Yatsen Completes First Tranche of Convertible Notes Financing
Written by Emily J. Thompson, Senior Investment Analyst
Updated: May 21 2026
0mins
Source: Newsfilter
- Expanded Investor Participation: Yatsen announced Hillhouse's involvement in its RMB-denominated private placement of convertible notes and warrants, with the first tranche closing on May 21, 2026, demonstrating investor confidence and support for the company.
- Stable Financing Amount: The total aggregate principal amount for the two equal tranches of notes remains at approximately $120 million, with proceeds intended for product research and development, global supply chain integration, and overseas market expansion, enhancing the company's competitive position.
- Strategic Investor Confidence: Hillhouse, a significant shareholder since 2018, reflects strong trust in Yatsen's long-term value and strategic direction through its participation in this financing, aiding the company in executing its growth strategy.
- Future Financing Plans: The second tranche of notes is expected to be issued later this year, allowing Yatsen to continue leveraging the proceeds to drive strategic initiatives and create long-term value for shareholders.
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Analyst Views on YSG
About YSG
Yatsen Holding Ltd is a holding company primarily engaged in the development, manufacturing and sales of beauty products. The Company operates three segments. The Color Cosmetics Brands segment is primarily engaged in the provision of color cosmetics including lip, eye and face products through the brands such as Perfect Diary, Little Ondine and Pink Bear. The Skincare Brands segment is primarily engaged in the provision of skincare products including face serums, face creams, makeup removers, masks, toners, eye creams and cleansers through the brands such as Galenic, DR.WU, Eve Lom and EANTiM. The Others segment is primarily engaged in the provision of products such as beauty tools and kits, sun screen and beauty devices.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Yatsen Partners with Sephora China to Launch Perfect Diary Brand
- Brand Expansion Partnership: Yatsen has partnered with Sephora China to launch its Perfect Diary brand across approximately 300 stores, marking a significant penetration into the Chinese market that is expected to enhance brand visibility and sales.
- Product Portfolio Strength: The Perfect Diary product lineup, backed by scientific research, encompasses various skincare and cosmetic categories aimed at meeting the high-quality demands of Chinese consumers, thereby strengthening its competitive position in the market.
- R&D Investment Background: Since 2020, Yatsen has invested around $100 million in research and development, establishing research centers in China and Europe to support product innovation, which will provide ongoing technical support and product updates for the brand.
- Market Outlook: By collaborating with Sephora, Yatsen can leverage its extensive retail network and brand influence to further expand its market share in China, which is anticipated to drive future sales growth.
See More
Yatsen Partners with Sephora to Launch Perfect Diary
- Milestone Collaboration: Yatsen Group has partnered with global prestige beauty retailer Sephora to introduce its flagship brand Perfect Diary to the Chinese market, marking a significant advancement in Yatsen's evolution as a global beauty technology leader.
- Product Debut: Perfect Diary's science-backed skincare products will make their debut in Sephora's 300 stores, including major cities like Beijing, Shanghai, Guangzhou, and Shenzhen, reflecting the increasing consumer emphasis on efficacy and technological innovation in the Chinese beauty market.
- R&D Investment Commitment: Since 2020, Yatsen has invested approximately $100 million (RMB 700 million) in R&D, establishing a robust global innovation ecosystem that drives the market entry of Perfect Diary's biotechnology products, enhancing brand competitiveness.
- Foundation for Internationalization: This collaboration lays the groundwork for Yatsen's accelerating internationalization strategy, with future plans to expand Perfect Diary's presence in Hong Kong and other global markets, showcasing China's rise as a hub for global beauty innovation.
See More
Yatsen Partners with Sephora to Launch Perfect Diary
- Strategic Partnership Milestone: Yatsen Group's collaboration with global beauty retailer Sephora to introduce its flagship brand Perfect Diary in China marks a significant advancement in Yatsen's evolution as a global beauty technology leader, expected to enhance brand visibility and market share.
- Product Innovation Highlights: The Perfect Diary Biolip Essence Lipstick 3.0 and Translucent Blurring Setting Powder utilize exclusive patented technology that merges biotechnology with beauty, enhancing product performance and meeting consumer demands for efficacy and technological excellence, thereby strengthening Yatsen's competitive position.
- Market Expansion Plans: This partnership will see Perfect Diary debut in Sephora's 300 stores, including Tier 1 cities like Beijing, Shanghai, Guangzhou, and Shenzhen, reflecting a broader trend in the Chinese beauty market that prioritizes proven efficacy, aiding Yatsen's domestic and international expansion.
- R&D Investment Commitment: Since 2020, Yatsen has invested approximately $100 million in R&D to establish a robust global innovation ecosystem, with plans to further expand Perfect Diary into Hong Kong and other international markets, showcasing China's emergence as a premier hub for global beauty innovation.
