Yatsen Holding Ltd (YSG) 2024 Q4 法說會逐字稿

Ladies and gentlemen, good day, and welcome to the Yatsen fourth quarter and full year 2024 earnings conference call. Today's conference call 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 年第四季和全年財報電話會議。今天的電話會議正在錄音。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 know that 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 Securities Mitigation Reform Act. 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 control and could cost actual results to differ materially from those mentioned in today's press release and this discussion.

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，並旨在符合美國證券緩解改革法案規定的安全港責任規定。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，可能導致實際結果與今天的新聞稿和本次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 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 form of information except as required by law.

有關可能影響逸仙公司業務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形式資訊的任何義務。

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 measure and a reconciliation of GAAP, 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、非 GAAP 財務結果的對照表。

Joining us today on the call from Yatsen Senior Management Team 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.

今天參加逸仙高階管理團隊電話會議的有我們的創辦人、董事長兼執行長黃金峰先生和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, the webcast replay of this conference call will be available on Yatsen's Investor Relations website at ir.yatsenglobal.com. I'll now put the call over to Mr. Jinfeng Huang. Please go ahead, sir,

提醒一下，本次會議正在錄音。此外，本次電話會議的網路重播將在逸仙投資人關係網站ir.yatsenglobal.com上提供。我現在將電話轉給黃金鳳凰先生。先生，請說，

Thank you, Irene. And thank you, everyone, for participating in Yatsen's fourth quarter and a full year 2024 earnings conference call today. I will start with the market overview and our key financial performance, followed by insights into our key strategy initiatives and updates on our brands and products.

謝謝你，艾琳。感謝大家今天參加逸仙公司第四季及2024年全年財報電話會議。我將首先介紹市場概況和我們的主要財務業績，然後介紹我們的主要策略舉措以及我們品牌和產品的最新情況。

China's beauty industry remained subdued over 2024, with beauty sales underperforming the overall retail market. According to the adjusted data published by the National Bureau of Statistics of China, total retail sales of consumer goods grow by 3.8% and 3.5% year over year in the fourth quarter and the full year, respectively.

2024 年，中國美容產業依然低迷，美容銷售表現不如整體零售市場。根據中國國家統計局公佈的調整數據，第四季社會消費品零售總額較去年同期成長3.8%，全年成長3.5%。

In contrast, total beauty retail sales declined 1.5% year over year for the quarter and 1.1% for the full year. Despite these challenges, our total net revenues in the fourth quarter grew by 7.1% year over year in line with our guidance.

相較之下，本季美容零售總額較去年同期下降 1.5%，全年下降 1.1%。儘管面臨這些挑戰，我們第四季的總淨收入仍年增 7.1%，符合我們的預期。

The combined revenues from our three clinical and premium skincare brands including GALANIC, Dr. Wu and Eve Lom achieved year-over-year growth of 3%. Color Cosmetics revenues were up 16.4% for the quarter, primarily driven by the recovery of Perfect Diary.

我們三個臨床及高端護膚品牌（包括 GALANIC、Dr. Wu 和 Eve Lom）的總收入年增了 3%。彩妝收入本季成長 16.4%，主要得益於完美日記的復甦。

Looking at our profitability in the fourth quarter, our growth margin increased to 77.8% from 73.7% in the prior year period, driven by a higher contribution from higher gross margin products. Our net loss margin improved to 33%, representing a significant decrease from 46% -- 46.1% for the prior year period. On a non-GAAP basis, we achieved a net income margin of 9.3%, compared to a non-GAAP net loss margin of 8.7% in the prior year period.

從第四季的獲利能力來看，我們的成長幅度從去年同期的73.7%上升至77.8%，這得益於高毛利率產品貢獻的增加。我們的淨虧損率改善至33％，較去年同期的46％-46.1％大幅下降。根據非公認會計準則，我們實現了 9.3% 的淨收入率，而去年同期的非公認會計準則淨虧損率為 8.7%。

For the full year 2024, total net revenues declined by only 0.6% year over year, indicating stability. Color Cosmetics revenues saw a modest decline of 0.3% year over year. Meanwhile, skincare revenues grew by 0.7%, largely driven by a 5.4% year-over-year increase from our three clinical and premium skincare brands. Revenues from our skincare brands accounted for 41.1% of our 2024 full year total net revenues, reaching a record high.

