Yatsen Holding Ltd (YSG) 2024 Q3 法說會逐字稿

Ladies and gentlemen, good day, and welcome to the Yatsen third quarter 2024 earnings conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Irene Lyu, Vice President, Head of Strategic Investment and Capital Markets. Please go ahead.

女士們、先生們，大家好，歡迎參加逸仙 2024 年第三季財報電話會議。今天的會議正在錄製。現在，我想將會議交給副總裁、策略投資和資本市場主管 Irene Lyu。請繼續。

Thank you, operator. Please note the discussion 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 US Private Securities Litigation Reform Act.

謝謝您，接線生。請注意，今天的討論將包含與公司未來業績有關的前瞻性陳述，並旨在符合美國私人證券訴訟改革法案規定的免於責任的安全港規定。

Such statements are not guarantees of 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.

此類聲明並非對未來績效的保證，並且受某些風險和不確定性、假設和其他因素的影響。其中一些風險超出了公司的控制範圍，可能會導致實際結果與今天的新聞稿和本討論中提到的結果有重大差異。

A general discussion of the risk factors that could affect Yatsen'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.

有關可能影響逸仙公司業務和財務表現的風險因素的一般性討論已包含在該公司向美國證券交易委員會提交的某些文件中。除法律要求外，本公司不承擔更新此前瞻性資訊的任何義務。

During today's call, management will also discuss certain non-GAAP financial measures for comparison purposes only. Please see the earnings release issued earlier today for a definition of non-GAAP financial measures and a reconciliation of GAAP to non-GAAP financial results.

在現今的電話會議上，管理階層還將討論某些非 GAAP 財務指標，僅供比較之用。請參閱今天稍早發布的收益報告，以了解非 GAAP 財務指標的定義以及 GAAP 與非 GAAP 財務結果的對照表。

Joining us today on the call from Yatsen's senior management are Mr. Jinfeng 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.

今天參加逸仙管理層電話會議的還有我們的創辦人、董事長兼執行長黃金峰先生；以及我們的財務長兼董事楊東浩先生。管理階層將以準備好的發言開始會議，並以問答環節結束會議。

As a reminder, this conference is being recorded. In addition, a webcast replay of this conference call will be available on Yatsen's Investor Relations website at ir.yatsenglobal.com.

提醒一下，本次會議正在錄音。此外，逸仙投資者關係網站ir.yatsenglobal.com 上將提供本次電話會議的網路重播。

I will now turn the call over to Mr. Jinfeng Huang. Please go ahead, sir.

現在我將電話轉給黃金鋒先生。先生，請繼續。

Thank you, Irene, and thank you, everyone, for participating in Yatsen's third quarter 2024 earnings conference call today. I will start with a macro overview and our key financial metrics, followed by insights into our strategy and updates on our brands and products.

謝謝艾琳，也謝謝大家今天參加逸仙 2024 年第三季財報電話會議。我將首先介紹宏觀概況和我們的關鍵財務指標，然後介紹我們的策略以及我們的品牌和產品的最新情況。

China's beauty industry faced significant challenges in the third quarter with beauty sales significantly lagging the overall retail market. According to the adjusted data from China's National Bureau of Statistics, total retail sales of consumer goods grew by 2.7% year-over-year for the third quarter, while beauty retail sales declined sharply by 5.5%.

第三季度，中國美妝產業面臨重大挑戰，美容產品銷售額明顯落後於整體零售市場。根據中國國家統計局修正後的數據，第三季社會消費品零售總額年增2.7%，但美容美髮類零售額卻大幅下降5.5%。

Notably, September marked the fourth consecutive month of year-over-year declines in beauty retail sales since June. Online beauty sales were also sluggish in the third quarter. Tmall reported a year-over-year drop in both color cosmetics and skin care sales, while Douyin sustained modest double-digit growth.

