Yatsen Holding(YSG) - 2021 Q4 - Annual Report

Financial Performance - Total net revenues for Q3 2021 increased by 6.0% to RMB1.34 billion (US$208.4 million) from RMB1.27 billion in the prior year period[3] - Gross sales for Q3 2021 increased by 8.3% to RMB1.56 billion (US$241.9 million) from RMB1.44 billion in the prior year period[2] - Gross margin for Q3 2021 was 67.9%, up from 65.7% in the prior year period[3] - Net loss for Q3 2021 decreased by 43.8% to RMB361.8 million (US$56.1 million) from RMB643.8 million in the prior year period[9] - Total net revenues for the three months ended September 30, 2021, were RMB 1,342,604, representing an increase from RMB 1,266,225 for the same period in 2020[29] - Gross profit for the three months ended September 30, 2021, was RMB 911,847, compared to RMB 831,612 for the same period in 2020, indicating a growth of approximately 9.6%[29] - The company reported a net loss attributable to Yatsen's shareholders of RMB 360,279 for the three months ended September 30, 2021, compared to a net loss of RMB 643,822 for the same period in 2020, reflecting a reduction in losses[29] - For the three months ended September 30, 2021, the net loss was RMB (361,756) thousand, compared to a net loss of RMB (643,822) thousand for the same period in 2020, representing a 44% improvement[32] Operating Expenses - Operating expenses decreased by 13.2% to RMB1.28 billion (US$198.8 million) from RMB1.48 billion in the prior year period, representing 95.4% of total net revenues[5] - Total operating expenses decreased to RMB 1,281,161 for the three months ended September 30, 2021, from RMB 1,476,174 for the same period in 2020, a decline of approximately 13.2%[29] - Share-based compensation expenses decreased significantly from RMB 446,271 thousand in Q3 2020 to RMB 133,955 thousand in Q3 2021, a reduction of approximately 70%[32] Cash and Assets - Cash and cash equivalents as of September 30, 2021, were RMB3.63 billion (US$563.8 million), down from RMB5.73 billion as of December 31, 2020[10] - Cash and cash equivalents as of September 30, 2021, were RMB 3,633,013, down from RMB 5,727,029 as of December 31, 2020[25] - The company’s total assets as of September 30, 2021, were RMB 7,662,419, a decrease from RMB 8,307,738 as of December 31, 2020[25] - Current liabilities decreased to RMB 959,134 as of September 30, 2021, from RMB 1,130,677 as of December 31, 2020, indicating improved liquidity management[25] Future Outlook - The company expects total net revenues for Q4 2021 to be between RMB1.57 billion and RMB1.67 billion, representing a year-over-year decline of approximately 15% to 20%[12] - Forward-looking statements indicate that the company aims to continue rolling out popular products and respond to changes in consumer preferences and industry trends[23] Non-GAAP Measures - Non-GAAP net loss for Q3 2021 increased by 9.6% to RMB216.3 million (US$33.6 million) from RMB197.4 million in the prior year period[10] - Non-GAAP net loss attributable to ordinary shareholders was RMB (215,112) thousand for the three months ended September 30, 2021, compared to RMB (197,412) thousand for the same period in 2020, indicating a 9% increase in loss[32] - Non-GAAP net income (loss) per ordinary share (diluted) improved from (0.30) in Q3 2020 to (0.09) in Q3 2021, showing a 70% reduction in loss per share[32] - The company experienced a decrease in non-GAAP income (loss) from operations, with a loss of RMB (221,740) thousand in Q3 2021 compared to a loss of RMB (198,106) thousand in Q3 2020[32] Shareholder Actions - The board of directors approved a US$100 million share repurchase program to be executed over the next 24 months[13] Asset Valuation - The company is in the process of finalizing the valuation of assets acquired from the acquisition of Eve Lom, which may lead to adjustments in the financial statements[27] Accumulated Deficit - The company’s accumulated deficit increased to RMB (5,307,672) as of September 30, 2021, from RMB (4,240,134) as of December 31, 2020[26] Amortization and Tax Effects - The company reported an amortization of intangible assets resulting from acquisitions of RMB 13,619 thousand for the three months ended September 30, 2021, compared to RMB 185 thousand in the same period of 2020[32] - Tax effects on non-GAAP adjustments were RMB (2,137) thousand for Q3 2021, compared to RMB (46) thousand in Q3 2020, indicating a significant increase in tax adjustments[32] Preferred Shares - Accretion to preferred shares was reported at RMB 81,371 thousand for the three months ended September 30, 2021, with no corresponding figure for the same period in 2020[32] Share Count - The weighted average number of diluted shares increased from 656,397,624 in Q3 2020 to 2,526,453,776 in Q3 2021, reflecting a substantial increase in share count[32]