Core Insights - The beauty industry is entering a new life cycle characterized by a general decline, making growth a rare capability [3][4] - Understanding the new cycle's operational logic is essential for finding growth paths amidst industry fluctuations [4][5] Industry Trends - The 2025 China Cosmetics Annual Conference highlighted the industry's transformation and invited over 300 speakers to share insights on growth [4][5] - The event attracted over 2,000 attendees and 20,000 online viewers, indicating a strong desire for answers regarding growth in an uncertain environment [5] Company Strategies - UpBeauty's CEO emphasized sustainable growth based on quality scale, activated organizational mechanisms, and clear strategic layouts, targeting over 10 billion yuan in sales by 2025 [16][17] - Yatsen's CEO shared a threefold growth strategy focusing on global R&D systems, multi-brand operations, and resilient learning organizations, achieving positive growth for four consecutive quarters [19][20] - Shanghai Jahwa's strategy includes focusing on core brands, brand building, online presence, and efficiency, resulting in double-digit growth in the first half of the year [21][24] - Pechoin's CEO highlighted the importance of entering the medical beauty sector to overcome growth challenges, leveraging a comprehensive ecosystem for product offerings [25][27] - Weibo Haitai's founder discussed the necessity of adapting to change as a core driver for industry development, predicting a shift from ingredient promotion to effect-based payment models [30][34] Future Outlook - The industry is expected to see significant growth in aerosol cosmetics, with projections of 900 million units by 2030 [51][56] - The trend towards precision skincare driven by scientific methodologies is anticipated to reshape the market landscape [61][63] - The integration of AI in the beauty industry is expected to enhance innovation and efficiency, with many companies investing in AI technologies [65][67] Market Opportunities - The potential for Chinese brands to expand internationally is significant, with a focus on localizing products and establishing a strong brand presence abroad [40][45] - The emphasis on emotional and experiential aspects of consumer engagement is becoming increasingly important for brand differentiation and growth [81][82]

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].

Core Viewpoint - Yatsen E-commerce, the parent company of the cosmetics brand Perfect Diary, reported a significant narrowing of net losses in its financial results for the first half and second quarter of 2025, indicating potential for profitable growth despite ongoing challenges in the beauty industry [1][3]. Financial Performance - In the first half of 2025, Yatsen E-commerce achieved revenue of 1.92 billion yuan, a 22.4% increase from 1.568 billion yuan in the same period of 2024 [1]. - The net loss for the first half of 2025 was 25.08 million yuan, compared to a net loss of 210 million yuan in the same period of 2024 [1]. - For the second quarter of 2025, revenue reached 1.09 billion yuan, up 36.8% from 795 million yuan in the second quarter of 2024 [1]. - The net loss for the second quarter of 2025 was 19.5 million yuan, a significant improvement from a net loss of 85.5 million yuan in the same quarter of 2024 [1]. Business Challenges - The beauty industry is experiencing a slowdown, and Yatsen E-commerce has faced development bottlenecks since its peak performance in 2019, when revenue was 3.031 billion yuan, growing 377% year-on-year [3][4]. - The company's revenue has been on a downward trend since 2022, with figures of 3.706 billion yuan, 3.415 billion yuan, and 3.393 billion yuan for 2022, 2023, and 2024 respectively, reflecting year-on-year declines of -36.5%, -7.9%, and -0.6% [3][4]. Strategic Shifts - Yatsen E-commerce is undergoing a transformation, focusing on "self-sustaining" strategies and launching a "second entrepreneurship" initiative to adapt to external uncertainties [4]. - The skincare segment, which includes brands like "完子心选" and acquisitions of KORRES, EVE LOM, and DR. WU, has shown rapid growth, with skincare revenue increasing by 78.7% to 580 million yuan in the second quarter of 2025, accounting for 53.5% of total revenue [4][5]. Marketing and Brand Image - The company's heavy reliance on marketing has led to increased costs, with marketing expenses rising from 309 million yuan in 2018 to 3.412 billion yuan in 2020, a growth of over 1004% [6][7]. - Despite high marketing expenditures, consumer fatigue with advertising has diminished the effectiveness of these strategies, leading to a decline in brand reputation and increased complaints regarding product quality and customer service [9][10]. - The stock price of Yatsen E-commerce has significantly dropped, losing 63.7% from its peak, reflecting declining investor confidence due to prolonged losses [7][8].

Core Viewpoint - Yatsen Holding Limited (YSG) shows positive financial performance with a notable increase in revenue and net profit, indicating growth potential in the beauty market [1][2]. Financial Performance - As of March 31, 2025, Yatsen's total revenue reached 834 million RMB, reflecting a year-on-year growth of 7.78% [1]. - The company's net profit attributable to shareholders was -5.303 million RMB, which represents a significant year-on-year increase of 95.74% [1]. Upcoming Events - Yatsen is scheduled to disclose its interim report for the fiscal year 2025 on August 19, with the actual date subject to company announcement [2]. Company Overview - Yatsen Holding Limited is a Cayman Islands-registered holding company, primarily operating through its subsidiary Guangzhou Yatsen E-commerce Co., Ltd [2]. - Founded in 2016, the company is a leading player in the Chinese beauty market, offering a range of brands including Perfect Diary, Little Ondine, and DR.WU [2]. - The company engages customers through both online and offline channels, with a strong presence on major e-commerce, social, and content platforms in China [2].