Liquidity & Technical

Liquidity & Technical

YSG is a sub-$400M ADS with $0.7M of average daily dollar volume, ~6.9% median daily range, and a regime where the founder controls 90.7% of votes while strategic holders own another ~26% of economic interest — so the traded float that a fund can actually source is a small fraction of the headline market cap. The price trades 37% below its 200-day, in a fresh death-cross regime confirmed on 2025-12-08, with a one-month bounce of +36% that is countertrend inside a one-year drawdown of −63.6% and a five-year drawdown of −93.7%. The implementation answer is short: this is a specialist book name, not a sized position, and any constructive view depends on reclaiming $5.00 (the 200-day) before pressing.

Liquidity is the constraint — and the headline ADV overstates it

YSG's 20-day average dollar volume is $0.73M; the 60-day average has been $0.47M. A fund running typical 10–20% participation can absorb only about $378K–$755K of stock over a full five-day window — roughly 0.10–0.20% of market cap. That is enough to initiate a tracking position; it is not enough to size one. Exiting a 1%-of-market-cap holding takes 25 trading days at 20% ADV and 50 days at 10% ADV; a 2% position double those.

Then reconcile against the filing-disclosed float. Yatsen runs a dual-class structure where Class A ordinary shares carry one vote and Class B shares carry twenty votes per share, and each ADS represents twenty Class A ordinary shares [1]. As of February 28, 2026, founder/CEO Jinfeng Huang beneficially owned 643,671,174 ordinary shares (34.3% economic, 90.7% of voting power) via Veritas Vision Holding and Yellow Bee Limited; Hillhouse Entities held 258,521,262 Class A shares (13.8%); ZhenFund Entities held 222,868,921 (11.9%); and directors and executive officers as a group held 38.9% economic and 91.3% voting [2]. NYSE classifies Yatsen as a "controlled company" because the founder holds more than 50% of total voting power [3]. Of 1,276,735,163 Class A and 600,572,880 Class B shares outstanding, founder + Hillhouse + ZhenFund represent ~60% of beneficial economic ownership locked in long-dated strategic hands [2]. The headline ADV is not constrained by absolute share count — it is constrained by the fact that the non-locked float is a fraction of what total ADSs outstanding would suggest.

The structural overhangs on top of that base:

• Buyback that has slowed. The 2021–2025 repurchase programs ran from an initial $100.0M authorization (November 17, 2021) through expansions to $150.0M and $200.0M (August 2022 and November 2023), retiring 40.2 million ADSs for $202.2 million by February 28, 2026 [4]. The replacement program approved May 16, 2025 is only $30.0M over 24 months — a meaningful step down in bid support [4].
• Pending dilutive placement. On March 11, 2026, Yatsen signed a Note Purchase Agreement for RMB-denominated convertible senior notes equivalent to ~US$120 million plus warrants with a purchaser affiliated with Trustar Capital and the founder, in two tranches; a significant shareholder raised objections, the first tranche has not closed, and discussions remain ongoing [5]. A $120M placement is roughly 32% of market cap at the current $377M — material future supply that should be cleared before sizing up.
• Strategic holder selling. Hillhouse held 300,560,602 Class A shares (16.4%) as of February 28, 2025 [6] and 258,521,262 (13.8%) as of February 28, 2026 [2] — a net reduction of ~42 million Class A shares, or roughly 2.1 million ADS-equivalents trimmed over twelve months. That is ~3× the 20-day ADV in ADS terms — an ongoing supply pressure that the recovering buyback cannot fully offset.

Trend and regime — sub-200d, in a fresh death-cross window

The picture is unambiguous. Yatsen listed on the NYSE on November 19, 2020 at the top of the post-COVID China-ADR cycle [7]; price marked an all-time high of $127.35 in early 2021 and has not retraced anywhere near it since. The chart reads as: a long bear from 2021 into 2024, a counter-trend rally from March 2024 lows that peaked above $11 in June–August 2025 (the catalyst was a sharp earnings recovery and short squeeze around Q1 FY2025 results), then a fast collapse from $9 to under $4 in two months on growing supply concerns. The latest confirmation is the 50-day-below-200-day death cross dated 2025-12-08, the third in three years (prior death crosses 2024-07-08 and 2025-02-28 each preceded further weakness, while the 2025-03-19 golden cross did mark the bull leg).

ADS price is dependent on the share ratio: on March 18, 2024, Yatsen effected an ADS ratio change from 1 ADS = 4 Class A shares to 1 ADS = 20 Class A shares — a 5× implicit consolidation undertaken to cure an NYSE listing-price deficiency that ran from November 2, 2023 through April 10, 2024 [7] [1]. The price history above reflects the post-ratio-change basis throughout. The earlier April 2022 NYSE deficiency notice was cured by August 2022 via the share-repurchase support program [7]. Two listing-compliance events in four years frame why the buyback authorization has been such a central instrument of capital policy — and why a step down from $200M cumulative authorization to $30M [4] is technically meaningful.

Volume and sponsorship — episodic, with two negative-day spikes for every positive

Average daily share volume has been drifting lower for two years and is now under 250K ADSs/day. Monthly volume profile shows the structural truth: the post-March-2024 ratio change reset turnover to a thinner base, the June 2025 results-driven rally pulled in 900K+ daily volume for a single month, and the December 2025 capitulation came on roughly 240K average — selling on falling volume rather than a forced liquidation panic.

