Sprinting for the first stock! Cross-border IPO successfully passed the review

The camping economy has driven the popularity of outdoor products. Compared with the domestic market, people in Europe and the United States have a stable and high demand for outdoor products.

With the popularity of outdoor products, sellers in this industry have also ushered in rapid development, and some sellers have begun the road to capitalization.

Duyuan Outdoor's IPO successfully passed the Shenzhen Stock Exchange review

On June 16, the IPO project of Xiamen Duyuan Outdoor Products Co., Ltd. (hereinafter referred to as "Duyuan Outdoor") successfully passed the review meeting of the Shenzhen Stock Exchange Listing Review Committee, moving one step closer to listing.

If Duyuan Outdoor's listing is successful, it will become the "first stock in RVs and yachts."

Duyuan Outdoor plans to issue no more than 10 million shares on the Shenzhen Stock Exchange's Growth Enterprise Market. Based on the upper limit of this issuance, the shares issued this time will account for no less than 25% of the total share capital after issuance. It plans to raise 463 million yuan, of which 250 million yuan will be used for the expansion of water sports equipment and RV and yacht supporting products, 148 million yuan will be used for the upgrade and construction of the R&D center, and 65 million yuan will be used to supplement working capital.

However, Duyuan Outdoor's road to IPO has been full of twists and turns.

On June 8, 2022, Duyuan Outdoor's GEM listing application was accepted.

On July 1, 2022, Duyuan Outdoor's GEM listing entered the inquiry stage.

To date, Duyuan Outdoor has undergone three rounds of review inquiries, and the Shenzhen Stock Exchange has always had doubts about its GEM positioning.

At the end of March 2023, Duyuan Outdoor’s listing review was suspended by the Shenzhen Stock Exchange due to outdated financial data.

On April 10, 2023, Duyuan Outdoor was "unlocked" after submitting the latest financial information.

On April 26, 2023, Duyuan Outdoor’s first GEM IPO was reviewed and the review result was to suspend the review. Its performance, equity, positioning attributes, etc. were questioned by regulators and the market.

On June 16, 2023, Duyuan Outdoor’s second GEM IPO was reviewed and approved.

Duyuan Outdoor was established in 2012 and is registered in Xiamen, Fujian Province. It is mainly engaged in the research and development, design, production and sales of RV and yacht supporting products and water leisure sports products. Its products have been exported to more than 100 countries and regions around the world, mainly distributed in North America, Oceania and Europe.

Its RV and yacht supporting products are mainly small and micro water pumps, and others include portable oil barrels, yacht and RV special toilets and other products; water leisure sports products mainly include kayaks and paddle boards, and others include oars and other supporting products.

At present, the company has established good cooperation with large supermarkets such as Anaconda, Super Retail Group, and Birgma; RV and yacht manufacturers such as Lippert, Rongcheng Compass, and SAIC Maxus; dealers such as Seaflo Marine and Sea River; and well-known brands such as Alfred Kärcher and KD, and has a stable source of overseas income.

At the same time, its own-brand sales have opened up in overseas markets, and its brand Seaflo has long been among the best sellers of marine water pumps on Amazon in the United States.

In addition, Duyuan Outdoor's own-brand Seaflo micro water pumps have entered the supply chain systems of mainstream global RV and yacht manufacturers such as Thor (the world's largest RV manufacturer), Forest River (the second largest RV manufacturer in North America), Winnebago (the third largest RV manufacturer in North America), Beneteau (Europe's largest boat manufacturer), and White River (the world's largest manufacturer of recreational boats and fishing boats).

Revenue and net profit decline, Duyuan Outdoor faces multiple risk factors

It is worth noting that Duyuan Outdoor 's revenue and net profit both declined in 2022, which raised regulatory doubts about its growth potential.

According to the prospectus of Duyuan Outdoor, from 2020 to 2022, Duyuan Outdoor's operating income was approximately RMB 193 million, RMB 352 million, and RMB 310 million, respectively, and its net profit was approximately RMB 53.02 million, RMB 75.53 million, and RMB 70.60 million, respectively. The non-net profit attributable to shareholders was approximately RMB 51.45 million, RMB 70.09 million, and RMB 60.42 million, respectively.