值得注意的是，自 6 月以來，9 月已是美容零售額連續第四個月同比下滑。第三季網路美容產品銷售同樣低迷。天貓公佈的彩妝和保養品銷售額較去年同期均出現下降，而抖音則維持了兩位數的溫和成長。

Despite a challenging market, we delivered results in line with our guidance. Total net revenues decreased by 5.7% year-over-year. However, net revenues from skin care brands rose by 3.6% year-over-year, driven by a 10.5% year-over-year increase in our clinical and premium skin care brands, including Galenic, Dr. Wu and Eve Lom.

儘管市場充滿挑戰，我們仍取得了符合預期的績效。總淨收入較去年同期下降5.7%。然而，護膚品牌的淨收入年增 3.6%，這得益於我們的臨床和高端護膚品牌（包括 Galenic、Dr. Wu 和 Eve Lom）同比增長 10.5%。

Conversely, net revenues from our color cosmetic brands fell by 10% year-over-year, largely due to decreased sales from the Perfect Diary, brand, which is undergoing a strategic transformation to revamp its product line and optimize its channel mix.

相反，我們彩妝品牌的淨收入比去年同期下降了 10%，這主要是由於完美日記品牌銷售下降，該品牌正在進行戰略轉型，重塑其產品線並優化其管道組合。

On the profitability front, our overall gross margin improved to 75.9% in the third quarter, up from 71.4% in the prior year period, driven by a higher contribution from high-margin products. We also reduced our net loss margin by 9.7 percentage points to 7.9% from 27.6% in the prior year through strategic marketing spending and optimized general and administrative expenses.

在獲利能力方面，由於高利潤產品貢獻率增加，我們的整體毛利率從去年同期的 71.4% 提高至第三季的 75.9%。我們也透過策略行銷支出和優化一般及行政開支，將淨虧損率從上年的27.6%降低9.7個百分點至7.9%。

Next, I would like to provide more color on the progress of our strategic transformation, which we advanced during the third quarter to drive sustainable growth. One key initiative is optimizing our revenue mix by prioritizing a higher-margin products. This involves expanding our skincare brands and introducing new color cosmetics products with higher gross margins, supported by our growing R&D capabilities. We are also refining our cost structure to boost profitability.

接下來，我想進一步介紹我們的策略轉型進展，我們在第三季推動了策略轉型，以推動永續成長。一項關鍵舉措是透過優先考慮利潤率較高的產品來優化我們的收入組合。這包括擴大我們的護膚品牌，並在我們不斷增強的研發能力的支持下推出毛利率更高的新型彩妝產品。我們也正在改進成本結構以提高獲利能力。

Operationally, we have streamlined our organizational structure to reduce general and administrative expenses, setting the stage for operating leverage once net revenue return to growth. These efforts provide a solid foundation for sustainable long-term growth and will enhance our ability to improve profitability as revenue recover.

在營運方面，我們精簡了組織架構，以減少一般和行政費用，為淨收入恢復成長後的營運槓桿奠定基礎。這些努力為長期可持續成長奠定了堅實的基礎，並將增強我們在收入恢復時提高獲利能力的能力。

As part of our strategic transformation initiatives, we made substantial investments in R&D with our third quarter research and development expenses totaling RMB25.3 million, representing 3.7% of net revenues. This consistent investment has significantly improved our R&D capability, enabling us to develop new high-quality products.

作為我們策略轉型舉措的一部分，我們在研發方面進行了大量投資，第三季研發費用總計 2,530 萬元，佔淨收入的 3.7%。持續的投入極大提高了我們的研發能力，使我們能夠開發出新的高品質的產品。

In the third quarter, Perfect Diary launched the second-generation Biolip Essence Lipstick that leveraged the upgraded biotech technology. Launched in late September, the product became the top seller in the lipstick category in terms of retail sales value on Douyin during the first week of October.

第三季度，完美日記推出第二代Biolip精華唇膏，融合升級後的生技技術。該產品於 9 月下旬推出，10 月第一周便成為抖音口紅類商品的零售額冠軍。

Galenic also launched several new products. The (technical difficulty) UV multi-protection featuring our innovative active anchor technology provides high-level full spectrum sun protection. The number two vitamin A serum offers a highly efficacious and clinical proven skin care solution to improve skin texture and reduce wrinkles.

