Yasten Holding, the parent company of popular Chinese makeup brand Perfect Diary, went public Thursday on the New York Stock Exchange (NYSE), becoming the first Chinese beauty group listed on the U.S. stock market, and shares surged 75% on the first day of its listing.
On Oct. 31, Yasten submitted its prospectus to the U.S. Securities and Exchange Commission (SEC), raising $617 million. Then on Nov. 14, it updated the prospectus to set the IPO price between $8.5 per share to $10.5 per share with about 58.75 million American Depositary Shares (ADS.)
The company opened at $17.51 on Nov. 20, the first day of listing, increasing nearly 67% more than the high end of the IPO price of $10.5.
Morgan Stanley & Co. LLC, Goldman Sachs (Asia) L.L.C., and China International Capital Corporation Hong Kong Securities Limited serve as the joint bookrunners for the cosmetic firm’s offering, while Tiger Brokers (NZ) Limited, China Renaissance Securities (Hong Kong) Limited and Futu Inc. act as co-managers of the deal.
Hillhouse Capital Advisors, Ltd., which had participated in the A+ round of financing of Yasten back in May 2018, currently holds 13.8% of Yasten’s shares.
According to the prospectus, the company’s net income in 2019 was about 3 billion yuan, representing a significant year-on-year increase of 377.1% from the 635 million yuan in 2018. The net income in the first three quarters of 2020 reached about 3.27 billion yuan, marking a rise of 73.2% compared to the same period last year and revealing robust growth.
As a Guangzhou-based company that owns three popular domestic makeup and skincare lineups including Perfect Diary, Little Ondine, and Abby’s Choice, the company invested 48.7% and 41.3% in 2018 and 2019 respectively in marketing.
Under the impact of the Covid-19 pandemic, the company in the first three quarters of 2020 even used as much as 62.2% of its cost in marketing, especially focusing on online promotions and advertisements.
However, the company only invested 0.4% and 0.8% of its cost in product research and development respectively in 2018 and 2019.
Yasten deployed its e-commerce business on platforms such as Tmall and Xiaohongshu, achieving 500 million yuan in sales in the first 31 minutes of this year’s Double 11 shopping festival. The company is also exploring offline stores, having opened up 200 stores across the country as of this September.