2024年全年總淨收入年減0.6%，呈現穩定狀態。彩妝收入較去年小幅下降 0.3%。同時，保養品收入成長了0.7%，主要得益於我們三個臨床和高級護膚品牌的年增5.4%。我們護膚品牌的收入占我們2024年全年總淨收入的41.1％，創下歷史新高。

Reflecting our revenue growth, our profitability also improved for the full year, with growth margin increasing from 73.6% to 77.1%. We also achieved our lowest full year net loss and the non-GAAP net loss since 2020. Net loss margin decreased to 20.9% from 22%, while non-GAAP net loss margin improved to 3.8%, down from 8.7% in 2023. Although there is still work ahead, these positive outcomes demonstrated that our strategic transformation is on the right path.

由於收入成長，我們全年獲利能力也有所提高，成長率從 73.6% 上升至 77.1%。我們也實現了2020年以來最低的全年淨虧損和非公認會計準則淨虧損。淨虧損率從 22% 下降至 20.9%，而非 GAAP 淨虧損率則從 2023 年的 8.7% 改善至 3.8%。雖然還有很多工作要做，但這些正面成果顯示我們的策略轉型已經走在正確的道路上。

Our key initiatives under this plan were designed to bolster our brand portfolio and strengthen each brand to holistically drive sustainable growth. Over the past 3 years, we have successfully balanced our revenue mix to support the growth of our skincare brands, fine-tuned the product and the channel mix for our Color Cosmetic brands, and invested in R&D to develop a promising pipeline of new products. In addition, we have implemented effective cost cutting measures and enhanced operating efficiencies.

我們根據該計劃採取的關鍵舉措旨在加強我們的品牌組合，並增強每個品牌的力量，以全面推動永續成長。在過去三年中，我們成功平衡了收入結構，以支持我們的護膚品牌的成長，對彩妝品牌的產品和渠道組合進行了微調，並投資研發以開發一系列有前景的新產品。此外，我們也實施了有效的成本削減措施，提高了營運效率。

Now, I would like to delve a little deeper into our key initiatives. First, we are balancing our revenue mix to support the growth of skincare brands. In the skincare segment, GALANIC continued to deliver solid performance throughout the year. Given by a strong brand equity, effective products, and soft scientific communication, the brand maintains the leading market position of its iconic [#1 VC] serum while launching the [#2 VA] serum.

現在，我想更深入地談談我們的主要舉措。首先，我們平衡收入結構以支持護膚品牌的成長。在護膚品領域，GALANIC 全年持續保持穩健的表現。憑藉強大的品牌資產、有效的產品和柔和的科學溝通，該品牌在推出 [#2 VA] 精華液的同時，保持了其標誌性 [#1 VC] 精華液的領先市場地位。

Additionally, we boosted sales of the excellent [Snow LG] series and the micro mask series. These initiatives received broad industry and consumer acclaim, as evidenced by GALANIC winning the Beauty of the Year awards from Vogue and Elle for its remarkable contributions to skincare innovation.

此外，我們也提升了優秀的[Snow LG]系列和微面膜系列的銷售量。這些舉措獲得了業界和消費者的廣泛讚譽，GALANIC 憑藉其在護膚品創新方面做出的傑出貢獻榮獲《Vogue》和《Elle》雜誌頒發的年度美容大獎便是明證。

Second, we are refining the product and the channel mix for our Color Cosmetic brands. Perfect Diary made significant progress in its strategic transformation in 2024, primarily driven by its refreshed for the lineup. The [bile] essence lipstick and its second-generation version were top performers, achieving leading positions in the 11 festival sales rankings across multiple platforms. The product's innovative design and the formulation received international recognitions, including the MUSE Design Awards and the French Design Awards. We are very encouraged by lipstick success and we leverage the consumer insights and professional expertise and gained during its development to create more exceptional products.

