO Date (Actual)
2020-11-18
Sector
Consumer
Subsector
Personal Care Products
Offer Range
$10.50-$10.50
Shares Offered
58.75M
$4.5B
Implied Upside vs Midpoint
Description
Yatsen: The future of beauty Our mission is to create an exciting new journey of beauty discovery for consumers in China and around the world. Yatsen is a leader in the rapidly evolving China beauty market. Founded in 2016, we have launched three fast-growing, successful color cosmetics and skincare brands: Perfect Diary, Little Ondine, and Abby’s Choice. Together, these three brands served 23.4 million and 23.5 million DTC customers in 2019 and the nine months ended September 30, 2020, respectively. Our first brand, Perfect Diary, became the top color cosmetics brand in China in terms of online retail sales value three years after launch, according to the CIC Report. This success is due to our digitally native DTC business model that is new to China’s beauty industry. Through this model, we focus on deep customer engagement, innovative product development and personalized services. The beauty industry in China has been evolving rapidly. For many Chinese beauty consumers, massive e-commerce platforms such as Tmall, JD.com and Vipshop have become default shopping destinations. More recently, disruptive and dynamic social and content platforms such as Weixin, Douyin, Kuaishou, Bilibili and RED have been playing an increasing role in consumers’ discovery and purchase of beauty products. At the same time, large and technologically advanced ODM/OEM and packaging supply partners who have extensive experience working with renowned international beauty brands continue to strengthen their capabilities domestically. In addition to these trends, Chinese consumers, particularly those in the Gen-Z and Millennial demographics, prefer brands that offer personalized products and services and that have strong Chinese identities. China has one of the largest populations of Gen-Z and Millennials in the world, with 171.4 million Gen-Z and 231.5 million Millennials as of December 31, 2019, according to the CIC Report. As a result, we saw a significant opportunity to create a disruptive beauty brand, reimagined from the ground up, that partners with these marketing channels and supply chain players in a more integrated and unique way and provides young consumers with a superior experience and an engaging new journey of beauty discovery. With our brand platform, we believe we can continue to grow to capture an increasing share of China’s beauty industry—the largest globally at US$38.8 billion in retail sales value in 2019, according to the CIC Report. We have experienced significant growth since our inception. Our gross sales increased from RMB757.7 million in 2018 to RMB3.5 billion in 2019, representing a growth rate of 363.7% or roughly 30 times the growth rate of the broader China beauty industry in terms of retail sales value over the same time period, according to the CIC Report. Our gross sales increased from RMB2.2 billion in the nine months ended September 30, 2019 to RMB3.8 billion in the nine months ended September 30, 2020, representing a growth rate of 70.2% or roughly 16 times the growth rate of the broader China beauty industry in terms of retail sales value over the same time period, according to the CIC Report. In 2019 and the nine months ended September 30, 2020, 96.7% and 91.3% of total gross sales were generated through online channels, respectively. Additionally, Perfect Diary was the only color cosmetics brand to achieve over RMB100 million in GMV on Tmall in every month of 2019 and the nine months ended September 30, 2020, according to the CIC Report. In 2019 and the nine months ended September 30, 2020, we served 23.4 million and 23.5 million DTC customers across our brands, an increase of 236.3% from 7.0 million in 2018 and 50.0% from 15.7 million in the nine months ended September 30, 2019, respectively. Our first brand, Perfect Dairy, has received numerous industry awards and broad recognition, including: • “Second Most Favorite Chinese Domestic Brand among the Post-2000 Generation” by Tmall across all consumer categories in 2019 • No. 1 in the eye shadow, mascara and lip gloss subcategories in terms of total GMV on Tmall in 2019, according to the CIC Report • 29 fashion media awards, including “New Brand of the Year” in WWD BeautyInc International Beauty Industry Awards in 2019 • “China’s New National Brand” and “Annual Rising Power of China’s Internet Consumer Business” by CBNData in 2019 As of September 30, 2020, we had over 200 experience stores across over 90 cities in China, an increase from 40 stores at the end of 2019. We believe these stores help us drive stronger engagement with our customers by providing a physical space to sample our products and engage with our brands. To replicate the success of our existing brands, we are continuously expanding our brand portfolio to cover additional beauty product categories, consumer demographics, and price points. For example, we have recently acquired Galénic, an iconic premium skincare brand, from Pierre Fabre, a French pharmaceutical and dermo-cosmetics group, and entered into an agreement to acquire the mainland China business of a masstige skincare brand. --- Our principal executive offices are located at 32-35, 38/F, Poly Midtown Plaza, No.23 East Xuanyue Street, Haizhu District, Guangzhou 510330, People’s Republic of China. Our telephone number at this address is +86 20 3837-3543. Our registered office in the Cayman Islands is located at c/o Office of Maples Corporate Services Limited, P.O. Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands. Our main website is www.yatsenglobal.com. Our agent for service of process in the United States is Cogency Global Inc., located at 122 East 42nd Street, 18th Floor, New York, NY 10168.
Yatsen Holding Ltd annual income statement and balance sheet, FY 2022 to FY 2025, as reported in SEC filings (CNY).
| Metric | FY 2022 | FY 2023 | FY 2024 | FY 2025 |
|---|---|---|---|---|
| Revenue | — | CNY 3.4B | CNY 3.4B | CNY 4.3B |
| Gross profit | — | CNY 2.5B | CNY 2.6B | CNY 3.4B |
| Operating income | — | (CNY 913M) | (CNY 825M) | (CNY 186M) |
| Net income | — | (CNY 748M) | (CNY 708M) | (CNY 80.9M) |
| Metric | FY 2022 | FY 2023 | FY 2024 | FY 2025 |
|---|---|---|---|---|
| Total assets | — | — | CNY 4.0B | CNY 3.8B |
| Total liabilities | — | — | CNY 868M | CNY 846M |
| Total equity | CNY 4.7B | CNY 4.1B | CNY 3.1B | CNY 3.0B |
| Cash & equivalents | — | — | CNY 817M | CNY 765M |