Another Shenzhen big seller is about to go public!

Pisen Electronics, a competitor of Anker and UGREEN, is preparing for an IPO. As a company that emerged from Huaqiangbei, Pisen Electronics mainly produces and sells 3C accessories such as chargers and data cables for major brands, with more than 20 million data cables sold in a year.

On Amazon, Pisen Electronics calls itself the inventor of power banks and advertises itself to foreign consumers as the “leader of 3C smart mobile peripheral products.” However, as a predecessor of Anker and UGREEN, Pisen Electronics’ revenue and profits are far behind those of its juniors, and it lags far behind in terms of performance scale and growth rate.

Shenzhen Dama is going public, mainly engaged in charging products and data cables

Recently, Guangdong Pisen Electronics Co., Ltd. (hereinafter referred to as "Pisen Electronics") has submitted a prospectus to the Shenzhen Stock Exchange, intending to be listed on the main board. The sponsor is CITIC Securities, and it is currently in the "accepted" stage. The estimated amount of financing is 757.01 million yuan, which will mainly be used for projects such as the relocation and expansion of production bases, the construction of R&D centers and headquarters offices.

As China's largest electronics market, Huaqiangbei concentrates the latest products and components of world-renowned brands. PISEN Electronics produces three core product series, namely charging series, mobile phone accessories, and innovative electronics, centered around these major brands. Specific products include 3C smart peripheral products such as mobile power banks, chargers, and data cables.

When Pisen Electronics was first established in 2003, it started out as a power bank product. The company is located in Longgang District, where cross-border sellers gather. Its products are sold both domestically and abroad, with 65% of sales online. On Amazon, Pisen Electronics calls itself the "creator of power banks" and has promoted itself as the "leader of 3C smart mobile peripheral products" to overseas consumers.

However, the power bank did not bring huge profits to Pisen Electronics. Instead, the company's series of charging products based on the charging concept accounted for the main revenue of Pisen Electronics.

Chargers are the flagship product of PISEN, and have a high degree of overlap with Anker's main categories. In 2022, this category contributed nearly 60% of the sales of brand electronics, which was 780 million yuan. However, in terms of revenue volume, PISEN Electronics' charging products are far behind Anker, which was established eight years later. In 2022, Anker's charging product revenue was 6.876 billion yuan. Even for UGREEN, which was established in 2011, the revenue of charging products in 2021 was already on par with PISEN Electronics' revenue in 2022.

It can be said that in the charging category, newcomers such as Anker and UGREEN have surpassed PISEN Electronics.

PISEN Electronics does not only have charging products as its trump card. The fiercely competitive "Lucky Three Treasures" products, namely mobile phone cases, tempered glass films and data cables, are also PISEN Electronics' winning magic weapon. It should be noted that the competitive differentiation of such products is extremely small, and it is conceivable that the foundation of sellers who can remain after several years can be imagined.

Among them, the sales volume of data cable products is the most outstanding. In 2020, PISEN Electronics sold 32.33 million data cables. Although the subsequent sales volume has declined, it is still very large. In 2022, the sales volume remained at 24.73 million, and the average unit price also rose from 10.18 yuan in 2020 to 12.07 yuan.

"9.9 data cables, 16.9 fast charging heads, 59 power banks," Pisen Electronics has captured a large number of users with its low-price model. However, later on, because Pisen Electronics' data cables and mobile power banks did not pass Apple's MFi certification, a large number of products in this category were removed from the shelves, and revenue was also greatly affected.

To this end, PISEN Electronics learned from Anker to open up a new growth curve, namely innovative electronic products, including accessories, healthy living, and audio series. In 2022, the revenue of this category was 250 million yuan, accounting for a small proportion of 18.51%. Compared with its peers, the net profit is also relatively low.

The reason behind Anker's revenue being dozens of times higher than that of Pinsen Electronics is the lack of competitiveness

In fact, as early as 2013, PISEN Electronics' revenue had reached 834 million yuan. Its competitors at that time (now the industry leaders), Anker, had just been established for more than a year, and UGREEN had also just been established, but now their revenues are no longer at the same level.

Pisen Electronics' revenue in 2022 was 1.329 billion yuan, while Anker and UGREEN's were 14.251 billion yuan and 3.839 billion yuan respectively. Anker's revenue was already ten times higher than Pisen Electronics, and UGREEN's was nearly three times higher. The three giants seemed to be in a race between the tortoise and the hare, unable to match their speed and size.

The reason behind the new wave overtaking the old giants is their lack of competitiveness.

When Pisen Electronics was first established, it focused on the electronic accessories market. In order to consolidate its market position, Pisen Electronics also invested in O2O, and got involved in shared power banks, electronic product repair and other businesses, and even explored some of its businesses earlier than Anker. However, after several years of twists and turns, Pisen Electronics' new business did not make any breakthroughs, and it returned to electronic product accessories.

Moreover, as the consumer electronics winter continues to spread, global smartphone shipments have declined, and the company's revenue has also declined, and the outlook is not optimistic. At present, PISEN Electronics still mainly relies on online sales channels, with JD.com and other online channels accounting for a large proportion, while Amazon and other online channels account for a relatively small proportion.

On the other hand, Anker, the industry leader, has been investing in cross-border e-commerce channels since its inception, with overseas business accounting for more than 96%. It is positioned as an Internet accessories brand and has been exploring new businesses and increasing its R&D team. The results achieved are also obvious. The revenue scale of the new business has reached 7.213 billion yuan, which has surpassed the charging business.

On the technical level, Pisen Electronics has only 7 invention patents, while Anker has 103 and UGREEN has 12. During 2020-2022, Pisen Electronics' R&D expenses were 44.52 million yuan, 48.04 million yuan and 49.57 million yuan respectively, and the R&D expense rate was always around 4%, which is much lower than the average of its peers.

Moreover, complaints and disputes over quality issues of Pisen Electronics have never ceased. On Heimao Complaints, there are nearly 500 complaints against the Pisen Electronics brand, and the complaints are mainly focused on quality issues, including charger explosions, failures after the expiration date, and backflow of electric lights.

As we all know, the 3C accessories industry has low technical content, fast product iteration, and short repurchase cycle, but due to the large profit margin, it has also attracted a large number of sellers. However, due to the characteristics of the industry, such companies often encounter bottlenecks in their later development, and the company is in urgent need of strategic transformation, and this is also the case with PISEN Electronics.

Although Pisen Electronics has formed a mature supply chain system and perfect online and offline sales channels over the years, compared with its peers, it seems that it still lacks some benchmark products, and the company's R&D and product quality issues also need to be improved. As the company strives to go public, Pisen Electronics still has a long way to go to maintain its position in the most competitive 3C category.

Shenzhen

3C

PISEN Electronics