Yatsen Announces Private Placement of Convertible Notes and Warrants

Rhea-AI Summary

Yatsen (NYSE: YSG) agreed to a private placement of RMB-denominated convertible senior notes and warrants totaling about US$120 million in two equal tranches, with participation by Trustar Capital and founder Jinfeng Huang. The First Note targets issuance in or around March 2026; the Second Note later in 2026.

The Notes bear 1.5% annual interest, convert after 364 days at a $4.63 conversion price (20% premium), and include Warrants equal to one-tenth of shares issuable on conversion. Proceeds will fund R&D, supply chain integration, overseas expansion and M&A.

Positive

• Raised approximately $120 million in convertible financing
• Founder Jinfeng Huang co-invested, signaling insider confidence
• Conversion price set at a 20% premium to recent VWAP
• Warrants structured at 1/10 of converted shares per Note

Negative

• Potential shareholder dilution from conversion and warrant exercise
• Repurchase feature may require cash outflow on third anniversary
• Extension to five-year maturity depends on obtaining an NDRC Certificate

Key Figures

Convertible notes size: US$120 million Interest rate: 1.5% per annum Initial maturity: 364 days +5 more

8 metrics

Convertible notes size US$120 million Aggregate principal amount of RMB-denominated convertible senior notes in two tranches

Interest rate 1.5% per annum Coupon on the convertible senior notes, payable semi-annually

Initial maturity 364 days Initial term of the First Note before automatic extension upon NDRC Certificate

Extended maturity 5 years Final maturity for Notes after receipt of NDRC Certificate

Conversion price $4.63 Conversion price for Class A shares/ADSs, 20% above recent VWAP

Conversion premium 20% Premium over 5-day volume weighted average ADS price before agreement date

Warrant coverage 10% of converted shares Warrants equal to one-tenth of Class A shares from each Note conversion

Warrant exercise price US$0.50 per share / US$10.00 per ADS Cashless Warrants exercisable into Class A shares or ADS equivalent

Market Reality Check

Price: $4.22 Vol: Volume 89,543 is slightly...

normal vol

$4.22 Last Close

Volume Volume 89,543 is slightly below 20-day average 95,480 (relative volume 0.94x). normal

Technical Price 3.82 is trading below 200-day MA at 7.04, well under longer-term trend.

Peers on Argus

YSG was down 2.8% while close peers showed mixed moves (e.g., EPC -1.34%, HNST +...

1 Up

YSG was down 2.8% while close peers showed mixed moves (e.g., EPC -1.34%, HNST +2.47%, HELE +1.19%). Momentum scanner only flagged COTY up 0.86%, suggesting this financing news was more stock-specific than sector-driven.

Historical Context

5 past events · Latest: Mar 02 (Positive)

Pattern 5 events

Date	Event	Sentiment	Move	Catalyst
Mar 02	Earnings results	Positive	-9.0%	Q4 and FY 2025 revenue growth, margin expansion, and improved profitability.
Feb 23	Earnings date	Neutral	+1.2%	Announcement of Q4 and FY 2025 results release timing and conference call.
Nov 17	Earnings results	Positive	-20.3%	Q3 2025 revenue and skincare growth with higher gross margin and narrower losses.
Nov 13	Corporate update	Positive	-5.0%	Release of beauty innovation white paper and disclosure of R&D and ESG achievements.
Nov 10	Earnings date	Neutral	+4.5%	Notice of Q3 2025 results date and investor call logistics and replay details.

Pattern Detected

Recent history shows multiple cases where seemingly positive operational updates were followed by negative price reactions, especially around earnings releases.

Recent Company History

Over the past several months, YSG reported strong growth, with Q3 and Q4 2025 revenues rising sharply and gross margins near 78.2%, while losses narrowed and non-GAAP net income turned positive. Despite this, shares fell -20.32% and -8.99% after the last two earnings releases. Corporate and ESG messaging in November 2025 also preceded a -5.01% move. Today’s private placement arrives after this pattern of weak price follow-through on fundamentally constructive updates.

Market Pulse Summary

This announcement details a US$120 million private placement of low-coupon (1.5%) convertible senior...

Analysis

This announcement details a US$120 million private placement of low-coupon (1.5%) convertible senior notes and warrants, with conversion set at $4.63, a 20% premium to recent VWAP. Proceeds are earmarked for R&D, supply chain, overseas expansion, and M&A, with the founder co-investing alongside Trustar Capital. In light of earlier earnings showing revenue growth and improving profitability, investors may focus on how this financing affects dilution, execution on expansion plans, and progress against past growth targets.

Key Terms

convertible senior notes, warrants, american depositary shares, internal rate of return, +2 more

6 terms

convertible senior notes financial

"the Purchaser will subscribe for RMB-denominated convertible senior notes in an aggregate"

Convertible senior notes are a type of loan that a company issues to investors, which can be turned into company shares later on. They are called "senior" because they are paid back before other debts if the company runs into trouble. This allows investors to earn interest like a loan but also have the chance to own part of the company if its value rises.

warrants financial

"together with warrants to purchase Class A ordinary shares of the Company (the "Warrants")."