The volume-spike days reinforce that volume in YSG mostly arrives on bad news. Six of the ten largest volume-spike sessions since 2022 closed with double-digit moves, and four of the six were drops greater than 12%.

The June 2025 cluster (June 9, 10, 11, 25) corresponds to the period in which YSG rallied from the mid-$5s to above $11 — a four-day window of forced re-rating volume that more than doubled the stock and remains the largest sustained positive-volume episode in the series. The episode is not catalysed in the corpus to a single named event; the corpus does not contain a presentation or transcript matched to those exact dates, so I do not attribute the move beyond observing it was the post-Q1 FY2025 results window. The 2023-11-20 13.4× spike with an 18.9% decline maps to the November 2023 NYSE deficiency-notification window [7].

Momentum — flat-to-mildly-positive, but inside a downtrend

After collapsing into a December 2025 low (RSI 26.9, MACD histogram nearly zero), short-term momentum has retraced to neutral: RSI(14) is 52.1, the MACD line ($0.10) sits just above signal ($0.07), and histogram is +0.027 — bullish, but flat. The same posture preceded the April 2026 retracement to $2.91, and the August 2025 momentum reset preceded the October–December collapse. The interpretation is that monthly RSI/MACD have lost their predictive force in this regime; the 50/200 cross dominates.

The trailing-return profile makes the bounce-vs-trend tension explicit:

The realized-volatility regime is the second-order risk. 30-day realized vol is 111.5% — above the 10-year 80th-percentile band of 96%, and well above the 50th percentile of 77%. ATR(14) is $0.30 against a $3.17 price, so a one-σ daily move is roughly 9.5%. For execution this means a 5%-of-position trade can move price more than the trader's spread budget on any given day; for risk management it means a 6-month VaR sized off historical vol will materially exceed standard-cap assumptions.

Relative strength — absolute decline, benchmark series unavailable

The technicals data manifest lists SPY as the intended broad-market benchmark and "no sector ETF" with an empty peer basket; the relative-performance file ships the YSG rebased series but the benchmark series itself is empty, so a literal (YSG − benchmark) curve is not available here. What is available: YSG rebased to 100.0 on 2023-06-30, ending at 64.8 on 2026-06-18 — a 35% absolute decline over the three-year window, with a parabolic round-trip through ~225 in mid-2025. By inspection against any normalized US benchmark in the same window, YSG underperformed materially; the magnitude cannot be quantified from the staged data alone.

Technical scorecard

Stance — bearish, six-month horizon

Verdict: bearish for the next 3–6 months. The price action says what the fundamentals already imply: the rally to $11+ in summer 2025 was a sentiment-driven re-rating that the bond market did not validate (Yatsen had to negotiate a $120M convertible at the founder's own facilitation by March 2026 [5]), the trend regime has reverted to its 2021–2024 default of price below a falling 200-day, and the buyback authorization has stepped down from $200M cumulative to $30M [4] — meaning the marginal bid is weaker than for any of the previous three drawdowns.

Levels to act on:

• Bull invalidation: $5.00 — a daily close above the 200-day SMA, currently at $5.05. This would also clear the broken support of $4.50, the Bollinger upper band ($3.73), and the early-2026 trading range top ($4.45). Reclaiming $5 is the first signal that the death-cross regime has aborted.
• Bear invalidation: $2.15 — the 52-week low. Below that, the next reference is the all-time low at $1.94 (intra-day basis) and a likely retest of the listing-deficiency threshold of $1.00.
• Trigger for any action: the convertible-note closing or its abandonment [5]. Until the Trustar note is resolved, the implied potential dilution (~$120M on a $377M cap) is an unpriceable supply overhang that should keep any sizing under specialist-book limits.

Implementation answer: liquidity is the constraint. The action is avoid for any fund running normal participation limits; watchlist for a specialist book that can transact in negotiated blocks. Even a constructive view of the fundamental turnaround should be expressed via the convertible (if available on equal terms) rather than through tape buying — five-day capacity at 20% ADV is only 0.20% of market cap [2] [4].

References

1. Yatsen Holding Limited — FY2025 Annual Report (Form 20-F), Introduction — ADS ratio and ratio change — p.4
2. Yatsen Holding Limited — FY2025 Annual Report (Form 20-F), Item 6.E Share Ownership / Item 7.A Major Shareholders — p.144
3. Yatsen Holding Limited — FY2025 Annual Report (Form 20-F), Item 3.D Risk Factors — Controlled company — p.70
4. Yatsen Holding Limited — FY2025 Annual Report (Form 20-F), Item 3.D Risk Factors — Share repurchase programs — p.69
5. Yatsen Holding Limited — FY2025 Annual Report (Form 20-F), Item 3.D Risk Factors — March 11, 2026 Note Purchase Agreement with Trustar Capital — p.40
6. Yatsen Holding Limited — FY2024 Annual Report (Form 20-F), Item 6.E Share Ownership — Hillhouse 16.4% — p.145
7. Yatsen Holding Limited — FY2025 Annual Report (Form 20-F), Item 3.D Risk Factors — NYSE continued-listing deficiencies and cures — p.67