See More
Yatsen Reports 22.5% Revenue Growth in Q1 2026
- Significant Revenue Growth: Yatsen Holding Ltd reported a 22.5% year-over-year increase in total net revenues for Q1 2026, reaching RMB1.02 billion, primarily driven by a 58.5% surge in skincare brand revenues, indicating strong performance in the rapidly growing skincare market.
- Gross Margin Improvement: The gross margin improved to 80.2%, up from 79.1% in the previous year, reflecting successful cost control and pricing strategies that enhance the company's competitive position in the industry.
- Rising Operating Expenses: Total operating expenses increased by 32.5% year-over-year to RMB918.1 million, accounting for 89.9% of total net revenues, which pressures profitability and resulted in a net loss of RMB61.9 million, highlighting the need for optimization in high-investment market strategies.
- Deteriorating Cash Flow: As of March 31, 2026, the company's cash, restricted cash, and short-term investments decreased to RMB934.2 million from RMB1.05 billion at the end of the previous year, with net cash used in operating activities reaching RMB90 million, reflecting financial strain in operational activities.
See More
Yatsen Reports Q1 2026 Financial Results with Strong Skincare Growth
- Significant Revenue Growth: In Q1 2026, Yatsen's total net revenues increased by 22.5% year-over-year to RMB 1.02 billion (approximately USD 148 million), primarily driven by a 58.5% year-over-year rise in skincare brand revenues, demonstrating the resilience of its multi-brand strategy.
- Gross Margin Improvement: The gross profit for Q1 reached RMB 819.2 million (approximately USD 118.8 million), with a gross margin of 80.2%, up from 79.1% in the prior year, reflecting the structural health of the company's business model.
- Rising Operating Expenses: Total operating expenses rose by 32.5% year-over-year to RMB 918.1 million (approximately USD 133.1 million), accounting for 89.9% of total net revenues; however, the company remains committed to long-term profitability optimization to ensure that revenue growth translates effectively into future margin improvements.
- Optimistic Outlook: Yatsen expects total net revenues for Q2 2026 to be between RMB 1.20 billion and RMB 1.30 billion, representing a year-over-year increase of approximately 10% to 20%, indicating a positive outlook based on current market and operational conditions.
See More
Yatsen Holding Reports Q1 Earnings Highlights
- Financial Performance: Yatsen Holding reported a non-GAAP EPS of -$0.09 for Q1, despite a 22.5% year-over-year revenue increase to $148 million, indicating resilience and growth potential in the market.
- Gross Margin Improvement: The gross margin for Q1 2026 rose to 80.2% from 79.1% in the prior year, reflecting significant progress in cost control and pricing strategies, thereby enhancing profitability.
- Cash Flow Status: As of March 31, 2026, the company had cash and short-term investments totaling RMB 934.2 million (approximately $135.4 million), down from RMB 1.05 billion as of December 31, 2025, highlighting pressure on operating cash flow.
- Future Outlook: The company expects total net revenues for Q2 2026 to range between RMB 1.20 billion and RMB 1.30 billion, representing a year-over-year increase of approximately 10% to 20%, suggesting management's optimistic view on future growth, which may attract more investor interest.
See More
Yatsen Partners with Sephora China to Launch Perfect Diary Brand
- Brand Expansion Partnership: Yatsen has partnered with Sephora China to launch its Perfect Diary brand across approximately 300 stores, marking a significant penetration into the Chinese market that is expected to enhance brand visibility and sales.
- Product Portfolio Strength: The Perfect Diary product lineup, backed by scientific research, encompasses various skincare and cosmetic categories aimed at meeting the high-quality demands of Chinese consumers, thereby strengthening its competitive position in the market.
- R&D Investment Background: Since 2020, Yatsen has invested around $100 million in research and development, establishing research centers in China and Europe to support product innovation, which will provide ongoing technical support and product updates for the brand.
- Market Outlook: By collaborating with Sephora, Yatsen can leverage its extensive retail network and brand influence to further expand its market share in China, which is anticipated to drive future sales growth.
See More
Yatsen Partners with Sephora to Launch Perfect Diary
- Milestone Collaboration: Yatsen Group has partnered with global prestige beauty retailer Sephora to introduce its flagship brand Perfect Diary to the Chinese market, marking a significant advancement in Yatsen's evolution as a global beauty technology leader.
- Product Debut: Perfect Diary's science-backed skincare products will make their debut in Sephora's 300 stores, including major cities like Beijing, Shanghai, Guangzhou, and Shenzhen, reflecting the increasing consumer emphasis on efficacy and technological innovation in the Chinese beauty market.
