Yatsen Holding Limited American Depositary Shares, each representing twenty (20) Class A Ordinary Shares (YSG)

On our desk, the valuation multiples look intriguing with a price-to-sales ratio around 0.50, but we are treading carefully given the wider net loss of RMB61.9 million reported in Q1 2026. While the Skincare segment is expanding rapidly at 58.5% and boosting gross margins past 80%, the concurrent 32.5% surge in operating expenses due to aggressive RandD and marketing means profitability remains elusive in the near term.

Looking at the liquidity profile, cash, restricted cash, and short-term investments have declined to RMB934.2 million alongside an operating cash outflow of RMB90.0 million. This puts immense importance on the completion of their ~$120 million private placement of convertible notes and warrants with Hillhouse and Trustar Capital. Investors need to watch how efficiently this capital is deployed against rising cash burn.

When evaluating their technical structure or preparing research models, remember that one American Depositary Share (ADS) represents twenty (20) Class A Ordinary Shares for YSG. With the recent Annual General Meeting voting deadline and ongoing private placement tranches closing, tracking share dilution mechanisms is critical for accurate per-ADS calculations and valuation forecasting.