Yatsen Holding Limited announced a definitive agreement to issue approximately US$120 million of RMB‑denominated convertible senior notes. The notes will be issued in two equal tranches, the first expected in or around March 2026 and the second later in the year. The transaction carries a 1.5% annual coupon and a conversion price of US$4.63 per share, a 20% premium to the recent volume‑weighted average price. In addition, the deal includes warrants to purchase Class A ordinary shares at an exercise price of US$0.50 per share. The agreement was approved by Yatsen’s Board and audit committee, underscoring the company’s confidence in its long‑term growth strategy.
Yatsen plans to deploy the net proceeds across several growth initiatives: product research and development, global supply‑chain integration, overseas market expansion, and strategic mergers and acquisitions. The capital infusion is intended to accelerate the company’s expansion into new geographies and to strengthen its competitive position in the premium skincare segment.
The financing follows a strong turnaround in Yatsen’s recent financial performance. In Q4 2025, the company reported a 20.1% year‑over‑year increase in total revenue and a shift from a net loss to a net income, driven largely by a 51.9% rise in skincare‑segment revenue. Gross margin held steady at 77.7% in the quarter and improved to 78.2% for the full year, reflecting the higher margin contribution from premium skincare products. In contrast, color‑cosmetics revenue declined 9.1% year‑over‑year, highlighting a shift in the company’s product mix.
Jinfeng Huang, Founder, Chairman and CEO, said, “This investment underscores my unwavering confidence in Yatsen’s long‑term trajectory and our team’s firm commitment to executing our strategic roadmap. In the face of a dynamic market environment, we remain dedicated to building a resilient, multi‑brand beauty group. We are thrilled to welcome Trustar Capital’s world‑class resources and deep industry expertise.”
The market reaction to the announcement was muted, with no significant shift in investor sentiment reported. The transaction’s low coupon and premium conversion price are designed to minimize immediate dilution while providing the company with the liquidity needed to pursue its growth agenda.
Overall, the convertible notes and warrants represent a material capital‑raising event that strengthens Yatsen’s balance sheet, supports its expansion plans, and signals management’s confidence in the company’s long‑term strategy. The financing is expected to enhance Yatsen’s ability to invest in high‑margin skincare products and to accelerate its global footprint without imposing excessive dilution on existing shareholders.
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