Galenic 也推出了幾款新產品。採用我們創新的主動錨定技術的（技術難度）紫外線多重防護可提供高水準的全光譜防曬保護。排名第二的維生素 A 精華液提供了一種高效且經過臨床驗證的皮膚護理解決方案，可改善皮膚紋理並減少皺紋。

For the Double 11 shopping festival, we are pleased to report positive results across our brands, driven by the products we mentioned before as well as other offerings launched throughout the year, including the Galenic Vivinfant MicroMask and our existing hero products.

對於雙十一購物節，我們很高興地報告我們各個品牌都取得了積極的成果，這得益於我們之前提到的產品以及全年推出的其他產品，包括 Galenic Vivinfant MicroMask 和我們現有的主打產品。

At the end of October, Perfect Diary has entered the top 20 color cosmetic brands in terms of combined sales on Tmall and Douyin. In addition, Galenic performed strongly during the festival, ranking number one among premium whitening products within Austin Li's live streaming room and number three among imported anti-wrinkle serum products on Tmall.

截至10月底，完美日記已進入天貓、抖音綜合銷售TOP20彩妝品牌。此外，Galenic在節慶期間表現強勁，位列李佳琦直播間高端美白產品第一名，天貓進口抗皺精華產品第三名。

Furthermore, Galenic participated in the 33rd European Academic of Dermatology and Rhinology Congress in Amsterdam in September where we presented groundbreaking clinical research on our Galenic number one vitamin C serum in conjunction with yellow light therapy for effectively treating melasma. This collaboration with leading international experts underscores our dedication to dermatological science.

此外，Galenic 於 9 月參加了在阿姆斯特丹舉行的第 33 屆歐洲皮膚病學和鼻科學會大會，在會上我們展示了我們的 Galenic 一號維生素 C 精華結合黃光療法有效治療黃褐斑的開創性臨床研究。與國際頂尖專家的合作彰顯了我們對皮膚病學的奉獻精神。

Meanwhile, Eve Lom hosted a global summit on emotional skin care at the University of Oxford, highlighting the stress relieving benefits of Eve Lom daily rejuvenating cream and showcasing our latest innovations in emotional skin care.

同時，Eve Lom 在牛津大學舉辦了情緒護膚全球高峰會，重點介紹了 Eve Lom 日常活膚霜的緩解壓力功效，並展示了我們在情緒護膚方面的最新創新。

In terms of our efforts to optimize our cost structure, we also made significant progress in the third quarter. Our general and administrative expenses for the quarter were RMB85 million, representing 12.6% of net revenues, a substantial improvement from RMB151.8 million or 21.1% of net revenues for the prior year period. By reducing our fixed cost levels, we are moving closer to our goal of sustainable growth.

在優化成本結構的努力方面，我們在第三季也取得了重大進展。本季我們的一般及行政開支為人民幣 8,500 萬元，佔淨收入的 12.6%，較去年同期的人民幣 1.518 億元或占淨收入的 21.1% 有大幅改善。透過降低固定成本水平，我們正在更接近永續成長的目標。

Lastly, I would like to provide an update on our ESG initiatives. We recently released our 2023 environmental, social and governance report, marking our third consecutive year of depending commitment to transparency and sustainability. We are proud to maintain our MSCI ESG rating of A, reflecting our strong performance in several key areas, including product packaging and waste management, product carbon footprint and chemical safety.

最後，我想介紹一下我們的 ESG 舉措的最新進展。我們最近發布了 2023 年環境、社會和治理報告，這是我們連續第三年致力於透明度和永續性。我們很自豪能夠維持 MSCI ESG A 級評級，這反映了我們在產品包裝和廢棄物管理、產品碳足跡和化學品安全等幾個關鍵領域的強勁表現。

Our dedication to excellence in green and low-carbon initiatives continues to enhance our position as a responsible leader in the beauty industry.

我們致力於卓越的綠色和低碳舉措，不斷提升我們作為美容行業負責任領導者的地位。

In conclusion, while the beauty industry continues to face challenges, we remain optimistic about our ability to adapt and thrive. With our focus on innovation, brand building and sustainable practices, we are confident that we are well positioned to achieve year-over-year revenue growth in the fourth quarter.

