Stock Track | Yatsen Holding Limited (YSG) Plummets 5.32% Amid Ongoing Profitability Challenges in Competitive Beauty Market

Yatsen Holding Limited (YSG), the Chinese beauty company, saw its stock plummet 5.32% in Thursday's trading session, reflecting ongoing concerns about the company's profitability and the challenging landscape of the domestic beauty industry. This sharp decline comes amid mixed financial results and intensifying competition in the Chinese cosmetics market.

According to recent financial reports, Yatsen Holding Limited achieved revenue of 1.92 billion yuan in the first half of 2025, marking a 22.48% year-over-year increase. However, the company continued to struggle with profitability, recording a net loss of 22.97 million yuan. While this represents a narrowed loss compared to the same period last year, it highlights the persistent challenges faced by the company in achieving sustainable profitability.

A representative from Yatsen Holding Limited stated that the group is actively promoting strategic transformation, adhering to an "innovation-driven" growth logic. The company is focusing on optimizing its category structure through R&D innovation and enhancing overall innovation capability and product competitiveness. Despite these efforts, investors seem to remain cautious about the company's ability to turn a profit in the highly competitive beauty market.

The broader context of the Chinese beauty industry adds to the challenges faced by Yatsen. As traffic dividends fade and competition intensifies, many domestic beauty brands are struggling to maintain growth. Industry experts note that the era of high marketing investments yielding substantial returns is coming to an end, forcing companies to seek new strategies for growth. Yatsen's stock price decline may reflect investor concerns about the company's ability to navigate these industry-wide challenges effectively.

As part of its growth strategy, Yatsen Holding Limited is expanding into overseas markets. The company launched its Perfect Diary brand in Southeast Asia in 2020 and has since entered the Japanese and North American markets. However, the effectiveness of this internationalization strategy in driving profitability remains to be seen, potentially contributing to investor uncertainty reflected in the stock's performance.