United States securities and exchange commission logo
September 14, 2020
Irene Lyu
Vice President of Corporate Finance
Yatsen Holding Ltd
32-35, 38/F, Poly Midtown Plaza
No.23 East Xuanyue Street, Haizhu District
Guangzhou 510330
People s Republic of China
Re: Yatsen Holding Ltd
Draft Registration
Statement on Form F-1
Submitted August
18, 2020
CIK No. 0001819580
Dear Ms. Lyu:
We have reviewed your draft registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so
we may better
understand your disclosure.
Please respond to this letter by providing the requested
information and either submitting
an amended draft registration statement or publicly filing your
registration statement on
EDGAR. If you do not believe our comments apply to your facts and
circumstances or do not
believe an amendment is appropriate, please tell us why in your
response.
After reviewing the information you provide in response to these
comments and your
amended draft registration statement or filed registration statement, we
may have additional
comments.
Draft Registration Statement on Form F-1
Prospectus Summary, page 1
1. Please discuss where
you deem appropriate in your Prospectus Summary that you are a
foreign private issuer
and that you are subject to different filing and disclosure obligations
as compared to domestic
issuers. We note your disclosure on page 75 in this regard.
What we have achieved, page 2
2. Please balance your
discussion regarding your revenue growth with disclosure about your
net profits/losses.
Please also discuss any significant known trends in your revenue (e.g.,
Irene Lyu
FirstName LastNameIrene Lyu
Yatsen Holding Ltd
Comapany 14,
September NameYatsen
2020 Holding Ltd
September
Page 2 14, 2020 Page 2
FirstName LastName
whether you expect the rate of growth to continue). Expand your
discussion throughout
your registration as necessary, including in your Management's
Discussion and Analysis
and Business sections.
Corporate History and Structure, page 6
3. We note that you operate a portion of your business through a variable
interest entity
structure. Please expand your disclosure here to discuss the
significance of your VIE
structure and the risks associated with it.
4. Please revise your graph to indicate where each of your offshore
entities were organized.
We may lose the ability to use and enjoy assets held by our VIE, page 54
5. Please expand your risk factor to discuss what portion of your assets
are held by your VIE.
PRC regulation of loans to and direct investment in PRC entities by offshore
holding companies,
page 61
6. We note that you "may make loans to [y]our PRC subsidiaries and VIE
and its
subsidiaries subject to the approval from or registration with
governmental authorities and
limitation on amount." Please expand your disclosure here, in your Use
of Proceeds
section, and anywhere else you deem appropriate to quantify the amount
that you will be
able to loan or otherwise transfer to your PRC subsidiaries and VIE
and its subsidiaries.
Our dual-class voting structure will limit your ability to influence corporate
matters, page 68
7. Based on your bracketed risk factor here, it appears that you may have
a dual class share
structure. Should you have a dual share class, please prominently
disclose in your
Prospectus Summary the dual class structure and the implications it
may have for
investors.
Capitalization, page 82
8. On page F-45 you noted that total unrecognized compensation expense
relating to the
Founders restricted shares was RMB 233,631 as of December 31, 2019.
As all of these
shares will vest immediately upon the IPO, regardless of the vesting
schedule, please tell
us why this is not reflected as a pro-forma adjustment to your
accumulated deficit in the
capitalization table.
9. We noted that you have issued a significant amount of options to
management and other
key employees which are subject to both service and performance
conditions, with the
performance condition being the occurrence of an initial public
offering. Please tell us
why the share-based compensation related to the awards that have
satisfied the service
condition is not reflected as a pro-forma adjustment to your
accumulated deficit
in the capitalization table.
Irene Lyu
Yatsen Holding Ltd
September 14, 2020
Page 3
In addition, tell us if there are any other performance conditions,
other than the occurrence
of an initial public offering, for options that are subject to both
service and performance
conditions.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Critical Accounting Policies
Fair Value of Options, page 116
10. Please add disclosure that estimates will not be necessary to
determine the fair value of
ordinary shares for new awards once the shares begin trading.
Fair value of ordinary shares, page 117
11. Once you have an estimated offering price or range, please explain to
us how you
determined the fair value of the common stock underlying your equity
issuances and the
reasons for any differences between the recent valuations of your
common stock leading
up to the IPO and the estimated offering price. This information will
help facilitate our
review of your accounting for equity issuances including stock
compensation and
beneficial conversion features. Please discuss with the staff how to
submit your response.
Notes to the Consolidated Financial Statements
Footnote 2 - Significant Accounting Policies
(p) Mezzanine equity, page F-18
12. Please definethe term "qualified initial public offering" that would
cause the automatic
conversion of the Preferred Shares.
General
13. Please supplementally provide us with copies of all written
communications, as defined
in Rule 405 under the Securities Act, that you, or anyone authorized
to do so on your
behalf, present to potential investors in reliance on Section 5(d) of
the Securities Act,
whether or not they retain copies of the communications.
You may contact Gary Newberry at (202) 551-3761 or Sasha Parikh at (202)
551-3627 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Courtney Lindsay at (202) 551-7237 or Celeste Murphy at (202) 551-3257
with any
other questions.
FirstName LastNameIrene Lyu Sincerely,
Comapany NameYatsen Holding Ltd
Division of
Corporation Finance
September 14, 2020 Page 3 Office of Life
Sciences
FirstName LastName