Yatsen Holding Limited

Ladies and gentlemen, good day and welcome to the Yeltsin Fourth Quarter and Full Year 2020 Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Irene Liu of Strategic Investment and Capital Markets. Please go ahead.

Irene Liu Thank you, Operator. Please note that discussions today will contain forward-looking statements relating to the company's future performance, and are intended to qualify for the safe harbor from liability, as established by the U.S. Private Securities Litigation Reform Act. Such statements are not guarantees of the future performance and are subject to certain risks and uncertainties, assumptions, and other factors. Some of these risks are beyond the company's control and could cause actual results to differ materially from those mentioned in today's press release and this discussion. A general discussion of the risk factors that could affect Yasin's business and financial results is included in certain filings of the company with the Securities and Exchange Commission. The company does not undertake any obligation to update this forward looking information except as required by law. During today's call, management will also discuss certain non-GAAP financial measures for comparison purposes only. For a definition of non-GAAP financial measures and the reconciliation of GAAP to non-GAAP financial results, please see the earnings release issued earlier today. Joining us today on the call from Yasin's senior management are Mr. Xinfeng Huang, our founder, chairman, and CEO, and Mr. Donghao Yang, our CFO and director. Management will begin with prepared remarks, and the call will conclude with a Q&A session. As a reminder, this conference is being recorded. In addition, a webcast replay of this conference call will be available on Yasen's investor relations website at ir.yasenglobal.com. I will now turn the call over to Mr. Jintong Huang. Please go ahead.

Okay. Thank you, Irene. And thank you, everyone, for participating in Yasen's inaugural earnings conference call today. So 2020 was an exciting year for YesSend as we made great strides across our business and achieved numerous milestones. So one of the most significant highlights for the year was our successful listing on the New York Stock Exchange on November 19th last year. So marking the start of our new journey as a public company. So on behalf of Yasun's employees and myself, I would like to extend our sincerest gratitude and appreciation to all of your long-time and new shareholders who continue to support us. Today, for the first time as a public company, we are pleased to present you with our solid operating and financial performance for the fourth quarter and the full year of 2020. So throughout the year, we leveraged our past successes to further fortify our leading position in color cosmetics for Gen Z and millennial customers. So Yasheng's firm commitment to product innovation and development, enhancing brand portfolio and product offerings, and strengthening ties with customers through both online and offline channels, position us as a unique and competitive player in China's fast-growing beauty industry. So as a result, for the full year, we grew our total net revenues by 72.6% year-over-year to RMB 5.2 billion and increased our growth sales by 72.4% from RMB 3.5 billion in 2019 to RMB 6.1 billion in 2020. In an extension of the robust momentum we saw throughout the year, fourth quarter revenues total net revenue increased 71.7% year-over-year to RMB 2 billion, and growth sales climbed 73.3% year-over-year to RMB 2.3 billion. So our solid results are testament to our ability to quickly grow our business, as evidenced by the accelerated expansion of our flagship brand, Puppet Diary, and the rapid growth witnessed by our other brands, including Little Ondi and AB's Choice, soon after being introduced to our portfolio. The strength across our brand portfolio demonstrated our ability to incubate and scale brands and assured us that we are on the right track as we continue to press forward. These numbers also display the effectiveness of our disruptive D2C model, which enabled us to consistently deliver innovative products and personalized services that deepen customer engagement. So the growing popularity of homegrown Chinese beauty brands is creating a great opportunity for us as our brand targets Gen Z and millennials, the golden cohort of China's beauty industry. So our evolving product line is steadily gaining traction among young people consumers, and seen substantial growth. So in the fourth quarter, the number of B2C customers reached another record high of 14.4 million. And this number came in at 32.3 million for the full year. So this represents impressive year-over-year gains of 31% and 38%, respectively. So color cosmetics are the foundation of our business. and a prominent contributor to revenue. So having said that, we further widened our product variety and offerings during the fourth quarter with more emphasis on quality, innovation, and uniqueness. So we deepened our reach in the skincare segment with the acquisition of Galenic, an iconic premium French skincare brand from Pierre Fabre, and a massive Chinese skincare brand which is the leading medical skincare brand known for its highly effective products targeting various sensitivities in Asian skin. We also entered a strategic partnership with Sensant Technologies, a partnership that is enhancing our R&D capabilities for innovative colors and new materials for color cosmetics. So boosting quality control for raw materials, and amplifying the use of technology to solve recurring challenges in the color cosmetics industry. So leveraging our disruptive D2C model and core platform capabilities, we are working toward building a multi-brand portfolio that drives a broader product selection and addresses the needs of more customers. With this vision in mind, I would like to review some of our recent activities. and unpack upcoming initiatives for 2021 and beyond. So on the back of the success of our existing brands, we plan on introducing some more brands through self-incubation and acquisitions in target market segments where we see considerable room for growth. Our ideal portfolio will consist of diversified brands with varying market positioning, from mass market to high end, as we seek to attract a wide spectrum of consumers. We are also proactively pursuing strategic investments, acquisitions, and collaborations, both domestically and overseas. As announced earlier this month, we recently acquired the prestigious skincare brand Yves Long from Madonita Capital, So with the brand's multi-award-winning product range, our exceptional e-commerce capabilities, and a demonstrated track record of innovation, we are confident that we will further accelerate Yiblong's growth in the global market. So to close, before I hand it over to Dong Hao, China's beauty market has enormous potential waiting to be unleashed. So our customer-centric value proposition disruptive D2C business model, and strong R&D capabilities, uniquely positioning Yasen to play a leading role in the country's evolving beauty industry. So looking ahead, we remain committed to redefining the landscape of Chinese beauty, even as we engage and grow with the next generation of consumers to provide them with a new journey of beauty discovery. So thank you, everyone. With that, I will now turn the call over to our CFO, Donghao Yang, to discuss our financial performance.