Chinese beauty e-commerce company Yatsen Holding Limited announced the pricing for its IPO on the NYSE. Yatsen will go public on Thursday, Nov. 19, and trade on the NYSE under the ticker symbol "YSG."
In a press release on Nov. 19, Yatsen announced that it intends to sell 58.75 million ADSs (American depositary shares). The total gross offering is expected to be equivalent to $616.9 million with a price of $10.50 per ADS.
Yatsen stock IPO
Yatsen opens to the public market on Nov. 19. The company said that its Chinese brand, Perfect Diary, is the number one online color cosmetics brand. It uses online marketing and over 200 “experience stores” to draw customers, according to TheStreet.
The primary beauty and skin care providers in competition with Yatsen in China are French company Loréal and American company Estée Lauder. Loréal’s Chinese sales in 2019 hit a 15-year high point and rose by 35 percent from 2018.
Yatsen's IPO pricing
The new IPO priced from $8.50 to $10.50 comes for Yatsen as China ranks second only to the U.S. in cosmetics sales. WPIC reported that China’s projected cosmetic sales will likely surpass $60 billion by 2024.
Yatsen reported an increase in its year-over-year revenue of 377 percent to $446.4 million for fiscal 2019. The company's net income for fiscal 2019 was $11.1 million. The revenue for the first nine months of 2020 was $481.9 million.
About 91 percent of Yatsen's gross sales for the first nine months of 2020 came from online channels including WeChat and Tmall, according to Bloomberg.
When is Yatsen's IPO date?
The IPO is expected to close on Nov. 23. There's also an option for underwriters to purchase up to an aggregate of 8.81 million additional ADSs, which must be exercised within 30 days of the final prospectus date.
The new IPO is going through even though U.S. authorities “continued threatening to force firms from the Asian nation off American exchanges,” as reported by Bloomberg. Chinese companies must comply with regulatory auditing rules or risk becoming delisted from U.S. stock exchanges.
The joint bookrunners for Yatsen’s offering are Morgan Stanley & Co. LLC, Goldman Sachs (Asia) LLC, and China International Capital Corporation Hong Kong Securities Limited, according to the press release. The co-managers are Tiger Brokers (NZ) Limited, China Renaissance Securities (Hong Kong) Limited, and Futu Inc.
Who owns Yatsen?
Yatsen Holding Limited is based in Guangzhou, China. It's under the leadership of founder, chairman, and CEO Jinfeng Huang. Yatsen was created in 2016 to develop consumer beauty brands that are marketed directly to consumers in China through both retail locations and online platforms.
Currently, the company's primary offerings include Perfect Diary, Little Ondie, Abby’s Choice, and Galenic. Galenic is a previously French brand that Yatsen acquired recently. The company intends to support the Galenic brand in Europe and launch it into China and other Asian markets.
Huang noted that Yatsen intends to acquire another skincare company in the near future, according to Bloomberg.