其次，我們正在改進彩妝品牌的產品和通路組合。2024年，完美日記戰略轉型取得重大進展，其中產品陣容的更新功不可沒。【膽汁】精華唇膏及二代表現亮眼，在十一個節日多個平台銷售排行榜中位居前列。該產品的創新設計和配方獲得了國際認可，包括MUSE設計獎和法國設計獎。口紅的成功讓我們深受鼓舞，我們利用在開發過程中獲得的消費者洞察和專業知識來創造更多卓越的產品。

In terms of the channel mix, Perfect Diary achieved revenue growth on the Douyin channel while increasing its revenue contribution from offline distribution channels. Scientific innovation remains a key driver in the growth of both our skincare and Color Cosmetics brands. Our R&D expenses represented 3.2% of total net revenues for the full year 2024, underscoring our commitment to innovation and product development.

通路結構方面，完美日記在抖音通路實現營收成長的同時，增加線下發行通路的營收貢獻。科學創新仍然是我們護膚品和彩妝品牌成長的關鍵驅動力。我們的研發費用佔 2024 年全年總淨收入的 3.2%，突顯了我們對創新和產品開發的承諾。

Notable highlights from 2024 include our third appearance at the IFSCC conference, known as the Nobel Prize for Cosmetics, where we unveil an exclusive pattern for active microecological ingredients in collaboration with [Sun Yatsen] University. In addition, Perfect Diary pioneering anti-aging research and its applications were featured in world leading scientific journals, including Nature Medicine and Science Bulletin.

2024 年值得關注的亮點包括我們第三次出席有化妝品界諾貝爾獎之稱的 IFSCC 會議，在會上我們與中山大學合作揭開了活性微生態成分的獨家模式。此外，完美日記開創性的抗衰老研究及其應用在《自然醫學》和《科學通報》等世界領先的科學期刊上發表。

Dr. Wu's team also worked alongside leading experts to present its research at the National Acne Academic conference, show casting 5 patterns, 4 specialized ingredients, and 11 clinical collaborations. We are confident that these new ingredients and the search and research initiatives will drive deeper product innovation, contributing to our brand's sustainable growth.

吳博士團隊也聯合頂尖專家在全國痤瘡學術會議上展示了其研究成果，展示了5種模式、4種專門成分和11個臨床合作。我們相信，這些新成分以及搜尋和研究措施將推動更深層的產品創新，促進我們品牌的永續發展。

Finally, we remained committed to improve profitability. As mentioned earlier, we have made significant progress in this area. The continuous improvement in gross margins reflects our expertise in product development and the strength of our brand equity.

最後，我們仍然致力於提高獲利能力。正如前面提到的，我們在這一領域取得了重大進展。毛利率的持續提高反映了我們在產品開發方面的專業知識和品牌資產的實力。

We optimized marketing expenditures and streamlined general and administrative expenses. Additionally, our expansion into offline distribution channels, which typically require fewer traffic expenses, contributed to improve the profitability. Moving forward, we will continue to enhance operational efficiencies and strategically allocate resources to position the company for long-term growth.

我們優化了行銷支出並精簡了一般及行政開支。此外，我們向通常需要較少流量費用的線下分銷管道的擴張也有助於提高獲利能力。展望未來，我們將繼續提高營運效率，策略性地配置資源，為公司的長期成長做好準備。

In summary, 2024 was a year of progress marked by tangible results of our strategic transformation plan. As we move into 2025, we will stay focused on implementing targeted strategies to further enhance our brands and drive sustainable growth.

總而言之，2024 年是我們策略轉型計畫的實際成果進步之年。邁入 2025 年，我們將繼續專注於實施有針對性的策略，進一步提升我們的品牌並推動永續成長。

With that, I will now turn the call over to our CFO, Donghao Yang, to discuss our financial performance. Thank you, everyone.

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。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 RMB amounts and all percentage changes referred 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 fourth quarter of 2024 increased by 7.1% to RMB1.15 billion from RMB1.07 billion for the five-year period. The increase was primarily due to a 16.4% year-over-year increase in net revenues from Color Cosmetics brands.

