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Core Insights - Yatsen E-commerce reported a revenue of 1 billion yuan for Q3 2025, marking a 47.5% increase year-on-year, achieving revenue growth for four consecutive quarters [1] - The color cosmetics segment grew by 25.2% year-on-year, while the skincare segment saw a significant increase of 83.2% to 491 million yuan [1] - R&D investment reached 39.76 million yuan in Q3, up 56.9% year-on-year, with R&D expense ratio increasing to 4% [1] - Since its IPO in 2020, Yatsen E-commerce has invested over 650 million yuan in R&D, maintaining an R&D expense ratio of over 3% for three consecutive years [1] - For Q4 2025, total revenue is expected to be between 1.32 billion and 1.49 billion yuan, representing a year-on-year growth of approximately 15% to 30% [1]

Third Quarter 2025 Investor Presentation Yatsen Holding Limited Disclaimer This presentation has been prepared by Yatsen Holding Limited (the "Company") solely for information purpose. By viewing or accessing the information contained in this material, you hereby acknowledge and agree that no representations, warranties or undertakings, express or implied, are made by the Company or any of its directors, shareholders, employees, agents, affiliates, advisors or representatives as to, and no reliance should b ...

Core Insights - Yatsen Holding Limited reported a significant revenue growth of 47.5% year-over-year for Q3 2025, reaching RMB998.4 million (US$140.2 million) [4][7] - The skincare brands experienced an impressive revenue increase of 83.2% year-over-year, contributing to the overall growth [4][7] - The company is focused on brand and product innovation to sustain long-term growth, with new product launches planned for the upcoming Double 11 shopping festival [3] Financial Performance - Total net revenues for Q3 2025 increased to RMB998.4 million (US$140.2 million) from RMB677.0 million in the prior year [4][7] - Gross profit rose by 51.9% to RMB780.5 million (US$109.6 million), with gross margin improving to 78.2% from 75.9% [5][7] - Operating expenses increased by 31.9% to RMB864.1 million (US$121.4 million), but as a percentage of total net revenues, they decreased to 86.5% from 96.8% [6][15] Loss and Margin Improvements - The net loss for Q3 2025 narrowed by 41.9% to RMB70.4 million (US$9.9 million) compared to RMB121.1 million in the prior year [10][11] - Non-GAAP net loss also improved, narrowing by 32.8% to RMB51.5 million (US$7.2 million) [11] - The operating loss margin improved to 8.4% from 20.9% in the prior year [9] Cash Flow and Balance Sheet - As of September 30, 2025, the company had cash, restricted cash, and short-term investments totaling RMB1.16 billion (US$162.6 million) [12] - Net cash used in operating activities for Q3 2025 was RMB126.8 million (US$17.8 million), down from RMB175.9 million in the prior year [12] Business Outlook - For Q4 2025, Yatsen expects total net revenues to be between RMB1.32 billion and RMB1.49 billion, indicating a year-over-year increase of approximately 15% to 30% [13]

Core Insights - HHLR Advisors, a fund management platform under Hillhouse Capital, reported a total market value of $4.1 billion in U.S. stocks as of the end of Q3 2025, an increase of $990 million or 32% from the previous quarter [1][2] - The firm significantly increased its holdings in Pinduoduo and Alibaba, while initiating positions in Baidu and Manbang Group, and reduced its stakes in Futu Holdings, NetEase, and Yatsen [1][5] Holdings Overview - HHLR Advisors held a total of 33 stocks at the end of Q3, with over 90% of the portfolio consisting of Chinese concept stocks, indicating a long-term bullish outlook on quality Chinese assets [2][4] - The top 10 holdings accounted for 93.46% of the total portfolio, with Pinduoduo and Alibaba being the largest positions [2][3] Major Increases - Pinduoduo remains the largest holding, with an increase of 1.6158 million shares, bringing the total to 8.5926 million shares, valued at $1.136 billion, representing 13.21% of the total portfolio [3][4] - Alibaba saw an increase of 2.14 million shares, with a total holding of 3.2897 million shares valued at $588 million, reflecting an 84.46% increase in its stock price year-to-date [4] New Positions - Baidu was newly added to the portfolio with 1.6410 million shares valued at $216.23 million, becoming the sixth-largest holding [4] - New investments also included Manbang Group and Sea, with holdings valued at $5.274 million and $3.218 million, respectively [4] Reductions - HHLR Advisors reduced its stake in Futu Holdings by 1.0741 million shares, bringing the total to 3.2382 million shares valued at $563 million, with the stock having increased over 107% year-to-date [7][8] - The firm also reduced its holdings in NetEase by 0.8729 million shares, resulting in a total of 0.7908 million shares valued at $120 million, with a year-to-date increase of 60.50% [8] - Other reductions included Yatsen, where the firm cut its position by 1.2261 million shares, and a complete exit from JD.com, Vipshop, Li Auto, and others [5][8]

