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C-Beauty Unicorn and Perfect Diary Parent Yatsen Files For U.S. IPO

LONDON — Guangzhou Yatsen E-Commerce Co., the parent company of cosmetics and skincare brands Perfect Diary, Little Ondine, and Abby’s Choice filed on Friday with the U.S. Securities and Exchange Commission in a U.S. initial public offering.

No pricing terms were disclosed. Renaissance Capital said Yatsen will raise up to $100 million, making it the first Chinese beauty company to be ever listed on the New York Stock Exchange, under the symbol YSG.

According to the prospectus, it achieved a net income of 3.031 billion renminbi in 2019, up 377.1 percent year-on-year from 635 million renminbi in 2018, and net income of 3.272 renminbi billion in the first three quarters of 2020, up 73.20 percent year-on-year from 1.889 billion renminbi in the first three quarters of 2019.

However, due to the pandemic and the company’s increased investment in promotion, product research and development, and offline channels expansion, the company recorded an adjusted net loss of 500 million renminbi in the first three quarters of 2020.

In 2018, 2019, and the first three quarters of 2020, its gross profit margin was 63.5 percent, 63.6 percent, and 63.1 percent respectively.

For the nine months ended September 30, the Guangzhou-based company said it had served 23.5 million direct-to-consumer customers.

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The prospectus said “the company sees a beauty market full of huge potential to go and create a disruptive beauty brand, re-imagined from scratch, working deeply with market players such as sales channels, marketing agencies and supply chains in a more inclusive and unique way to deliver exceptional experiences and engaging journeys of beauty discovery to young consumers…The company believes that with the capabilities of its platform, it can achieve sustainable growth and capture a growing market share in China’s beauty industry.”

Money raised from IPO will be used in marketing and daily operations of the company, potential strategic investments and acquisitions, product development and technology development, and physical retail expansion beyond China, Yatsen said.

The company also said its user-centric, data-driven product development model has helped the company to introduce around 1,500 new SKUs in the eye makeup, lip makeup, foundation, makeup tools, gift box, and skincare categories in 2019 and the first three quarters of 2020.

In addition, a series of co-branded products with Discovery Channel, the Metropolitan Museum of Art, the British Museum, National Geographic China, Tom and Jerry’s have helped Perfect Diary attracted the attention of young Chinese consumers.

As of September 30, Yatsen said it had worked with nearly 15,000 KOLs, of which more than 800 of them have more than one million followers.

Its founders David Huang, Yuwen Chen, and Jianhua Lv started the cosmetic company in 2016, naming it after their alma mater which commemorates China’s first president Sun Yat-sen. It plans to increase the number of Perfect Diary stores to more than 600 by 2022, up from 200 in September 2020.

The company on Friday also announced it had acquired the premium French skin-care brand Galénic from Pierre Fabre.

Prior to that, its leading brand Perfect Diary tapped Chinese actress Zhou Xun as its global brand ambassador, and Australian singer Troye Sivan as a brand ambassador.

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