- R&D Investment Commitment: Since 2020, Yatsen has invested approximately $100 million (RMB 700 million) in R&D, establishing a robust global innovation ecosystem that drives the market entry of Perfect Diary's biotechnology products, enhancing brand competitiveness.
- Foundation for Internationalization: This collaboration lays the groundwork for Yatsen's accelerating internationalization strategy, with future plans to expand Perfect Diary's presence in Hong Kong and other global markets, showcasing China's rise as a hub for global beauty innovation.
See More
Yatsen Partners with Sephora to Launch Perfect Diary
- Strategic Partnership Milestone: Yatsen Group's collaboration with global beauty retailer Sephora to introduce its flagship brand Perfect Diary in China marks a significant advancement in Yatsen's evolution as a global beauty technology leader, expected to enhance brand visibility and market share.
- Product Innovation Highlights: The Perfect Diary Biolip Essence Lipstick 3.0 and Translucent Blurring Setting Powder utilize exclusive patented technology that merges biotechnology with beauty, enhancing product performance and meeting consumer demands for efficacy and technological excellence, thereby strengthening Yatsen's competitive position.
- Market Expansion Plans: This partnership will see Perfect Diary debut in Sephora's 300 stores, including Tier 1 cities like Beijing, Shanghai, Guangzhou, and Shenzhen, reflecting a broader trend in the Chinese beauty market that prioritizes proven efficacy, aiding Yatsen's domestic and international expansion.
- R&D Investment Commitment: Since 2020, Yatsen has invested approximately $100 million in R&D to establish a robust global innovation ecosystem, with plans to further expand Perfect Diary into Hong Kong and other international markets, showcasing China's emergence as a premier hub for global beauty innovation.
See More
Yatsen Reports 22.5% Revenue Growth in Q1 2026
- Significant Revenue Growth: Yatsen Holding Ltd reported a 22.5% year-over-year increase in total net revenues for Q1 2026, reaching RMB1.02 billion, primarily driven by a 58.5% surge in skincare brand revenues, indicating strong performance in the rapidly growing skincare market.
- Gross Margin Improvement: The gross margin improved to 80.2%, up from 79.1% in the previous year, reflecting successful cost control and pricing strategies that enhance the company's competitive position in the industry.
- Rising Operating Expenses: Total operating expenses increased by 32.5% year-over-year to RMB918.1 million, accounting for 89.9% of total net revenues, which pressures profitability and resulted in a net loss of RMB61.9 million, highlighting the need for optimization in high-investment market strategies.
- Deteriorating Cash Flow: As of March 31, 2026, the company's cash, restricted cash, and short-term investments decreased to RMB934.2 million from RMB1.05 billion at the end of the previous year, with net cash used in operating activities reaching RMB90 million, reflecting financial strain in operational activities.
See More
Yatsen Reports Q1 2026 Financial Results with Strong Skincare Growth
- Significant Revenue Growth: In Q1 2026, Yatsen's total net revenues increased by 22.5% year-over-year to RMB 1.02 billion (approximately USD 148 million), primarily driven by a 58.5% year-over-year rise in skincare brand revenues, demonstrating the resilience of its multi-brand strategy.
- Gross Margin Improvement: The gross profit for Q1 reached RMB 819.2 million (approximately USD 118.8 million), with a gross margin of 80.2%, up from 79.1% in the prior year, reflecting the structural health of the company's business model.
- Rising Operating Expenses: Total operating expenses rose by 32.5% year-over-year to RMB 918.1 million (approximately USD 133.1 million), accounting for 89.9% of total net revenues; however, the company remains committed to long-term profitability optimization to ensure that revenue growth translates effectively into future margin improvements.
- Optimistic Outlook: Yatsen expects total net revenues for Q2 2026 to be between RMB 1.20 billion and RMB 1.30 billion, representing a year-over-year increase of approximately 10% to 20%, indicating a positive outlook based on current market and operational conditions.
See More
Yatsen Holding Reports Q1 Earnings Highlights
- Financial Performance: Yatsen Holding reported a non-GAAP EPS of -$0.09 for Q1, despite a 22.5% year-over-year revenue increase to $148 million, indicating resilience and growth potential in the market.
- Gross Margin Improvement: The gross margin for Q1 2026 rose to 80.2% from 79.1% in the prior year, reflecting significant progress in cost control and pricing strategies, thereby enhancing profitability.
- Cash Flow Status: As of March 31, 2026, the company had cash and short-term investments totaling RMB 934.2 million (approximately $135.4 million), down from RMB 1.05 billion as of December 31, 2025, highlighting pressure on operating cash flow.
- Future Outlook: The company expects total net revenues for Q2 2026 to range between RMB 1.20 billion and RMB 1.30 billion, representing a year-over-year increase of approximately 10% to 20%, suggesting management's optimistic view on future growth, which may attract more investor interest.
See More
