Short Interest & Thesis

Short Interest & Thesis

Official short-interest position data for the YSG ADRs is not staged in this run — the data step ran in partial status, flagging that no deterministic public short-interest source is configured for this market and that staging produced zero rows for reported short interest, short-sale volume, public net-short disclosures, borrow pressure, and peer context. Without those numbers, no defensible statement about reported positioning, days-to-cover, or borrow tightness is available. What is decision-useful is the thesis substance the primary record itself surfaces: Yatsen explicitly carries a "Techniques employed by short sellers may drive down the market price of our ADSs" risk factor [1], it has twice been below the NYSE US$1.00 minimum-bid threshold and cured both times — most recently by changing its ADR ratio [2], it is a VIE-structured China issuer under HFCAA [3], the ADRs have lost roughly 96% of value since IPO, and a US$120 million convertible-notes + warrants deal signed March 11, 2026 with a related-party purchaser is now creating a fresh dilution and governance overhang [4]. For a PM, the right read is: positioning is unmeasured, but thesis risk is structurally elevated and the institutional float is small, so this is a "thesis-driven, not crowding-driven" short setup.

Data quality and source classification

The classification guardrail printed in the staged latest.json reinforces that any later-arriving short-sale-volume series must not be used as a substitute for reported short interest; this page does not assume any positioning level.

The price tape — context for any short setup

The ADRs are down roughly 96% from the November 2020 IPO debut at $92, and trade near the recent 52-week low of $2.15. Importantly the chart is not split-adjusted on a like-for-like basis: the company changed the ADR-to-ordinary ratio from 1 ADS = 4 Class A to 1 ADS = 20 Class A effective March 18, 2024 [5], a 5× quasi-reverse split executed explicitly to cure NYSE minimum-bid non-compliance [2]. On an unadjusted, pre-ratio basis the equity has effectively been a sub-$1 stub for most of its public life. A 90-day ADV of ~152k ADS at ~$3 equals roughly US$0.5 million of dollar-volume per day — institutional liquidity is thin, and any non-trivial short position would be slow to build or cover.

The disclosed short-thesis ledger

No public short-seller report is indexed in the corpus and the only securities class action against the company — Maeshiro v. Yatsen Holding Limited (S.D.N.Y., No. 1:22-cv-08165), challenging the November 2020 IPO disclosures — was dismissed with prejudice in July 2025 with no appeal [6]. The thesis ledger below is therefore framed not from external campaigns but from issues the company itself has placed in its principal-risk summary, the disclosure that proves the issue, and the company's own framing.

Each row is anchored to a primary-record page: short sellers as a risk-factor class [1]; VIE-structure consequences ("ADSs may decline significantly in value or become worthless") summarised in the principal-risk block [7]; HFCAA / PCAOB history [3]; the two NYSE non-compliance episodes and the cure mechanics [2]; the net-loss history [8] and negative-operating-cash-flow disclosure [4]; the new convertible-note/warrant deal and shareholder objection [4]; the dual-class voting concentration [9]; and the cash-flow dependency on PRC intercompany flows [10]. The same short-seller risk factor existed verbatim in the FY2024 20-F, so this is not a new disclosure [11].

Capital-structure stress — the substance shorts would lean on

The accumulated deficit of RMB8,141.5 million (US$1.16 billion) at 2025YE is itself disclosed on the consolidated balance sheet [12] — the equity has been net-loss-making every reported year. 2025 is a meaningful turn (net loss narrowed to RMB92.4M; non-GAAP net income of RMB8.4M for the full year; Q4 was GAAP-positive) [13], but cash and short-term investments fell to RMB1.05 billion (US$150.7M) at 2025YE from RMB1.36 billion a year earlier [14] — the same balance-sheet drain that motivated the new convertible-note financing. The 40.2 million ADSs / US$202.2 million repurchased through February 28, 2026 (under the 2021-program-as-amended plus the May 2025 US$30M program) [15] tightened the float against the same cash pool.

The single most current piece of capital-structure news is the March 11, 2026 Note Purchase Agreement: US$120 million of RMB-denominated convertible senior notes in two equal tranches plus warrants on Class A shares, with Polaris Veritas Investment Limited (affiliated with Trustar Capital and CEO Jinfeng Huang) as purchaser [4]; the underlying agreement is the convertible note purchase agreement signed with Polaris Veritas [16]. The 10-K then discloses that a "significant shareholder" of Yatsen has formally objected to, and sought to participate in, that transaction, and that the company is in active communications with both parties [4]. Management confirmed on the Q1 FY2026 call that the private placement of convertible notes and warrants completed on May 21, 2026 with new institutional participation [17]. The net read: this is a related-party-tinged, contested, dilutive financing on a stub-equity that is the exact pattern short-thesis writers tend to attack — but the 10-K disclosure path is at least clean.