Warrants are special documents that give you the right to buy a company's stock at a set price before a certain date. They are often used as a way for companies to attract investors or raise money, and their value can increase if the company's stock price goes up.

american depositary shares financial

"converted into the Company's Class A ordinary shares or American depositary shares ("ADSs"),"

American depositary shares (ADSs) are a way for investors in the United States to buy shares of foreign companies without dealing with international markets directly. They represent ownership in a foreign company's stock and are traded on U.S. stock exchanges, making it easier for American investors to buy, sell, and own parts of companies from around the world.

internal rate of return financial

"at a repurchase price reflecting a 4% internal rate of return (with any interests already"

A percentage that represents the annualized yield an investment would earn, taking into account the timing and amount of all cash inflows and outflows; mathematically it is the rate that makes the discounted sum of future cash flows equal the initial cost. Investors use it to compare different projects or deals the way they compare interest rates — a higher internal rate of return suggests a stronger potential payoff, but it does not by itself show risk, scale, or timing nuances.

registration rights regulatory

"agreed to grant the Purchaser certain registration rights with respect to the Class A"

Registration rights are contractual promises that let investors require a company to file paperwork with securities regulators so those investors can sell their shares to the public. They matter because they create a path to liquidity and an exit plan—without them, investors may be stuck holding shares for a long time. Think of them like a reserved ticket that guarantees access to a public marketplace when the holder is ready to sell.

National Development and Reform Commission regulatory

"foreign debt registration certificate from the National Development and Reform Commission"

China's National Development and Reform Commission is the central government agency that plans and guides the country’s economic strategy, approves major infrastructure and industrial projects, and sets long-term targets for growth, energy use and prices. For investors it matters because its decisions can open or close markets, speed up or slow investment, and reshape demand for materials and services — much like a city planner whose permits and rules determine where money and construction flow.

AI-generated analysis. Not financial advice.

GUANGZHOU, China, March 11, 2026 /PRNewswire/ -- Yatsen Holding Limited ("Yatsen" or the "Company") (NYSE: YSG), a leading China-based beauty group, today announced that the Company has entered into a definitive agreement with an investment vehicle (the "Purchaser") affiliated with Trustar Capital and Mr. Jinfeng Huang, the Company's founder, Chairman of the Board of Directors (the "Board") and Chief Executive Officer. Pursuant to the agreement, the Purchaser will subscribe for RMB-denominated convertible senior notes in an aggregate principal amount equivalent to approximately US$120 million, to be issued in two equal tranches (the "First Note" and the "Second Note"; together, the "Notes"), together with warrants to purchase Class A ordinary shares of the Company (the "Warrants"). Mr. Huang is participating in this investment on a personal basis alongside Trustar Capital as a co-investor through the Purchaser, underscoring his strong confidence in the Company's long-term prospects.

Subject to closing conditions, the First Note is expected to be issued in or around March 2026, and the Second Note is expected to be issued later this year. The transaction has been reviewed and approved by the Board and its audit committee. The Company plans to use the net proceeds from the issuance of the Notes for future product research and development ("R&D"), global supply chain integration, overseas market expansion, and strategic mergers and acquisitions ("M&A"), and other corporate purposes, to further drive the Company's business growth.

Mr. Jinfeng Huang, Founder, Chairman, and CEO of Yatsen, stated: "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. Going forward, we will strengthen our strategic partnership to unlock new synergies, driving sustainable growth and value creation for our shareholders."

Mr. Yichen Zhang, Chairman and CEO of CITIC Capital and Chairman of Trustar Capital, also commented: "We highly recognize Yatsen's continued commitment to its strategic transformation, particularly its relentless focus on product portfolio optimization, organizational enhancement, and brand building, which have established a solid foundation for sustainable growth. This investment also reflects our deep confidence in Mr. Jinfeng Huang and his management team. They possess an exceptional global vision and have demonstrated strong capability in integrating global brands resources. Trustar Capital looks forward to leveraging this partnership to support Yatsen in integrating global resources through cross-border M&A, accelerating its evolution into a leading global beauty group."

Beyond capital support, this transaction marks a deepening strategic alliance. Trustar Capital will leverage its extensive network to assist Yatsen in capturing strategic synergies across the beauty industry value chain. By drawing on Trustar Capital's proven track record in cross-border acquisitions and post-merger integration, Yatsen aims to further its global expansion strategy and solidify its position in the global beauty market.