2024年第四季總淨收入從五年期的10.7億元成長7.1%至11.5億元。成長主要由於彩妝品​​牌淨收入年增16.4%。

Gross profits for the fourth quarter of 2024 increased by 13% to RMB893 million from RMB790.1 million for the prior year period. Gross margin for the fourth quarter of 2024 increased to 77.8% from 73.7% for the prior year period. The increase was primarily driven by an increase in sales of higher gross margin products.

2024年第四季毛利較去年同期的7.901億元成長13%至8.93億元。2024 年第四季的毛利率從去年同期的 73.7% 上升至 77.8%。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 fourth quarter of 2024 decreased by 3.5% to RMB1.28 billion from RMB1.33 billion for the prior year period. As a percentage of total net revenues, total operating expenses for the fourth quarter of 2024 were 111.8% as compared with 124% for the prior year period.

2024年第四季總營業費用較去年同期的13.3億元下降3.5%至12.8億元。作為總淨收入的百分比，2024 年第四季的總營運費用為 111.8%，而去年同期為 124%。

Fulfillment expenses for the fourth quarter of 2024 were RMB63.5 million as compared with RMB62.7 million for the prior periods a percentage of total net revenues fulfillment expenses for the fourth quarter of 2024 decreased to 5.5% from 5.8% 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 年第四季的履行費用為人民幣 6,350 萬元，而前期為人民幣 6,270 萬元，2024 年第四季履行費用佔總淨收入的百分比從去年同期的 5.8% 下降至 5.5%。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 fourth quarter of 2024 were RMB690.6 million as compared with RMB717.4 million for the prior year period. As a percentage of total net revenues, selling and marketing expenses for the fourth quarter of 2024 decreased to 60.1% from 66.9% for the prior year period. The decrease was primarily due to a more strategic marketing spending combined with lower payroll expenses related to selling and marketing personnel.

2024 年第四季的銷售和行銷費用為人民幣 6.906 億元，而去年同期為 7.174 億元。作為總淨收入的百分比，2024 年第四季的銷售和行銷費用從去年同期的 66.9% 下降至 60.1%。下降的主要原因是行銷支出更具策略性，加上與銷售和行銷人員相關的薪資支出降低。

General and administrative expenses in the fourth quarter of 2024 were RMB100.1 million as compared with RMB158.7 million for the prior period. As a percentage of total net revenues, general and administrative expenses for the fourth quarter of 2024 decreased to 8.7% from 14.8% 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年第四季的一般及行政費用為人民幣1.001億元，上期為人民幣1.587億元。作為總淨收入的百分比，2024 年第四季的一般及行政費用從去年同期的 14.8% 下降至 8.7%。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 fourth quarter of 2024 were RMB26.3 million as compared with RMB36.9 million for the prior year period. As a percentage of total net revenues, research and development expenses for the fourth quarter of 2024 decreased to 2.3% from 3.4% for the prior year period. The decrease was primarily attributable to our efforts to maintain research and development expenses at a reasonable level relative to total net revenues.

2024 年第四季研發費用為 2,630 萬元，去年同期為 3,690 萬元。作為總淨收入的百分比，2024 年第四季的研發費用從去年同期的 3.4% 下降至 2.3%。下降主要歸因於我們努力將研發費用維持在相對於總淨收入的合理水準。

Impairment of goodwill for the fourth quarter of 2024 was RMB403.1 million as compared with RMB354 million in the prior period. Impairments recorded in this quarter mainly represent the amount by which the carrying value of the Eve Lom reporting unit exceeded its fair value based on the quantitative goodwill impairment test, primarily due to weaker operating results than expected.

2024年第四季商譽減損為人民幣4.031億元，上期為人民幣3.54億元。本季度記錄的減損主要代表 Eve Lom 報告單位的帳面價值超過其基於定量商譽減損測試的公允價值的金額，這主要是由於經營業績弱於預期。

Loss from operations for the fourth quarter of 2024 was RMB390.7 million as compared with RMB539.6 million for the prior year period. Operating loss margin was 34% as compared with 50.3% for the prior year period.

