Yatsen Holding(YSG)2024-03-06 22:10Financial Data and Key Metrics Changes - Total net revenues for Q4 2023 increased by 6.7% year-over-year to RMB 1.07 billion from RMB 1.01 billion [14] - Gross profit for Q4 2023 increased by 10.6% year-over-year to RMB 790.1 million, with gross margin improving to 73.7% from 71.1% [14][15] - Net loss for Q4 2023 was RMB 494.5 million, compared to RMB 55 million for the prior year period, resulting in a net loss margin of 46.1% [19] - For the full year 2023, total net revenues decreased by 7.9% to RMB 3.41 billion from RMB 3.71 billion [20] Business Line Data and Key Metrics Changes - Net revenues from Skincare brands for Q4 2023 grew by 17.6% year-over-year, while Color Cosmetics brands saw a slight decline of 1.8% [6][14] - The gross margin for Q4 2023 improved due to higher sales of premium products and disciplined pricing strategies [15] - R&D expenses as a percentage of revenues were 3.4% for Q4 2023, reflecting a commitment to enhancing research capabilities [12][18] Market Data and Key Metrics Changes - China's beauty market showed modest recovery in 2023, with total beauty retail sales up 1% year-over-year for Q4 [5] - Online beauty sales were mixed, with Tmall sales decreasing while Douyin sales increased year-over-year [5] Company Strategy and Development Direction - The company is focused on building strong brand equity through superior products and consumer satisfaction, alongside continued investments in brand building and R&D [6] - Perfect Diary's brand repositioning is gaining traction, with new product launches contributing significantly to revenue [10][25] Management Comments on Operating Environment and Future Outlook - Management noted a still soft retail environment but expressed optimism about returning to growth and pursuing sustainable growth through innovation [13] - The company expects total net revenues for Q1 2024 to be between RMB 765.4 million and RMB 803.7 million, indicating a year-over-year increase of approximately 0% to 5% [23] Other Important Information - The company recorded an impairment of goodwill of RMB 354 million in Q4 2023, primarily due to weaker operating results than expected at the time of acquisition [18] - The company had cash, restricted cash, and short-term investments of RMB 2.08 billion as of December 31, 2023, down from RMB 2.63 billion a year earlier [22] Q&A Session Summary Question: What is the target revenue contribution from new products for Perfect Diary this year? - Management indicated that new products contributed below 40% in Q4 2023, with expectations to rise above 50% this year [25] Question: How is the performance of brands during the Women's Day shopping festival? - Management noted that the performance is relatively steady, with more resources allocated for larger shopping festivals like 618 and Double 11 [26]