Core Viewpoint - Yatsen Holding, the parent company of the cosmetics brand Perfect Diary, reported a significant revenue growth of 47% year-on-year for Q3 2025, marking a recovery after a prolonged decline since 2021 [1][4]. Revenue Performance - The company's Q3 2025 revenue reached 998 million yuan (approximately 140 million USD), up from 677 million yuan in the same period last year [1][4]. - This marks the fourth consecutive quarter of year-on-year revenue growth and the first increase in the first three quarters since 2021 [2]. Growth Drivers - The new growth engine for Yatsen is not its well-known cosmetics business but rather its skincare brands, including KOLANLI, EVE LOM, and DR. WU, which generated 490.8 million yuan (approximately 68.9 million USD) in revenue, an 83.2% increase year-on-year [2][6]. - Skincare brands accounted for 49.2% of total revenue, nearly half, while the cosmetics business saw a more modest growth of 25.2% [2]. Profitability and Losses - Yatsen's gross profit for Q3 2025 was 780.5 million yuan, with a gross margin improvement from 75.9% to 78.2% year-on-year [4]. - The net loss for Q3 2025 was 70.4 million yuan, a reduction of 41.9% compared to the previous year, indicating a narrowing of losses [7]. Strategic Shift - The company has been transitioning from a single cosmetics brand to a multi-category beauty group, focusing on high-end skincare products to enhance its product structure [9]. - Yatsen's investment in research and development reached 39.76 million yuan in Q3 2025, a 56.9% increase, reflecting a commitment to innovation [9]. Market Position and Future Outlook - Despite the ongoing challenges, Yatsen remains optimistic about future growth, projecting Q4 2025 revenue between 1.32 billion and 1.49 billion yuan, representing a year-on-year increase of approximately 15% to 30% [10].

Core Viewpoint - Yatsen Holding, the parent company of the cosmetics brand Perfect Diary, reported a significant revenue increase in Q3 2025, marking a turnaround after a prolonged decline, driven primarily by its skincare brands rather than its traditional makeup business [1][4]. Financial Performance - In Q3 2025, total net revenues reached 998.4 million RMB (approximately 140.2 million USD), a 47% increase from 677.0 million RMB in the same period last year [2][5]. - Gross profit for the same quarter was 780.5 million RMB, reflecting a 51.9% year-over-year increase, with gross margin improving from 75.9% to 78.2% [5]. - The company reported a net loss of 70.4 million RMB, a 41.9% reduction compared to the previous year, with a non-GAAP net loss of 51.5 million RMB, down 32.8% [9]. Business Transformation - Yatsen's new growth engine is its skincare brands, which generated 490.8 million RMB (approximately 68.9 million USD) in revenue, an 83.2% increase year-over-year, accounting for 49.2% of total net revenues [3][4]. - The company has shifted focus from its declining makeup business, which saw a 57.7% drop in revenue in 2022, to a diversified portfolio that includes skincare brands like Colorkey, EVE LOM, and DR. WU [7][8]. Market Positioning - The company aims to enhance its market position by transitioning from a budget-focused brand to a high-end skincare provider, with a clear strategy to increase the proportion of skincare products in its offerings [10][11]. - Colorkey, a high-end skincare brand, has shown strong market performance, indicating a successful shift in consumer purchasing trends towards premium products [11]. Future Outlook - Yatsen Holding remains optimistic about future growth, projecting Q4 2025 total net revenues between 1.32 billion and 1.49 billion RMB, representing a year-over-year increase of approximately 15% to 30% [13].