Yatsen Announces Plan to Implement ADS Ratio Change

Rhea-AI Summary

Yatsen Holding Limited (YSG) announces a change in the ratio of its American depositary shares (ADSs) to its Class A ordinary shares, consolidating from 1:4 to 1:20, equivalent to a one-for-five reverse ADS split.

Insights

Financial Analyst

The adjustment in the ADS Ratio by Yatsen from one ADS representing four Class A ordinary shares to representing twenty indicates a reverse split of the company's ADS on a one-for-five basis. This corporate action typically aims to boost the price of the ADSs on the market, possibly to maintain compliance with exchange listing requirements or to improve the perception of the company's stock. It's important to note that while the nominal price per ADS will increase, the value of shareholders' investments remains unchanged, as they will hold fewer ADSs post-split.

Historically, reverse splits can be viewed as a red flag by investors, as they may signal that a company has been struggling to maintain its share price. However, it can also be seen as a strategic move to attract institutional investors who might avoid lower-priced stocks. The market's reaction to such news will depend on the perceived rationale behind the split and the company's future growth prospects. Shareholders should closely monitor the stock's performance post-split for any signs of improved market confidence or, conversely, further decline.

Market Research Analyst

From a market perspective, Yatsen's decision to change its ADS Ratio could impact trading liquidity. Higher-priced stocks often experience lower trading volumes, which can make them less attractive to retail investors. However, this can also reduce volatility and make the stock more appealing to long-term investors. In the context of the beauty industry, where brand perception and consumer confidence play significant roles, maintaining a certain stock price could be part of a broader strategy to align the company's market image with its brand image.

Additionally, the reverse split decision should be evaluated alongside Yatsen's performance in the competitive beauty market. Factors such as the company's innovation pipeline, market share trends and consumer loyalty will be critical in determining whether the reverse split will have a positive or negative impact on the company's long-term valuation.

Economist

An economist would assess the broader economic implications of Yatsen's ADS Ratio change, considering the economic environment in which the company operates. China's regulatory landscape, consumer spending habits and currency fluctuations could all influence the effectiveness of this corporate action. If the reverse split is part of a strategic pivot amidst economic headwinds, it could signal the company's resilience and adaptability.

Moreover, the reverse split may affect the company's capital structure and could be a precursor to future financial maneuvers, such as raising capital or pursuing acquisitions. Long-term stakeholders should evaluate how this change aligns with the company's financial strategy and growth objectives within the broader economic context.

GUANGZHOU, China, March 8, 2024 /PRNewswire/ -- Yatsen Holding Limited ("Yatsen" or the "Company") (NYSE: YSG), a leading China-based beauty group, today announced that, it will change the ratio of its American depositary shares ("ADSs") to its Class A ordinary shares (the "ADS Ratio") from one (1) ADS representing four (4) Class A ordinary shares to one (1) ADS representing twenty (20) Class A ordinary shares.

For the Company's ADS holders, the change in the ADS Ratio will have the same effect as a one-for-five reverse ADS split. A post-effective amendment to the ADS Registration Statement on Form F-6 will be filed with the SEC to reflect the change in the ADS Ratio. The Company anticipates that the change in the ADS Ratio will be effective on or about March 18, 2024 (U.S. Eastern Time), subject to the effectiveness of the post-effective amendment to the ADS Registration Statement on Form F-6 on or before that date.

Each ADS holder of record at the close of business on the date when the change in ADS Ratio is effective will be required to surrender and exchange every five (5) existing ADSs then held for one (1) new ADS. Deutsche Bank Trust Company Americas, as the depositary bank for the Company's ADS program, will arrange for the exchange of the current ADSs for the new ones.

No fractional new ADSs will be issued in connection with the change in the ADS Ratio. Instead, fractional entitlements to new ADSs will be aggregated and sold by the depositary bank and the net cash proceeds from the sale of the fractional ADS entitlements (after deduction of fees, taxes and expenses, where applicable) will be distributed to the applicable ADS holders by the depositary bank. The change in the ADS Ratio will have no impact on the Company's underlying Class A ordinary shares, and no Class A ordinary shares will be issued or cancelled in connection with the change in the ADS Ratio. The Company's ADSs will continue to be traded on the New York Stock Exchange under the ticker symbol "YSG."

As a result of the change in ADS Ratio, the ADS trading price is expected to increase proportionately, although the Company can give no assurance that the ADS trading price after the change in the ADS Ratio will be equal to or greater than five times the ADS trading price before the change.

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, which include 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.

About Yatsen Holding Limited

Yatsen Holding Limited (NYSE: YSG) is a leading China-based beauty group with the mission of creating an exciting new journey of beauty discovery for consumers around the world. Founded in 2016, the Company has launched and acquired numerous color cosmetics and skincare brands including Perfect Diary, Little Ondine, Abby's Choice, Galénic, DR.WU (its mainland China business), Eve Lom, Pink Bear and EANTiM. The Company's flagship brand, Perfect Diary, is one of the leading color cosmetics brands in China in terms of retail sales value. The Company primarily reaches and engages with customers directly both online and offline, with expansive presence across all major e-commerce, social and content platforms in China.

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

For investor and media inquiries, please contact:

In China:

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

Piacente Financial Communications
Hui Fan
Tel: +86-10-6508-0677
E-mail: yatsen@thepiacentegroup.com

In the United States:

Piacente Financial Communications
Brandi Piacente
Tel: +1-212-481-2050
E-mail: yatsen@thepiacentegroup.com

View original content:https://www.prnewswire.com/news-releases/yatsen-announces-plan-to-implement-ads-ratio-change-302083881.html

SOURCE Yatsen Holding Limited

FAQ

What change did Yatsen Holding Limited (YSG) announce regarding its American depositary shares (ADSs)?

Yatsen Holding Limited (YSG) announced a change in the ratio of its ADSs to its Class A ordinary shares, consolidating from 1:4 to 1:20, equivalent to a one-for-five reverse ADS split.

What is the impact of the change in the ADS Ratio for the Company's ADS holders?

The change in the ADS Ratio will have the same effect as a one-for-five reverse ADS split for the Company's ADS holders.

What regulatory filing will Yatsen Holding Limited (YSG) make to reflect the change in the ADS Ratio?

Yatsen Holding Limited (YSG) will file a post-effective amendment to the ADS Registration Statement on Form F-6 with the SEC to reflect the change in the ADS Ratio.

When is the Company anticipating the change in the ADS Ratio to be effective?

The Company anticipates that the change in the ADS Ratio will be effective on or before a specified date.