From starting a business with 100,000 yuan to earning 1.3 billion yuan a year! Shenzhen Dashao IPO successfully passed the review

With the continuous updating and iteration of smart products and the penetration of the smart home concept , there has been an explosion in demand for home video surveillance equipment .

Some domestic sellers that have entered this field have experienced rapid development, and some companies have started the IPO process.

Good news came at the beginning of the year, Ruilian Technology’s IPO was successfully approved!

Recently, the results of the first review meeting of the GEM Listing Committee in 2023 showed that the initial public offering of Shenzhen Ruilian Technology Co., Ltd. (hereinafter referred to as " Ruilian Technology ") met the issuance conditions, listing conditions and information disclosure requirements . The IPO was successfully passed and will soon be listed on the Shenzhen Stock Exchange Main Board.

At the beginning of 2023, good news came that Ruilian Technology successfully passed the IPO review! This also excited the industry and the capital market.

It is reported that Ruilian Technology plans to be listed on the Shenzhen Stock Exchange's Growth Enterprise Market. The number of shares to be publicly issued this time shall not exceed 30.01 million shares ( not less than 25% of the total share capital after issuance ) , with a par value of RMB 1 per share, and the total share capital after issuance shall not exceed 120.01 million shares. There will be no transfer of old shares in this issuance , and all new shares will be issued.

In this IPO, Ruilian Technology plans to raise no more than 1.123 billion yuan, and the funds raised will be used for R&D center upgrade projects, headquarters operation center and information technology upgrade projects, and to supplement working capital. The planned investment amounts are 539 million yuan , 382 million yuan, and 200 million yuan, respectively.

Shenzhen Ruilian Technology Co., Ltd. (hereinafter referred to as Ruilian Technology) was established in 2009 and is mainly engaged in the research and development, production and sales of home video surveillance product hardware and software. Its products are mainly sold through online platforms, focusing on the overseas consumer market.

It is worth mentioning that the founders of Ruilian Technology, Liu Xiaoyu and Wang Aijun, had previously worked at Huawei HiSilicon Semiconductor. After leaving, they founded the company with an initial registered capital of only 100,000 yuan. Now, Ruilian Technology 's annual revenue has reached 1.3 billion yuan.

At present, Ruilian Technology is mainly sold in developed countries and regions such as Europe and the United States through third-party e-commerce platforms such as Amazon, eBay, and AliExpress, as well as its own websites .

According to Ruilian Technology's prospectus , from 2019 to the first half of 2022 , Ruilian Technology's operating income was 524 million yuan, 960 million yuan, 1.367 billion yuan, and 707 million yuan, respectively , and the main business revenue grew very rapidly .

Ruilian Technology said that the reason for the rapid growth of the company's business is that it relies on continuous internal technological innovation and independent brand marketing and promotion. On the other hand , the growth of external terminal market demand has driven product sales. At the same time, the penetration of overseas online consumption habits and the rapid development of cross-border e- commerce sales channels under the background of the new crown epidemic have also driven the company's performance growth .

From the perspective of specific business types, Ruilian Technology's main products include stand-alone cameras, camera sets and accessories. Among them, the sales of stand-alone cameras accounted for the highest proportion. From 2019 to the first half of 2022 , the operating income achieved by stand-alone cameras was RMB 329.63 million, RMB 567.70 million , RMB 847.82 million and RMB 478.09 million , respectively, accounting for 62.84%, 59.13%, 62.01 % and 67.54% of the main business income, respectively .

During the reporting period, the company mainly sold its products through online channels such as Amazon, eBay, AliExpress, and the official website. As the influence of the Amazon platform expands globally, the platform is becoming the main sales channel for Ruilian Technology .

From 2019 to the first half of 2022 , Ruilian Technology's sales on the Amazon platform accounted for 65.00%, 67.90%, 63.80% and 67.06% of the total product sales revenue of the year, respectively, which is a relatively high proportion. At the same time, Amazon's home camera brands Ring and Blink are also Ruilian Technology's main online sales competitors.

