Hillhouse-backed Chinese cosmetics firm Yatsen files for $100m US IPO

Snow falls in front of the New York Stock Exchange (NYSE) in New York, U.S., on Wednesday, Jan. 30, 2019. Photographer: Michael Nagle/Bloomberg

Yatsen Holding, a Chinese cosmetics company backed by private equity investor Hillhouse Capital and venture capital firms ZhenFund and Banyan Partners, has filed to raise $100 million in an initial public offering (IPO) in the US.

The filing was heavily redacted and the amount specified is likely a placeholder figure. The firm, which seeks to list on the New York Stock Exchange, has hired Goldman Sachs, Morgan Stanley, CICC, and Tiger Brokers as underwriters.

Founded in 2016, Yatsen owns three color cosmetics and skincare brands – Perfect Diary, Little Ondine, and Abby’s Choice. The company said these three brands together served 23.4 million customers in 2019 and 23.5 million in the first nine months this year.

The firm had over 200 experience stores across 90 cities in China as of September 30, 2020, an increase from 40 stores at the end of 2019, according to its prospectus.

However, Yatsen reported net loss of 1.16 billion yuan ($170.4 million) on $481 million in revenue for the nine months ended September 30, 2020. In the same period last year, the company reported net income of 29.1 million yuan ($4.3 million).

Yatsen said it will use the proceeds from its listing to finance business operations and potential strategic investments and acquisitions. It also aims to develop data analytics technology and expand its offline experience store network expansion.

PE firm Hillhouse Capital owns 13.8 per cent pre-IPO stake in Yatsen while VC firms ZhenFund and Banyan Partners hold 10.5 per cent and 9.2 per cent stakes, respectively.

Yatsen seeks to capture an increasing share of China’s massive beauty industry. According to a CIC Report cited by the company, the market generated $38.8 billion in retail sales last year.

The report added that China’s beauty market is expected to grow by $29.9 billion between 2019 and 2025, accounting for nearly 60 per cent of the total growth of the global beauty market during the same period.

This rapid growth is driven by increased per capita spending, growing consumer demand for beauty products, expanded product selection, increased purchasing frequency, and increased purchasing by consumers from lower-tier cities, the report added.

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.