From the above information, it can be seen that Duyuan Outdoor's performance showed a significant decline in 2022, with revenue down about 11.89% year-on-year and net profit attributable to shareholders after deducting non-recurring items down about 13.80%.

Regarding the reasons for the decline in the company's performance in 2022, Duyuan Outdoor explained in its first round of inquiries to the Shenzhen Stock Exchange that in 2022, due to unfavorable factors such as the turbulent international situation and inflation, consumer demand was weak, resulting in fluctuations in the company's operating income and other performance indicators.

From this, it can be seen that Duyuan Outdoor's revenue is greatly affected by overseas markets, and its overseas sales revenue accounts for a relatively high proportion.

From 2020 to 2022, the overseas sales revenue of Duyuan Outdoor's main business was RMB 158 million, RMB 287 million, and RMB 255 million, respectively, accounting for 82.84%, 82.37%, and 82.77% of the total revenue. Among them, the revenue of main business products exported to the United States was RMB 48.3678 million, RMB 67.2452 million, and RMB 59.2096 million, respectively.

Due to its high reliance on overseas revenue, the company also faces multiple risks such as rising shipping costs, changes in export tax rebate policies and the global economic environment.

In terms of equity structure, the company has a strong family flavor.

Lin Xizhen directly holds 53.60% of the company's shares and controls 10% of the company's shares through Liancheng Huili, collectively controlling 63.60% of the company's shares, making him the company's controlling shareholder and actual controller.

Lin Xizhen, the actual controller of Duyuan Outdoor, and his partner Lin Chunnu (direct shareholding) and subsidiary manager (indirect shareholding) Lin Qiuqun are siblings; Lin Xijian is the actual controller's former cousin, and Lin Ledong is the actual controller's cousin's brother-in-law.

In addition, Seaflo Marine, a company controlled by Ye Yaoru, the ex-wife of the actual controller, is the largest customer of Duyuan Outdoor, and its sales revenue accounts for the majority of its overseas market revenue, which has also become a point of doubt by the Shenzhen Stock Exchange. According to the equity structure of Seaflo Marine, Ye Yaoru, the ex-wife of Duyuan Outdoor, the actual controller, holds 19% of the company's shares.

As the largest customer, Duyuan Outdoor's revenue depends to a large extent on Seaflo Marine.

From 2020 to 2022, Duyuan's outdoor sales to Seaflo Marine were RMB 38.2172 million, RMB 48.3195 million and RMB 54.3032 million, respectively, accounting for 75.43%, 76.03% and 77.32% of overseas revenue.

Previously, regulators also asked Duyuan Outdoor to explain the reasons and rationality for the continued increase in sales to Seaflo Marine in an inquiry letter.

In addition to being highly dependent on overseas markets and its first customer, Duyuan Outdoor also has doubts about its R&D expenditure costs.

From 2020 to 2022, Duyuan Outdoor's investment in research and development was 9.2273 million yuan, 13.2424 million yuan, and 13.9511 million yuan, respectively, showing an increasing trend year by year. However, the salaries of employees were 3.6612 million yuan, 5.8505 million yuan, and 6.6444 million yuan, respectively. In these three years, the number of R&D personnel was 27, 40, and 35, respectively. The growth rate was not large, but the salary expenditure almost doubled.

The Shenzhen Stock Exchange questioned the reasons and rationality of the increase in employee salaries in Duyuan Outdoor's R&D expenses, and also had doubts about the authenticity and accuracy of the collection of R&D expenditure costs.

Although Duyuan Outdoor's road to IPO has been full of twists and turns, in recent years, the outdoor sports product track in which Duyuan Outdoor is located has also burst out with unprecedented market potential.

In the future, with the rapid release of global demand for RV yacht accessories and water leisure sports products, the dividends and advantages of this field will become more obvious.

If Duyuan Outdoor is successfully listed this time, it will surely usher in a new round of rapid development opportunities.

IPO

After a meeting