Shenzhen's IPO is approved! Under multiple risks, the sellers in the industry reacted in a surprisingly consistent manner

When a company grows to a certain size, it will often complete its capitalization process by going public. However, the road to going public is not always smooth.

Suntech, dubbed one of the "Four Heavenly Kings of South China City" by the industry , has finally taken another step forward after experiencing twists and turns in its IPO sprint.

On May 10, the China Securities Regulatory Commission approved the registration application of LDK Technologies Co., Ltd. to be listed on the Growth Enterprise Market.

Public information shows that Saiwei Times expects to raise 622 million yuan this time, of which 165 million yuan will be used for the fashion industry supply chain and operation center system construction project, 60.1569 million yuan will be used for logistics and warehousing upgrade construction projects, 87.7067 million yuan will be used for brand building and channel promotion projects, and 280 million yuan will be used to supplement working capital.

Savi's IPO road is full of difficulties

It is understood that Savi Technology Co., Ltd. (hereinafter referred to as Savi) was established in 2012 and is headquartered in Shenzhen. Its sales platforms include third-party e-commerce platforms such as Amazon, eBay, Walmart , and Wish , as well as vertical category self-operated websites such as SHESHOW and Retro Stage . Its business scope mainly includes clothing accessories, department stores and home furnishings, sports and entertainment, digital automobiles and motorcycles, etc. At the same time, the company also provides logistics services to third parties based on its perfect cross-border warehousing and logistics system.

In view of its long-term development plan, Suntech terminated its listing on the New Third Board in 2018, and its application for the first submission of a prospectus was accepted in December 2020. However, its review was subsequently suspended three times due to reasons such as financial data updates .

After four rounds of inquiries from the Shenzhen Stock Exchange Listing Committee, Suntech officially passed the Shenzhen Stock Exchange's review on June 17, 2022 .

On August 27, 2022 , Suntech submitted its registration to the China Securities Regulatory Commission.

Recently, Suntech Power's registration application for listing on the ChiNext was finally approved.

According to the prospectus information released by Savi , Savi 's revenue in 2022 was 4.909 billion yuan, a decrease of 11.78% compared with 5.565 billion yuan in 2021 ; Savi's net profit in 2022 was 185 million yuan, a decrease of 46.84% compared with 348 million yuan in 2021.

From 2020 to 2022, the revenue of Savi Times was 5.253 billion yuan, 5.565 billion yuan, and 4.909 billion yuan , respectively, with a significant decline from 2022; the net profit was 451 million yuan, 348 million yuan, and 185 million yuan, respectively, declining year by year, especially in 2022, the decline in Savi's net profit was quite high, reaching nearly 50%.

In addition, in 2022, the net profit attributable to the parent company 's shareholders of Suntech Power and the net profit attributable to the parent company 's shareholders after deducting non-recurring gains and losses both showed a significant decline, down 46.76% and 46.26% respectively .

Regarding the reasons for the significant decline in the company's net profit, Savi Times stated in its prospectus that the company's operating performance fluctuated to a certain extent due to unfavorable factors such as rising international logistics prices, the decline in overseas online consumption peaks, and foreign exchange rate fluctuations. At the same time, the company's operations were also affected by the intensification of Sino-US trade frictions, the high concentration of Amazon's platform, inventory management, tax supervision, store closures , etc.

Savi Times' revenue mainly comes from overseas markets , with overseas sales revenue accounting for a considerable proportion.

From 2020 to 2022, Savi's overseas revenues were 4.922 billion yuan, 5.328 billion yuan and 4.750 billion yuan , accounting for 93.72%, 95.80% and 96.97% of its operating income, respectively . Overseas revenues mainly come from North America and Europe, with sales in North America accounting for more than 80%.

From a business perspective, Savi Times' two major revenue segments are product sales and logistics services .

In 2022, Savi's revenue from merchandise sales was 4.75 billion yuan, accounting for 97.07% , and its revenue from logistics services was 143 million yuan, accounting for 2.93%.

From the perspective of specific categories of commodity sales, in 2022, Savi's revenue from clothing and accessories was 3.3 billion yuan, accounting for 67.40%; the revenue from department stores and home furnishings was 632 million yuan, accounting for 12.92%; the revenue from sports and entertainment was 737 million yuan, accounting for 15.06%; the revenue from digital automobiles and motorcycles was 82.4283 million yuan, accounting for 1.68%.

In addition to the digital automobile and motorcycle categories, the sales revenue of other product categories of Savi will exceed 100 million yuan in 2022. The reason why Savi's products are widely welcomed in overseas markets is directly related to its brand matrix.

At present, Savi has 63 private brands with revenue exceeding 10 million yuan , accounting for 88.07% of the company's merchandise sales revenue in 2022. Among them, there are 21 brands with revenue exceeding 100 million yuan, including homewear brand Ekouaer, menswear brand Coofandy, underwear brand Avidlove, sports equipment brand ANCHEER , etc.

For clothing alone, Savi has laid out four subcategories : women's clothing, home wear, men's clothing, and functional clothing, and has created many well-known brands, such as women's clothing brands RETRO STAGE, zeagoo, SHESHOW , and home wear and pajamas-based brands HOTOUCH and Ekouaer .

Relying on the brand extension effect, Savi has created many popular products on the Amazon platform, and Savi brand products have been on the Amazon BS list many times.

Savi still faces multiple risk factors, and the responses of sellers in the industry are surprisingly consistent!

However, it should be noted that Savi's high dependence on the Amazon platform also brings certain potential risks to the company's operations.

From 2020 to 2023, Savitech's sales on the Amazon platform were 1.967 billion yuan, 3.682 billion yuan, 4.759 billion yuan and 1.945 billion yuan, accounting for 68.33%, 70.12%, 85.55% and 88.79% of its main business income, respectively. It can be seen that the proportion of Savitech's revenue on Amazon has been increasing year by year.

As we all know, Amazon has very strict supervision over sellers on its platform. Once an account is deactivated due to violations, it is very likely that all accounts will be affected.

In Savitech's prospectus, it also mentioned that the high concentration on the Amazon platform is also an important factor affecting the company's operations.

In addition to being highly dependent on Amazon, Savitech's investment in research and development is also quite insufficient.

In terms of R&D investment, Savitech's R&D investment is less than 1% of its annual revenue.

From 2020 to 2022, the proportion of R&D investment of LDK to operating income was 0.63%, 0.65% and 0.97% respectively. The R&D investment of LDK is far different from that of its peers. Anker Innovation, the industry leader , invested 1.08 billion yuan in R&D in 2022 alone , accounting for 7.57% of its operating income, which is nearly 8 times that of LDK.

Regarding the approval of Suntech’s IPO , the editor interviewed sellers in the same industry.

A seller in Shenzhen said that although Savi is a well-known seller, its ability to continue operating is still questionable based on the current economic environment and international situation. Affected by changes in the foreign trade environment, Savi's risk resistance is also declining, and the company's continued operation has been challenged to a certain extent. And as a popular seller, Savi has benefited from the early cross-border dividends, and the company's business has expanded rapidly. However, it is very insufficient in R&D, unlike Anker Innovations, which has its own professional R&D team.

Several other sellers also hold the same attitude towards the approval of Suntech's IPO.

In short, the IPO of SDIC will finally face its final result. What kind of report card can SDIC deliver in the future? Let us wait and see.

IPO

Savi