Core Viewpoint - HHLR Advisors, a fund management platform under Hillhouse Capital, reported a significant increase in its US stock holdings, with a total market value of $4.1 billion as of the end of Q3 2025, reflecting a 32% increase from the previous quarter [2][3]. Holdings Summary - HHLR Advisors held a total of 33 stocks at the end of Q3, with a market value of $4.1 billion, up by $990 million from Q2 [2][3]. - The firm increased its positions in major Chinese stocks such as Pinduoduo and Alibaba, while also initiating new positions in Baidu and Manbang Group [2][5]. - The top 10 holdings accounted for 93.46% of the total portfolio, indicating a concentrated investment strategy [5]. Major Stock Movements - Pinduoduo remains the largest holding, with an increase of 1.6158 million shares, bringing the total to 8.5926 million shares, valued at $1.136 billion, which is 13.21% of the total portfolio [6][7]. - Alibaba was also significantly increased by 2.14 million shares, totaling 3.2897 million shares, valued at $588 million, with a year-to-date price increase of 84.46% [7]. - Baidu was newly added to the portfolio with 1.6410 million shares, valued at $216.23 million, benefiting from its accelerated AI commercialization [7]. Reductions and Exits - HHLR Advisors reduced its holdings in several stocks, including a decrease of 1.0741 million shares in Futu Holdings, now holding 3.2382 million shares valued at $563 million [9]. - The firm also reduced its position in NetEase by 87290 shares, bringing the total to 79080 shares, valued at $120 million [9]. - The firm completely exited positions in JD.com, Ideal Auto, and several other stocks during the quarter [8][9].

Core Insights - Yatsen Group has released "Yatsen Group Beauty Innovation Insight," marking a significant step in China's beauty industry towards scientific leadership and innovation [2][3][4] Company Overview - Yatsen Group is a leading multi-brand beauty company listed on NYSE, focusing on R&D and innovation [1][14] - The company has invested over RMB 600 million in R&D since its NYSE listing in 2020, maintaining R&D spending above 3% of annual revenue [14] Innovation and R&D - The white paper includes six chapters covering global R&D networks, technological breakthroughs, efficacy validation, and sustainable development [3] - Yatsen has published 32 peer-reviewed papers and filed 252 global patents, including 78 invention applications since 2022 [9] - The company aims to transform laboratory research into consumer impact, emphasizing the value of innovation [6] Sustainability and Social Responsibility - Yatsen has published four consecutive ESG reports since 2021 and achieved an MSCI ESG Rating of A for two years, being the only Chinese beauty company to do so [11] - The company integrates low-carbon practices in operations, with products like Perfect Diary's "Slim Heel Lipstick" receiving Product Carbon Footprint Certification [12] - Premium brands under Yatsen, such as EVE LOM and Galénic, have adopted sustainable packaging practices, including 100% FSC-certified recycled paper and refillable jar systems [13] Global Collaboration - Yatsen's Open Lab ecosystem connects over 20 research collaborations across industry, academia, and medicine, enhancing its global research capabilities [9] - The company has participated in major dermatological and cosmetic congresses, strengthening China's scientific voice in the global beauty dialogue [5]

