Guangzhou-based Yatsen Holding Ltd (NYSE: YSG), the company behind fast-growing Chinese beauty brand Perfect Diary, on Thursday saw its shares surge by 75% to USD 18.40, marking a stellar performance on its first trading day at the New York Stock Exchange.
Founded in 2016 by three Sun Yat-sen University graduates, the current CEO Huang Jinhua, Chen Yuwen, and Lv Jianhua, Yatsen has launched three beauty brands—Perfect Diary, Little Ondine, and Abby’s Choice. It filed for a US IPO earlier this month and managed to raise USD 617 million by offering 58.75 million American depositary shares (ADS) at a listing price of USD 10.5. Goldman Sachs, Morgan Stanley, and CICC are the lead underwriters. Its main investors include Zhen Fund, Gaorong Capital, Hillhouse Capital, Tencent, and Yunfeng Capital.
Yatsen’s success is underpinned by a digitally native direct-to-consumer business model. The company sells most products via Tmall, as well as social and content platforms such as WeChat, Douyin, Kuaishou, Bilibili, and RED.
In 2019 and the first nine months of 2020, Yatsen served 23.4 million and 23.5 million customers, respectively, according to the company’s prospectus. Last year, its gross sales increased by 363.7% year-on-year (YoY) to RMB 3.5 billion. Total revenues reached RMB 3.03 billion (USD 446.4 million) in 2019 and RMB 1.89 billion in the first nine months of this year. It generated a net income of RMB 75.4 million (USD 11.1 million) in 2019, compared to a net loss of RMB 40.1 million in 2018.
Meanwhile, the company is also expanding its offline footprint, engaging with customers and allowing them to sample products. Yatsen has built over 200 “experience stores” across over 90 cities in China, an increase from 40 stores at the end of 2019, the company said.