Core Viewpoint - Yatsen Holding Limited (逸仙电商) has returned to a growth trajectory, with significant improvements in revenue and a reduction in net losses, driven by a strategic shift towards skincare products [2][6]. Financial Performance - For the first half of 2025, Yatsen reported revenue of 1.92 billion yuan (approximately 268 million USD), a year-on-year increase of 22.4% [2][6]. - The net loss for the same period was 22.97 million yuan, a substantial decrease from a net loss of 203 million yuan in the previous year [2][6]. - In Q2 2025, revenue reached 1.09 billion yuan (approximately 152 million USD), reflecting a 36.8% year-on-year growth [6]. - Skincare brand revenue in Q2 2025 was 581.3 million yuan, marking a 78.7% increase, and accounted for 53.5% of total net revenue, up from 40.9% in the previous year [6]. Strategic Initiatives - The company has initiated a "second entrepreneurship" strategy since late 2021, focusing on skincare to diversify its revenue streams [6]. - Yatsen has made acquisitions of high-end brands such as Galénic, DR.WU, and Eve Lom to build a dual-driver model of color cosmetics and skincare [6]. - The company has emphasized R&D investment, with Q2 2025 R&D expenses reaching 36.12 million yuan, representing 3.3% of total revenue, maintaining over 3% for three consecutive years [6]. Future Outlook - The company anticipates total revenue for Q3 2025 to be between 780 million and 880 million yuan, projecting a year-on-year growth of approximately 15% to 30% [7].

Core Insights - The company reported a revenue increase to 830 million yuan in Q1 2025, representing a year-on-year growth of 7.8%, continuing its growth trend [2] - The skincare segment, including brands Galénic, DR.WU, and EVELOM, saw a net income increase of 58%, contributing to a 47.7% growth in skincare revenue, totaling 360 million yuan [2] - The skincare segment accounted for 43.5% of total revenue, maintaining over 30% for 12 consecutive quarters [2] - Gross profit increased by 9.7% year-on-year, with a gross margin rising to 79.1%, marking a historical high for the quarter [2] - The company achieved a Non-GAAP net profit of 7.14 million yuan, marking two consecutive quarters of positive revenue growth and profitability [2] - The company emphasizes R&D as a core strategy for future growth, with Q1 2025 R&D investment nearing 22.64 million yuan, and a cumulative investment of over 580 million yuan since 2020 [2] Market Analysis - Analysts view the Q1 performance as a strong start, with strategic transformation yielding results, laying a solid foundation for stable growth throughout the year [3] - The company projects Q2 2025 total revenue between 810 million and 890 million yuan, indicating a year-on-year growth of approximately 2% to 12% [3] - The board has approved a new stock repurchase plan, allowing for the buyback of up to 30 million USD in common stock over the next 24 months, reflecting management's confidence in the company's long-term prospects [3]