2024年第四季營業虧損為人民幣3.907億元，去年同期為人民幣5.396億元。營業虧損率為 34%，而去年同期為 50.3%。

Non-GAAP income from operations for the fourth quarter of 2024 was RMB93.2 million as compared with non-GAAP loss from operations of RMB125.9 million for the prior year period. Non-GAAP operating income margin was 8.1% as compared with non-GAAP operating loss margin of 11.7% for the prior year period.

2024年第四季非公認會計準則營業利潤為人民幣9,320萬元，去年同期非公認會計準則營業虧損為人民幣1.259億元。非公認會計準則營業利益率為 8.1%，而去年同期非公認會計準則營業虧損率為 11.7%。

Net loss for the fourth quarter of 2024 was RMB378.8 million as compared with RMB494.5 million for the prior year period. Net loss margin was 33% as compared with 46.1% for the prior year period. Net loss attributable to Yatsen's ordinary shareholders for diluted ADS for the fourth quarter of 2024 was RMB3.98 as compared with RMB4.57 for the prior year period.

2024年第四季淨虧損為人民幣3.788億元，去年同期為人民幣4.945億元。淨虧損率為 33%，而去年同期為 46.1%。2024年第四季歸屬於逸仙普通股股東的稀釋美國存託憑證淨虧損為人民幣3.98元，去年同期為人民幣4.57元。

Non-GAAP net income for the fourth quarter of 2024 was RMB107 million as compared with non-GAAP net loss of RMB93.7million for the prior year period. Non-GAAP net income margin was 9.3% as compared with non-GAAP net loss margin of 8.7% for the prior year period.

2024年第四季非公認會計準則淨收入為人民幣1.07億元，去年同期非公認會計準則淨虧損為9,370萬元。非公認會計準則淨收入率為 9.3%，去年同期非公認會計準則淨虧損率為 8.7%。

Non-GAAP net income attributable to Yatsen's ordinary shareholders for diluted ADS for the fourth quarter of 2024 was RMB0.99 as compared with non-GAAP net loss attributable to Yatsen's ordinary shareholders for diluted ADS of RMB0.84 for the prior year period.

2024年第四季非美國通用會計準則下歸屬於逸仙公司普通股股東的攤薄後美國存託憑證淨利潤為0.99元人民幣，去年同期非美國通用會計準則下歸屬於逸仙公司普通股股東的攤薄後美國存託憑證淨虧損為0.84元人民幣。

Now, I would like to briefly walk you through the highlights of our full year results. Total net revenues for the full year of 2024 decreased by 0.6% to RMB3.39 billion from RMB3.41 billion for the prior year period, primarily attributable to the decline in net revenues from Color Cosmetics brands, partially offset by the increase in net revenues from skincare brands.

現在，我想簡單向大家介紹我們全年業績的亮點。2024年全年淨收入總額較去年同期的34.1億元下降0.6%至33.9億元，主要由於彩妝品​​牌淨收入下降，但護膚品牌淨收入增加部分抵銷了這一下降。

Gross profit for the full year of 2024 increased by 4.1% to RMB2.62 billion from RMB2.51 billion for the prior year period. Gross margin for the full year of 2024 increased to 77.1% from 73.6% for the prior year period. The increase was primarily attributable to increasing sales of higher gross margin products.

2024年全年毛利較去年同期的25.1億元成長4.1%至26.2億元。2024 年全年毛利率從去年同期的 73.6% 上升至 77.1%。成長主要歸因於高毛利率產品銷售的增加。

Loss from operations for the full year of 2024 was RMB824.9 million as compared with RMB913.4 million for the prior year period. Operating loss margins decreased to 24.3% from 26.7% for the prior year period.

2024年全年營業虧損為人民幣8.249億元，去年同期為9.134億元。營業虧損率從去年同期的26.7%下降至24.3%。

Non-GAAP loss from operations for the full year of 2024 was RMB224.3 million as compared with RMB427.5 million for the prior period. Non-GAAP operating loss margins decreased to 6.6% from 12.5% for the prior year period.