總而言之，儘管美容行業繼續面臨挑戰，但我們對我們的適應和發展能力仍然持樂觀態度。透過專注於創新、品牌建立和永續實踐，我們相信我們有能力在第四季度實現同比成長。

Additionally, our commitment in quality and consumer engagement will enhance brand loyalty given our long-term progress. With that, I will now turn the call over to our CFO, Donghao Yang, to discuss our financial performance.

此外，鑑於我們的長期進步，我們對品質和消費者參與的承諾將增強品牌忠誠度。現在，我將把電話轉給我們的財務長楊東浩，討論我們的財務表現。

Thank you, everyone.

謝謝大家。

Thank you, David, and hello, everyone. Before I get started, I would like to clarify that all financial numbers presented today are in renminbi amounts, and all percentage changes refer to year-over-year changes unless otherwise noted.

謝謝你，大衛，大家好。在開始之前，我想澄清一下，今天呈現的所有財務數字都是以人民幣計算的，所有百分比變化均指同比變化，除非另有說明。

Total net revenues for the third quarter of 2024 decreased by 5.7% to RMB677 million from RMB718.1 million for the prior year period. The decrease was primarily due to a 10% year-over-year decrease in net revenues from color cosmetics brands, partially offset by a 3.6% year-over-year increase in net revenues from skincare brands.

2024年第三季總淨收入較去年同期的7.181億元下降5.7%至6.77億元。下降的主要原因是彩妝品牌淨收入年減10%，但護膚品牌淨收入較去年同期成長3.6%部分抵銷了這一影響。

Gross profit for the third quarter of 2024 increased by 0.2% to RMB513.8 million from RMB512.8 million for the prior year period. Gross margin for the third quarter of 2024 increased to 75.9% from 71.4% for the prior year period. The increase was primarily driven by an increase in sales of higher gross margin products.

2024年第三季毛利較去年同期的5.128億元成長0.2%至5.138億元。2024 年第三季的毛利率從去年同期的 71.4% 上升至 75.9%。成長的主要原因是毛利率較高的產品銷售增加。

Total operating expenses for the third quarter of 2024 decreased by 12% to RMB655.2 million from RMB744.3 million for the prior year period. As a percentage of total net revenues, total operating expenses for the third quarter of 2024 were 96.8% as compared with 103.6% for the prior year period.

2024年第三季總營業費用較去年同期的7.443億元下降12%至6.552億元。作為總淨收入的百分比，2024 年第三季的總營運費用為 96.8%，而去年同期為 103.6%。

Fulfillment expenses for the third quarter of 2024 were RMB50.4 million as compared with RMB56 million for the prior year period. As a percentage of total net revenues, Fulfillment expenses for the third quarter of 2024 decreased to 7.4% from 7.8% for the prior year period. The decrease was primarily due to an increase in the overall average selling price of our products as well as further improvements in logistics efficiency.

2024 年第三季的履行費用為人民幣 5,040 萬元，而去年同期為 5,600 萬元。作為總淨收入的百分比，2024 年第三季的履行費用從去年同期的 7.8% 下降至 7.4%。下降主要是由於我們產品整體平均售價上升以及物流效率進一步提高。

Selling and marketing expenses for the third quarter of 2024 were RMB494.4 million as compared with RMB511.7 million for the prior year period. As a percentage of total net revenues, selling and marketing expenses for the third quarter of 2024 increased to 73% from 71.3% for the prior year period. The increase was primarily due to increased investment in the Douyin platform in line with the growing revenue contribution from Douyin, partially offset by lower marketing expenses as a result of our more strategic marketing spending.

2024 年第三季的銷售和行銷費用為 4.944 億元，而去年同期為 5.117 億元。作為總淨收入的百分比，2024 年第三季的銷售和行銷費用從去年同期的 71.3% 增加至 73%。成長的主要原因是隨著抖音收入貢獻的不斷增長，對抖音平台的投資也隨之增加，但由於我們更具策略性的行銷支出導致的行銷費用降低，部分抵消了這一增長。

General and administrative expenses for the third quarter of 2024 were RMB85 million as compared with RMB151.8 million for the prior year period. As a percentage of total net revenues, general and administrative expenses for the third quarter of 2024 decreased to 12.6% from 21.1% for the prior year period. The decrease was primarily attributable to lower payroll expenses resulting from a reduction in general and administrative headcount and lower share-based compensation expenses.