At the same time, Ruilian Technology has great advantages in its own brands.

In the early days of Reolink, the company mainly adopted the ODM business model. After 2015, with the development of online channels, Reolink began to change its traditional business model and decided to transform and invest in brand building, creating and incubating its own home security video surveillance technology brand Reolink.

After focusing on brand building, the sales revenue of Ruilian Technology's brand official website has been increasing year by year . From 2019 to the first half of 2022 , the sales revenue of the brand official website was 79.57 million, 140 million, 270 million , and 120 million, respectively, accounting for 15%, 15%, 20 % , and 17% of the total revenue, respectively .

The steady growth of sales performance on the brand's official website is inseparable from Reolink's long-term R&D investment. It is understood that Reolink's R&D personnel account for a quarter of the total employees, and basically a new product is developed every quarter.

At the same time, in order to meet the personalized needs of consumers, Reolink also launched a "cloud subscription service" - Reolink Cloud, with a price range of US$3-10. Although the price is not high, the gross profit has reached more than 40%.

At the same time, Ruilian Technology also pays great attention to offline sales channels.

It is reported that Ruilian Technology's offline sales include self-branded sales and a small amount of ODM sales. In order to promote channel diversification, the company has vigorously expanded offline sales channels by selling self-branded products to local retailers or traders to achieve offline market coverage in target areas. At the same time, based on the coverage of its own brands, the company retains ODM services for individual brand owners to achieve channel complementarity. From 2019 to the first half of 2022 , Ruilian Technology sold its own brands to offline B-end customers such as retailers or traders for RMB 29.1204 million, RMB 79.6976 million, RMB 100.6260 million, and RMB 64.0766 million, respectively, accounting for 5.57%, 8.34%, 7.40%, and 9.10% of the total product sales revenue in the current period, respectively.

Behind the rapid growth of Ruilian Technology's business, there are still risks!

For enterprises, both normal operations and listing involve risks, and the same is true for Ruilian Technology.

First of all, Ruilian Technology’s product sales area is very concentrated , and subsequent operating results may fluctuate with market changes .

During the reporting period, Ruilian Technology focused on the overseas consumer market. From 2019 to the first half of 2022 , the proportion of overseas sales product revenue to the total product sales revenue of the year was 99.93%, 99.99%, 99.87% and 99.98% respectively. The main sales areas include the United States, Europe, etc.

In recent years, with the increasing global trade frictions and geopolitical conflicts, the current market environment has various uncertainties. It cannot be ruled out that the intensified and continued deterioration of trade frictions between overseas countries and China or fluctuations in demand in the target market may have an adverse impact on Ruilian Technology 's business and thus affect its operating performance.

At the same time, Ruilian Technology also faces inventory management risks .

Ruilian Technology usually stocks goods in Amazon FBA warehouses and third-party overseas warehouses to ensure the timely supply of products. However, as the company's sales scale expands, the scale of inventory goods is gradually increasing.

As of June 30, 2022, the net book value of Ruilian Technology's inventory was RMB 479.3467 million, accounting for 64.35% of the total assets at the end of the period, mainly distributed in Amazon FBA warehouses, third-party overseas warehouses, in-transit and domestic warehouses, etc. Ruilian Technology mainly prepares inventory based on market sales forecasts, but if the company's sales are sluggish or declining, it may lead to a slowdown in inventory turnover and increase the occupation of operating funds. If the inventory depreciates, the company will suffer losses.

In general, after going public, Ruilian Technology will have a good development opportunity. Ruilian Technology stated in its prospectus that the company's goal in the future is to become an internationally leading brand of home video surveillance products and technology, and to provide a full range of home video surveillance products to global consumers with its modular home visual system technology innovation platform and efficient independent brand operation platform.

However, if Ruilian Technology wants to achieve long-term development, it is very necessary to continue to increase investment in research and development and carry out technological innovation , while expanding new markets and avoiding inventory management risks.

Shenzhen big seller

After a meeting