2024年全年非公認會計準則營業虧損為人民幣2.243億元，上期為人民幣4.275億元。非公認會計準則營業虧損率從去年同期的 12.5% 下降至 6.6%。

Net loss for the full year of 2024 was RMB710.2 million as compared with RMB750.2 million for the prior year period. Net loss margin decreased to 20.9% from 22% for the prior year period. Net loss attributable to Yatsen's ordinary shareholders for diluted ADS for the full year of 2024 was on RMB6.99 as compared with RMB6.81 for the prior period.

2024年全年淨虧損為人民幣7.102億元，去年同期為人民幣7.502億元。淨虧損率從去年同期的22%下降至20.9%。2024年全年歸屬於逸仙公司普通股股東的稀釋後美國存託憑證淨虧損為6.99元人民幣，去年同期為6.81元。

Non-GAAP net loss for the full year of 2024 was RMB128.2 million as compared with RMB296.1 million for the prior year period. Non-GAAP net loss margins decreased to 3.8% from 8.7% for the prior year period.

2024年全年非公認會計準則淨虧損為人民幣1.282億元，去年同期為人民幣2.961億元。非公認會計準則淨虧損率從去年同期的 8.7% 下降至 3.8%。

Non-GAAP net loss attributable to Yatsen's ordinary shareholders for diluted ADS for the full year of 2024 was RMB1.26 as compared with RMB2.66 for the prior year period. As of December 31, 2024, we had cash, restricted cash and short-term investments of RMB1.36 billion as compared with RMB2.08 billion as of December 31, 2023.

2024年全年歸屬於逸仙普通股股東的非美國通用會計準則攤薄美國存託憑證淨虧損為1.26元人民幣，去年同期為2.66元。截至 2024 年 12 月 31 日，我們的現金、受限現金和短期投資為人民幣 13.6 億元，而截至 2023 年 12 月 31 日為人民幣 20.8 億元。

Net cash generated from operating activities for the fourth quarter of 2024 was RMB202.2 million as compared with RMB90.5 million for the prior year period. Net cash used in operating activities for the full year of 2024 was RMB243.7 million as compared with RMB107.4 million for the prior year period.

2024年第四季經營活動產生的淨現金為人民幣2.022億元，去年同期為人民幣9,050萬元。2024年全年經營活動所用淨現金為人民幣2.437億元，去年同期為人民幣1.074億元。

Looking at our business outlook for the first quarter of 2025, we expect our total net revenues to be between RMB788.8 million and RMB866.2 million, representing a year-over-year increase of approximately 2% to 12%. These forecasts reflect our current and preliminary views on the market and operational conditions, which are subject to change. With that, I would now like to open the call Q&A operator.

展望2025年第一季的業務前景，我們預期總淨收入在人民幣7.888億元至人民幣8.662億元之間，年增約2%至12%。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。說完這些，我現在想開始電話問答環節。

(Operator Instructions)

（操作員指令）

Maggie Huang, CICC.

Maggie Huang，中金公司。

So my first question is that with such a performance in Q4, how should we expect our profitability in 2025? And my second question is about our strategy for different categories because we've seen that in Q4, our Color Cosmetic brands began to grow faster than skincare. So in the future, how will we allocate our resources between Color Cosmetic and skincare and which category will be the more important growth driver in the future?

所以我的第一個問題是，鑑於第四季的如此表現，我們應該如何預期 2025 年的獲利能力？我的第二個問題是關於我們不同類別的策略，因為我們發現在第四季度，我們的彩妝品牌的成長速度開始快於保養品。那麼未來我們將如何在彩妝和護膚之間分配資源，哪個品類將成為未來更重要的成長動力？

Okay. Thanks for the question about the, our, I think the first question is about our profitability guideline. And also, I think one -- there are a couple of things I can share with you is how we view about the market landscape and also what is our competitive edge.

好的。感謝您提出這個問題，我認為第一個問題是關於我們的獲利指南。而且，我認為我可以與你們分享一些事情，那就是我們如何看待市場格局，以及我們的競爭優勢是什麼。

So I think the beauty market looking forward, the headwinds will persist, which means the price competition will be intensified. And the consumer will be more rational in purchase decisions. So looking forward in order to balance the growth and also the profitability, I think it would be very important for us to maintain and even improve the gross margin growth through the brand equity strengthening and also the R&D investment.