2024 年第三季的一般及行政費用為 8,500 萬元，而去年同期為 1.518 億元。作為總淨收入的百分比，2024 年第三季的一般及行政費用從去年同期的 21.1% 下降至 12.6%。下降主要歸因於一般及行政人員數量減少導致的工資支出降低以及股權激勵費用降低。

Research and development expenses for the third quarter of 2024 were RMB25.3 million as compared with RMB24.7 million for the prior year period. As a percentage of total net revenues, research and development expenses for the third quarter of 2024 increased to 3.7% from 3.4% for the prior year period. The increase was primarily attributable to the deleveraging effect of lower total net revenues in the third quarter of 2024.

2024 年第三季研發費用為 2,530 萬元，去年同期為 2,470 萬元。作為總淨收入的百分比，2024 年第三季的研發費用從去年同期的 3.4% 增加至 3.7%。成長主要歸因於 2024 年第三季總淨收入下降帶來的去槓桿效應。

Loss from operations for the third quarter of 2024 was RMB141.3 million as compared with RMB231.5 million for the prior year period. Operating loss margin was 20.9% as compared with 32.2% for the prior year period. Non-GAAP loss from operations for the third quarter of 2024 was RMB98.5 million as compared with RMB164.6 million for the prior year period. Non-GAAP operating loss margin was 14.5% as compared with 22.9% for the prior year period.

2024年第三季營業虧損為人民幣1.413億元，去年同期為人民幣2.315億元。營業虧損率為 20.9%，去年同期為 32.2%。2024 年第三季非公認會計準則營業虧損為 9,850 萬元，去年同期為 1.646 億元。非公認會計準則營業虧損率為 14.5%，去年同期為 22.9%。

Net loss for the third quarter of 2024 was RMB121.1 million as compared with RMB197.9 million for the prior year period. Net loss margin was 17.9% as compared with 27.6% for the prior year period. Net loss attributable to Yatsen's ordinary shareholders per diluted ADS for the third quarter of 2024 was RMB1.22 as compared with RMB1.81 for the prior year period.

2024年第三季淨虧損為1.211億元，去年同期為1.979億元。淨虧損率為 17.9%，去年同期為 27.6%。2024年第三季逸仙普通股股東每股攤薄美國存託憑證淨虧損為1.22元，去年同期為人民幣1.81元。

Non-GAAP net loss for the third quarter of 2024 was RMB76.6 million as compared with RMB130.2 million for the prior year period. Non-GAAP net loss margin was 11.3% as compared with 18.1% for the prior year period. Non-GAAP net loss attributable to Yatsen's ordinary shareholders per diluted ADS for the third quarter of 2024 was RMB0.77 as compared with RMB1.19 for the prior year period.

2024年第三季非公認會計準則淨虧損為人民幣7,660萬元，去年同期為人民幣1.302億元。非公認會計準則淨虧損率為 11.3%，去年同期為 18.1%。2024年第三季非美國通用會計準則下逸仙普通股股東每股攤薄美國存託憑證淨虧損為人民幣0.77元，去年同期為人民幣1.19元。

As of September 30, 2024, we had cash, restricted cash and short-term investments of RMB1.31 billion as compared with RMB2.08 billion as of December 31, 2023. Net cash used in operating activities for the third quarter of 2024 was RMB175.9 million as compared with RMB163.4 million for the prior year period.

截至 2024 年 9 月 30 日，我們的現金、受限現金和短期投資為人民幣 13.1 億元，而截至 2023 年 12 月 31 日為人民幣 20.8 億元。2024年第三季經營活動所用淨現金為人民幣1.759億元，去年同期為人民幣1.634億元。

Looking at our business outlook for the fourth quarter of 2024, we expect our total net revenues to be between RMB1.07 billion and RMB1.18 billion, representing a year-over-year increase of approximately 0% to 10%. These forecasts reflect our current and preliminary views on the market and operational conditions, which are subject to change.