Float, ADV and what crowding would look like

As of December 31, 2025 there were 1,276,663,163 Class A and 600,572,880 Class B ordinary shares outstanding (total 1,877,236,043; ADS-equivalents ≈ 93.9 million) [18], with another 819,865,720 Class A shares held in treasury or reserved for awards (effectively out of the float) [19]. Founder/CEO Jinfeng Huang beneficially owns 34.3% of total ordinary shares and controls 90.7% of voting power [19], so the non-insider float is ~61.7 million ADS-equivalents and 90-day ADV is ~152k ADS. The arithmetic alone says that without staged short interest no "days-to-cover" number is defensible, but the corresponding orders of magnitude — sub-100M ADS-equivalent float, ~$0.5M/day of dollar-volume — mean any non-trivial outright short position would mechanically take a long time to cover into this tape. That is a positioning risk PMs should size for, even though we cannot quantify the actual short-interest level today.

What is not in evidence — and the limitations that matter

Bottom-line PM read

For an institutional book, the right framing is:

Positioning is unmeasured. Thesis substance is structurally elevated but already extensively priced — the ADRs are a stub-equity that has lost ~96% of value since IPO and trades at a price level only sustained by a 5× ADR-ratio change executed to cure NYSE minimum-bid notices. The next catalyst the page can identify is the closing impact and shareholder-litigation risk around the contested March 2026 Trustar/Huang convertible-note + warrants placement, not a public short campaign.

A change-of-mind on this page would come from any of: (i) a staged reported-short-interest series showing % float materially above peers; (ii) a credible new short-seller report against YSG specifically; (iii) renewed NYSE minimum-bid non-compliance or a PCAOB access reversal; (iv) shareholder litigation around the new convertible-note placement; or (v) borrow fee / utilization data indicating hard-to-borrow status.

References

1. Yatsen Holding Limited — FY2025 Annual Report (Form 20-F), Item 3.D Risk Factors — "Techniques employed by short sellers" — p.70
2. Yatsen Holding Limited — FY2025 Annual Report (Form 20-F), Item 3.D Risk Factors — NYSE minimum-bid non-compliance history — p.67
3. Yatsen Holding Limited — FY2025 Annual Report (Form 20-F), Item 3.D Risk Factors — HFCAA / PCAOB inspection history — p.57
4. Yatsen Holding Limited — FY2025 Annual Report (Form 20-F), Item 3.D Risk Factors — negative operating cash flow and March 11, 2026 Trustar/Huang convertible-note + warrants agreement and shareholder objection — p.40
5. Yatsen Holding Limited — FY2025 Annual Report (Form 20-F), Cover page — share count and ADS-to-Class-A ratio change effective March 18, 2024 — p.1
6. Yatsen Holding Limited — FY2025 Annual Report (Form 20-F), Item 8.A Legal Proceedings — Maeshiro v. Yatsen Holding Limited dismissed with prejudice July 2025 — p.149
7. Yatsen Holding Limited — FY2025 Annual Report (Form 20-F), Item 3.D Risk Factors — Summary of risk factors, China / VIE / HFCAA bullets — p.19
8. Yatsen Holding Limited — FY2025 Annual Report (Form 20-F), Item 3.D Risk Factors — "We have a history of net losses" with 2023-2025 net-loss and operating-cash-flow series — p.23
9. Yatsen Holding Limited — FY2025 Annual Report (Form 20-F), Item 3.D Risk Factors — dual-class voting structure and founder concentration — p.69
10. Yatsen Holding Limited — FY2025 Annual Report (Form 20-F), Item 3 Key Information — cash flow dependence on PRC subs / VIE — p.10
11. Yatsen Holding Limited — FY2024 Annual Report (Form 20-F), Item 3.D Risk Factors — recurring short-seller risk factor — p.70
12. Yatsen Holding Limited — FY2025 Annual Report (Form 20-F), Consolidated Balance Sheet — share-count, treasury, accumulated deficit at 2025YE — p.183
13. Yatsen Holding Limited — Q4 FY2025 results press release, Full-Year 2025 Financial Results — p.4
14. Yatsen Holding Limited — Q4 FY2025 results press release, Balance Sheet and Cash Flow — p.4
15. Yatsen Holding Limited — FY2025 Annual Report (Form 20-F), Item 16E Purchases of Equity Securities — cumulative US$202.2M repurchase total and May 2025 US$30M program — p.172
16. Yatsen Holding Limited — FY2025 Annual Report (Form 20-F), Exhibit — Convertible Note Purchase Agreement dated March 11, 2026 with Polaris Veritas Investment Limited — p.261
17. Yatsen Holding Limited — Q1 FY2026 Earnings Call Transcript, Financing update on convertible-notes private placement closing May 21, 2026 — p.3
18. Yatsen Holding Limited — FY2025 Annual Report (Form 20-F), Cover page — total ordinary shares outstanding at 2025YE — p.1
19. Yatsen Holding Limited — FY2025 Annual Report (Form 20-F), Item 6.E Share Ownership — beneficial ownership table and treasury share carve-out — p.144