Terms of the Notes and the Warrants

The Notes will bear interest at a rate of 1.5% per annum, payable semi-annually. The First Note has an initial maturity of 364 days from issuance, which will automatically extend to five years upon the Company's receipt of a foreign debt registration certificate from the National Development and Reform Commission of the People's Republic of China (the "NDRC Certificate"). The Second Note, if issued following the satisfaction of the applicable closing conditions (including receipt of the NDRC Certificate), will mature on the fifth anniversary of the issue date of the First Note. Following an initial period of 364 days from the issue date of the First Note, the Notes may be converted into the Company's Class A ordinary shares or American depositary shares ("ADSs"), each currently representing twenty Class A ordinary shares, subject to the terms of the Notes. The conversion price is $4.63, reflecting a premium of 20% above the volume weighted average price of the ADSs for the five consecutive trading days prior to, and including, the trading day immediately preceding the date of the note purchase agreement. At each closing, the Company will also issue the Warrants entitling the Warrant holder to acquire, on a cashless basis, a number of Class A ordinary shares equal in the aggregate to one-tenth of the Class A ordinary shares issued upon conversion of the corresponding Note, at an exercise price of US$0.50 per Class A ordinary share (equivalent to US$10.00 per ADS). Holders of the Notes have the right to require the Company to repurchase all or part of the Notes for cash on the third anniversary of the issue date of the First Note at a repurchase price reflecting a 4% internal rate of return (with any interests already paid deducted from the amount payable). The Company has also agreed to grant the Purchaser certain registration rights with respect to the Class A ordinary shares issuable upon conversion of the Notes and exercise of the Warrants.

The issuance of the securities under this transaction has not been registered and is exempt from registration under the Securities Act of 1933, as amended. This press release does not constitute an offer to sell or a solicitation of an offer to buy the securities described herein, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful.

About Trustar Capital

Trustar Capital, the private equity affiliate of CITIC Capital Holdings Limited, focuses on control buyout opportunities globally and has completed over 100 investments since inception across China, Japan, U.S., Europe, etc. Trustar Capital currently manages US$10.2 billion of committed capital. Trustar Capital possesses profound investment expertise within the beauty industry. Its portfolio includes Axilone, one of the world's leading primary beauty packaging providers, which serves many prestigious global brands. Furthermore, Trustar Capital's extensive footprint in the pharmaceutical and biotechnology sectors positions it to provide critical support for the Company's cutting-edge product R&D. Trustar Capital also brings a proven track record in driving digital transformation.

For more information, please visit www.trustarcapital.com.

About Yatsen Holding Limited

Yatsen Holding Limited (NYSE: YSG) is a leading China-based beauty group with the vision of becoming a world-class pioneer in beauty innovation. Founded in 2016, the Company has launched and acquired numerous color cosmetics and skincare brands including Perfect Diary, Little Ondine, Pink Bear, Galénic, DR.WU (its mainland China business), and Eve Lom.

For more information, please visit http://ir.yatsenglobal.com/. 

Safe Harbor Statement

This announcement contains statements that may constitute "forward-looking" statements which are made pursuant to the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "aims," "future," "intends," "plans," "believes," "estimates," "likely to," and similar statements. The Company may also make written or oral forward-looking statements in its periodic reports to the Securities and Exchange Commission ("SEC"), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about the Company's beliefs, plans, outlook and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: the Company's growth strategies; its future business development, results of operations and financial condition; its ability to continue to roll out popular products and maintain popularity of existing products; its ability to anticipate and respond to changes in industry trends and consumer preferences and behavior in a timely manner; its ability to attract and retain new customers and to increase revenues generated from repeat customers; its expectations regarding demand for and market acceptance of its products and services; its ability to integrate newly-acquired businesses and brands; trends and competition in and relevant government policies and regulations relating to China's beauty market; changes in its revenues and certain cost or expense items; and general economic conditions globally and in China. Further information regarding these and other risks is included in the Company's filings with the SEC. All information provided in this press release is as of the date of this press release, and the Company does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

For investor and media inquiries, please contact:

Yatsen Holding Limited
Investor Relations
E-mail: ir@yatsenglobal.com

View original content:https://www.prnewswire.com/news-releases/yatsen-announces-private-placement-of-convertible-notes-and-warrants-302710768.html

SOURCE Yatsen Holding Limited

FAQ

What did YSG announce on March 11, 2026 regarding financing?

Yatsen announced a private placement of convertible notes and warrants totaling about US$120 million. According to the company, proceeds will fund R&D, supply chain integration, overseas expansion and strategic M&A to support growth plans.

Who is participating in the YSG private placement alongside Trustar Capital?

Founder Jinfeng Huang is participating as a co-investor alongside Trustar Capital through the Purchaser. According to the company, his personal investment underscores confidence in Yatsen's long-term trajectory and strategic roadmap.

What are the key economic terms of the YSG Notes and Warrants?

The Notes bear 1.5% annual interest and convert at $4.63 per share, a 20% premium. According to the company, Warrants equal one-tenth of shares issuable on conversion with a $0.50 per Class A share exercise price.

When will the YSG First and Second Notes be issued and mature?

The First Note is expected in or around March 2026; the Second Note later in 2026 if closing conditions are met. According to the company, the First Note matures in 364 days and can extend to five years upon NDRC certification.

How could the YSG transaction affect existing shareholders?

Conversion of the Notes and exercise of Warrants may dilute existing holders if converted to Class A shares or ADSs. According to the company, registration rights will be provided for shares issuable upon conversion and warrant exercise.