Investment Rating - The report does not explicitly provide an investment rating for the beauty industry Core Insights - The beauty industry is experiencing a significant shift with domestic brands gaining market share, while international brands like L'Oréal are facing challenges [4][6][10] - The medical beauty sector is expanding, with companies like Juzhi Biotech and Naturals launching innovative products, indicating a trend towards cross-industry collaboration [4][6] - The soap market is evolving with a focus on high-end products and natural ingredients, appealing to environmentally conscious consumers [6] - PDRN technology is transitioning from niche medical applications to mainstream skincare, enhancing product efficacy and market accessibility [6][10] - Hong Kong is emerging as a testing ground for domestic beauty brands aiming for global expansion, leveraging its mature market and tourism recovery [6][10] - The competitive landscape is intensifying, with domestic brands dominating the top rankings and new entrants disrupting traditional market dynamics [4][6][10] Industry Environment - L'Oréal has dropped out of the top 10 rankings in the Douyin beauty market, with domestic brands like Han Shu and Proya leading the charge [4] - The medical beauty market is projected to reach 370 billion by 2025, attracting investments from beauty companies [4] - The soap market is witnessing a shift towards premium products, with handmade soaps gaining traction among consumers [6] - PDRN technology is being adopted in mainstream skincare, with various brands innovating in formulations and applications [6] - Domestic beauty brands are increasingly focusing on international markets, with Hong Kong serving as a strategic entry point [6] Top Brand News - The domestic fragrance brand "Song Dynasty Fragrance" is rapidly expanding, with a unique dual strategy for online and offline sales [12] - Influencer Zhu Guagua has regained prominence in the Douyin beauty market, significantly impacting brand sales through effective marketing strategies [12] - Hermès is exploring the skincare segment, with plans to launch products post-2028, indicating a strategic move to enhance its beauty portfolio [12] - Yatsen Group has released China's first beauty innovation white paper, showcasing advancements in research and sustainable development [12] - Juyi Group has acquired the Italian brand Foltène to strengthen its position in the hair care market, reflecting a trend of consolidation among domestic beauty companies [12]

Core Viewpoint - Yatsen Holding Limited, a leading beauty group based in China, is set to release its unaudited financial results for the third quarter of 2025 on November 17, 2025, before the U.S. market opens [1]. Group 1: Financial Results Announcement - The financial results will be discussed in a conference call scheduled for November 17, 2025, at 7:30 A.M. U.S. Eastern Standard Time [2]. - The conference call will be accessible via multiple dialing options for U.S., international, and mainland China listeners [2]. - A live and archived webcast of the conference call will be available on the company's investor relations website [2]. Group 2: Company Overview - Yatsen Holding Limited was founded in 2016 and has launched and acquired several color cosmetics and skincare brands, including Perfect Diary, Little Ondine, Pink Bear, Galénic, DR.WU, and Eve Lom [4]. - Perfect Diary is highlighted as one of the leading color cosmetics brands in China based on retail sales value [4]. - The company engages with customers through both online and offline channels, maintaining a strong presence across major e-commerce, social, and content platforms in China [4].

Core Insights - The launch of the "Yatsen Group Beauty Innovation White Paper" marks a significant milestone for China's beauty technology, positioning it among the global leaders in research and development [1][3][5] Group 1: White Paper Overview - The white paper is the first of its kind in China, systematically outlining Yatsen Group's achievements in global research layout, technological innovation, efficacy verification, and sustainable development [3][5] - It serves as a window to showcase the company's R&D strategy, technological achievements, and future directions, reflecting the potential for world-class beauty innovation to emerge from China [5][12] Group 2: Industry Context - The Chinese cosmetics industry is currently in a critical phase of innovation-driven development, with the white paper providing valuable insights and foresight into future trends [7][9] - The release of the white paper is seen as a vital contribution to the ongoing transformation of the Chinese cosmetics industry, injecting new wisdom and vitality [7][9] Group 3: Research and Development Achievements - Yatsen Group has established a comprehensive "end-to-end" innovation system, integrating research, formulation development, efficacy validation, and manufacturing [18][20] - The company has invested over 600 million yuan in R&D since its NYSE listing in 2020, maintaining a R&D expense ratio exceeding 3% for three consecutive years, placing it among the top tier in the global beauty industry [17][20] Group 4: Product Innovations - The launch of the DR.WU PDRN Water Light Essence showcases the application of advanced technologies, including AI molecular docking and a patented delivery system, enhancing the efficacy of active ingredients [14][16] - The white paper highlights multiple innovative achievements, including the introduction of the Biotec™ technology, which integrates Nobel Prize-winning science into beauty products [16][18] Group 5: Financial Performance - Yatsen Group reported a revenue of 1.09 billion yuan for Q2 2025, a year-on-year increase of 36.8%, with a gross profit margin of 78.3% [21] - The skincare segment has shown remarkable growth, contributing 53.5% to total revenue, indicating the effectiveness of the company's R&D-driven growth strategy [21]