展望2024年第四季的業務展望，我們預期總淨收入在人民幣10.7億元至人民幣11.8億元之間，年增約0%至10%。這些預測反映了我們對市場和營運條件的當前和初步看法，可能會發生變化。

With that, I would now like to open the call to Q&A. Operator?

現在，我想開始問答環節。操作員？

(Operator Instructions)

（操作員指令）

Maggie Huang, CICC.

Maggie Huang，中金公司。

Well, thanks for taking my question. This is Maggie Huang from CICC. I have two questions. The first one is about our performance during Double 11 festival. And is that in line with our expectation? And the second question is about our plans for product development and channel expansion for the next year. That's my two questions. Thank you.

好吧，感謝您回答我的問題。我是中金公司的 Maggie Huang。我有兩個問題。第一個是我們在雙11期間的表現。這符合我們的預期嗎？第二個問題是關於明年我們產品開發和通路擴展的計畫。這是我的兩個問題。謝謝。

All right. Maggie, thank you very much for your question. Let me take your first question. I think we have done pretty well during the Double 11 festival, pretty much in line with our expectations. Most of our brands have performed in line with our expectations. For example, our Galenic brand, we sold pretty well through a lot -- some very well-known KOLs in line with our expectations and our -- perfect diary also performed pretty well.

好的。瑪吉，非常感謝您的提問。讓我回答你的第一個問題。我覺得雙十一我們的成績還是不錯的，基本上符合我們的預期。我們大多數品牌的表現都符合我們的預期。例如，我們的 Galenic 品牌，透過許多非常知名的 KOL 銷售情況良好，這符合我們的預期，完美日記的表現也相當不錯。

And your second question, what is the plan to -- for product development and channel expansion next year? Well, next year, I think we have made very good plan for our new product development for all of our brands. So we're now trying to put together new product development plans for next year as part of our annual budgeting process.

你的第二個問題是，明年的產品開發和通路擴展計畫是什麼？嗯，明年，我認為我們為所有品牌的新產品開發制定了非常好的計劃。因此，我們現在正試圖將明年的新產品開發計畫作為年度預算流程的一部分。

Channel expansion, I think we will continue to work very hard to drive growth through our top channels like Tmall and Douyin. And also, we're going to try to develop more new channels. For example, for Galenic, we're going to open some new offline stores to explore the feasibility of our business opportunities in the offline channels.

頻道擴展，我認為我們將繼續努力透過天貓和抖音等頂級管道推動成長。此外，我們還將嘗試開發更多新管道。例如對Galenic來說，我們會開設一些新的線下門市，探索線下通路商業機會的可行性。

Yes. Okay. So to build on what Donghao was shared before, I think my overall evaluation about our performance in the Double 11 promotion is in line with our objective. And in some areas, we're exceeding our expectations. So first of all, I think Double 11 is a very important sales event, as we all know.

是的。好的。因此，基於東浩之前分享的內容，我認為我對我們在雙11促銷中的表現的總體評價是符合我們的目標的。在某些領域，我們已經超出了我們的預期。首先，我認為雙11是一個非常重要的銷售活動，眾所周知。

But if we go deeper to our strategy goals for leveraging the Double 11 to improve our sales for our strategic brands and also to catch up with the momentum for new product launch. If we are judging based on the criteria before, I think we have made quite significant progress.

但如果我們更深層的策略目標，即利用雙十一來提高我們策略品牌的銷售量，並趕上新產品發布的勢頭。如果按照之前的標準來判斷的話，我認為我們已經取得了比較顯著的進步。

Here are some examples. So during this year, in Austin Li's live streaming rooms, we have four brands joined the promotion event. And then the Perfect Diary has gained a pretty good momentum to have -- to achieve the sales target for the Biolip Lipstick and also our loose powder. As we all know, loose powder is a very important category to provide opportunity for Perfect Diary to expand our category from lip category to face makeup category.