因此我認為展望未來美容市場，逆風仍將持續，這意味著價格競爭將會加劇。消費者的購買決策也會更理性。因此，展望未來，為了平衡成長和獲利能力，我認為透過加強品牌資產和加大研發投入來維持甚至提高毛利率成長非常重要。

And then on the other hand, we think that the skincare will be our key stable growth engine. It already contributed over 40% last year, and also, we have a very robust growth for our key brands including GALANIC, Dr. Wu and Eve Lom.

另一方面，我們認為護膚品將成為我們穩定成長的關鍵引擎。去年它貢獻的銷售額已經超過 40%，而且我們的主要品牌包括 GALANIC、Dr. Wu 和 Eve Lom 也實現了非常強勁的成長。

So for Color Cosmetic, right now I think we already demonstrated the transformation for Perfect Diary has gained a tremendous outcome. And then looking forward the high growth, high repeat purchase and also the a very competitive products, you can contribute to a more sustainable growth for our makeup category. So looking forward, so we are going to deliver and also balance the growth and the profitability by enhancing the skincare and makeup growth, at the same time, we are also to improve our operation efficiency.

所以對於彩妝來說，現在我認為我們已經展示了完美日記的轉型已經取得了巨大的成果。然後期待高成長，高重複購買以及極具競爭力的產品，您可以為我們的化妝品類別更永續的成長做出貢獻。展望未來，我們將透過加強護膚品和化妝品的成長來實現並平衡成長和獲利能力，同時，我們也將提高我們的營運效率。

So the second question, talking about the focus on the category and also the brands, we think at this stage, it's super important to focus on the competitive products in the market. So in the past few years, many (inaudible) are very strong and also consistent R&D investments. We have some very high performing products in the market. We will continue to drive those products growth.

第二個問題，談到對品類和品牌的關注，我們認為在現階段，關注市場上的競爭產品非常重要。因此，在過去的幾年裡，許多（聽不清楚）都是非常強勁且持續的研發投資。我們在市場上有一些性能非常高的產品。我們將繼續推動這些產品的成長。

On the other hand, we are launching some new products which has gained a pretty good momentum in the market. For example, we are expanding the GALANIC portfolio from Vitamin C to Vitamin A, and also the facial mask launched by GALANIC has very good growing trend. For Perfect Diary, our lipstick, [bile] lipstick has gained pretty leading positions in the multi-platforms, and now, we are expanding the category from lip to base makeup. And also, we are when we're looking at Dr. Wu, it's a clinical brand, and then we're expanding the benefits space from acne, removing and then to early age anti-aging and also brightening benefit space. So by balancing the skincare and also makeup, so we are going to devote our resources into the fast growing category and also with a long-term sustainability. So, that's our strategy behind on the investment.

另一方面，我們正在推出一些在市場上取得了相當良好勢頭的新產品。例如我們正在將GALANIC的產品組合從維生素C擴展到維生素A，而且GALANIC推出的面膜也有很好的成長趨勢。完美日記方面，我們的口紅，【膽汁】口紅在各大平台已經佔據了比較領先的地位，現在我們正在把品類從唇妝拓展到底妝。此外，當我們關注吳博士時，它是一個臨床品牌，然後我們正在擴大其益處領域，從痤瘡、去除，到早期抗衰老和亮白益處領域。因此，透過平衡護膚和化妝，我們將把資源投入到快速成長的類別中，並實現長期永續發展。這就是我們的投資策略。

And that concludes the question-and-answer session. I would like to turn the conference back over to management for any additional or closing comments.

問答環節到此結束。我想將會議交還給管理層，以便他們發表任何補充或結束評論。

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

再次感謝您今天的參與。如果您還有其他問題，請隨時直接聯絡逸仙。我們的中國和美國投資者關係的聯絡資訊可在今天的新聞評論中找到。謝謝您，祝您有愉快的一天。

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

會議現已結束。感謝您參加今天的演講。您現在可以斷開連線。