YSG's skincare sector up 33% YoY in Q3 2022
- Chaileedo Press
- Nov 23, 2022
- 2 min read
On November 22, YSG released its financial report for the third quarter of 2022. The skincare sector maintained a strong growth momentum, achieving revenue of 269 million yuan ($38 million), up 33% year on year, accounting for 31.4% of the total revenue.
（Credit：Website）
YSG had an initial public offering in NYSE at the end of 2020, to create a Chinese cosmetics brand to meet a huge and rapidly growing market. According to the market research data quoted in the YSGF-1 registration statement, China has become the largest cosmetics market in 2019, with a market size of $39 billion. It is estimated that by 2025, with the increase of per capita expenditure, purchase frequency, and adoption from low-end cities, the Chinese market will grow to nearly $70 billion.
The financial report showed that YSG's total net income in the third quarter was 857.9 million yuan ($120.6 million), down 36.1% year on year. This was mainly due to the 48.8% drop in the net income of the company's color cosmetics brand, and the 33.0% increase in the net income of the skincare brand, partially offsetting this decline.
（Credit：YSG financial report）
For the performance of the next quarter, YSG expects the total net income in the fourth quarter of this year to be between 916.7 million yuan ($128.1 million) and 1.07 billion yuan ($149.5 million), down about 30% to 40% year on year.
At the same time, YSG is continuously increasing R&D investment to enhance the company's development resilience. According to the data, YSG's R&D expenditure was about 33.9 million yuan ($4.7366 million) in Q3, and the proportion of revenue rose to 3.9% from 2.7% in the same period last year. By the end of the third quarter, YSG had invested more than 100 million yuan in R&D in 2022, the proportion of which ranked first among China's beauty groups and was the same as the average proportion of R&D investment in the global industry.
According to the analysis of insiders, due to the repeated impact of the epidemic in China, the beauty industry is still under pressure from the recovery of fluctuations, but the transformative effect of YSG in the third quarter is gradually emerging. Regarding the annual performance outlook, Huang Jinfeng, CEO of Yatsen, said, "In the future, we will continue to promote the sustainable development transformation of YSG and lay a solid foundation for the healthy development of the company in the medium and long term."
Source: YSG
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