以下是一些範例。所以今年在李佳琦的直播間裡，我們有四個品牌參與了推廣活動。完美日記獲得了相當不錯的發展勢頭——實現了Biolip 唇膏和散粉的銷售目標。眾所周知，散粉是一個非常重要的品類，為完美日記提供了從唇妝品類拓展到面妝品類的機會。

And then for our Galenic brands, so during the Double 11 promotion, I think the brand has a pretty balanced sales on Tmall and also Douyin. So -- and also Galenic launched new products, the Vitamin A serum, which has helped the brand for future growth to expand the benefit space from purely whitening category and to anti-aging category, which is much bigger than the whitening category from the market size perspective.

對於我們的Galenic品牌來說，在雙11促銷期間，我認為該品牌在天貓和抖音上的銷售相當均衡。因此，Galenic 也推出了新產品維生素 A 精華，這有助於該品牌未來的成長，將收益空間從單純的美白類別擴大到抗衰老類別，從市場規模的角度來看，抗衰老類別比美白類別要大得多。

There's another thing I want to highlight is the optimizing the ROI on investments. I think in next quarter, we are going to release the gross margin for our Q4. But during this promotion, we are very disciplined in controlling the price -- selling price for our hero products. For our lipstick, we are selling in Austin Li's live streaming with RMB130 for one and also RMB240 for two lipstick.

我還想強調的另一件事是優化投資報酬率。我認為下個季度我們將公佈第四季的毛利率。但在這次促銷期間，我們非常嚴格地控制價格——主打產品的售價。我們的口紅在李佳琦的直播間售價一支130元，兩支240元。

This provides us with a very good scenario to maintain the sales momentum while keeping a balanced on the gross margin improvement. I think from the strategic transformation perspective, I think the Double 11 is in line with our expectations.

這為我們提供了一個非常好的方案，以保持銷售勢頭，同時保持毛利率改善的平衡。我認為從策略轉型的角度來看，雙11符合我們的預期。

Your second question, talk about the new product offerings. Again, going back to the transformation guidelines. So I think one of the key important -- key areas that we have been investing is R&D. And then based on the robust R&D performance, we are launching some new products based on the efforts we have been committed to devote in the past few years. And we are very good to see some early indicators on the products we launched in the market. And then based on those indicators, we are happy to see the progress we are making.

您的第二個問題，請談談新的產品。再次回顧轉型指南。因此我認為我們一直在投資的關鍵領域之一就是研發。然後，基於強大的研發表現，我們將根據過去幾年來致力於投入的努力推出一些新產品。我們很高興看到我們在市場上推出的產品的一些早期指標。基於這些指標，我們很高興看到我們的進展。

As I mentioned before, the lipstick -- the Biolip Lipstick (technical difficulty) helps the brand to regain the growth momentum and also improve the brand's gross margin. And then for our other clinical and skin care brands, and we launched some new products, and then we are also very happy to see the early results for those products, which will provide us some foundations in the future for sustainable growth. So that's the -- some of the points I want to add on Donghao's answer.

正如我之前提到的，口紅－Biolip口紅（技術難度）幫助品牌恢復了成長勢頭，同時也提高了品牌的毛利率。然後對於我們的其他臨床和護膚品牌，我們推出了一些新產品，我們也很高興看到這些產品的早期成果，這將為我們未來的永續成長提供一些基礎。這就是我想對東浩的回答補充的一些觀點。

And that concludes the question-and-answer session. I would like to turn the conference back over to Irene for any closing remarks.

問答環節到此結束。我想將會議交還給艾琳，請她做最後發言。

Thank you once again for joining us today. If you have any further questions, please feel free to contact us at Yatsen directly or the Piacente Financial Communications. Our contact information for IR in both China and the US can be found in today's press release. Thank you, and have a great day.

再次感謝您今天的參與。如果您還有任何其他問題，請隨時直接聯絡 Yatsen 或 Piacente Financial Communications。您可在今天的新聞稿中找到我們在中國和美國 IR 的聯絡資訊。謝謝您，祝您有愉快的一天。

The conference has now concluded. Thank you for attending. You may now disconnect.

會議現已結束。感謝您的參加。您現在可以斷開連線。