Another big seller is coming to market!

With the improvement of network and communication facilities and the penetration of smart home concepts, consumers' demand for remote video monitoring and care is increasing. Especially in developed countries such as Europe and the United States, where single-family houses are the main type of housing, home video monitoring equipment has become a rigid demand.

Under such circumstances, home video surveillance companies have also experienced rapid development in recent years. Recently, Shenzhen Ruilian Technology Co., Ltd. disclosed its prospectus and plans to issue and list on the Shenzhen Stock Exchange.

With annual revenue exceeding 1.3 billion, Ruilian Technology is aiming for listing!

Shenzhen Ruilian Technology Co., Ltd. is an enterprise engaged in the research and development, production and sales of home video surveillance product hardware and software. Its products use online platforms as the main sales channel, focusing on overseas consumer markets. In 2021, Ruilian Technology's overseas sales accounted for as high as 99.87%.

Among them, Reolink, an independent brand under Ruilian Technology , has become the leading home video surveillance brand on the Amazon platform. The store has more than a thousand reviews on multiple links, and consumers' overall evaluation of the product is also very good.

Ruilian Technology was founded in 2009. With the rapid development of the industry, its revenue scale has also shown a rapid growth trend. From 2019 to 2021, Ruilian Technology's operating income was 525 million yuan, 960 million yuan, and 1.367 billion yuan, respectively, and its net profit was 40.72 million yuan, 185.8 million yuan, and 248.6 million yuan, respectively.

In 2020 and 2021, its operating income increased by 83.02% and 42.41% respectively, and its net profit increased by as much as 356.18% and 33.80%.

In terms of 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 2021, the operating income achieved by stand-alone cameras was RMB 329.63 million, RMB 567.70 million and RMB 847.82 million, respectively, accounting for 62.84%, 59.13% and 62.01% of the main business income, respectively.

In terms of sales channels, Ruilian Technology mainly uses online channels such as Amazon, brand official websites, eBay, and AliExpress. In 2021, the above four channels accounted for 63.80%, 20.02%, 3.48%, and 2.51% of the total sales, respectively.

As Amazon's influence expands globally, the platform is becoming Ruilian Technology's most important sales channel. In the past three years, its Amazon sales have accounted for more than 60%.

In recent years, Amazon's platform regulatory policies have become increasingly stringent, and the high concentration of Ruilian Technology's sales on the Amazon platform may not be a good thing. If Amazon's global market share decreases, or Amazon's policies are adjusted to the disadvantage of Ruilian Technology, it will have a negative impact on Ruilian Technology's operations.

As Ruilian Technology's sales scale continues to expand, the scale of its inventory is also increasing. In order to ensure the timeliness of product supply, Ruilian Technology mainly purchases inventory in Amazon FBA warehouses and third-party overseas warehouses. As of the end of 2021, the net book value of Ruilian Technology's inventory was 411.3435 million yuan, accounting for 71.74% of the total assets at the end of the period, and there is a large inventory management risk.

However, thanks to the continued increase in demand in the home video surveillance market, the future prospects of Ruilian Technology are still very bright.

The demand for home video surveillance in Europe and the United States is rising, and the market prospects are promising

Reolink is mainly engaged in the research and development, production and sales of its own brand "Reolink" home video surveillance products, which belong to the computer, communication and other electronic equipment manufacturing industry. Online platforms are Reolink's main sales channel, and its products are mainly aimed at overseas consumer markets.

High crime rates have long been one of the main social problems in European and American countries. Many areas in these countries have low population density, and the living environment is mainly single-family houses. Most families have front and back yards and large open areas, so family safety protection is particularly important.

At the same time, the local population is also aging, and under the combined influence of these factors, the demand for remote video monitoring and care is increasing. According to a survey report by Strategy Analytics, in countries such as the United Kingdom, the United States, Germany, and France, nearly one-third of households have home cameras installed; and among these households that have installed home cameras, 60% of users have two or more home cameras.

One of the characteristics of home video surveillance is networking, and users can realize remote real-time monitoring needs through mobile APP. In Europe and the United States, the Internet development started early, the network penetration rate and coverage rate are relatively high, and the continuous development of communication facilities has further promoted the transmission and presentation effect of video surveillance equipment.

At the same time, the digitization and intelligence of home electronic products have also deepened in recent years. Various smart home products are interconnected to create a smart home environment. Home video surveillance can also be expanded through wired or wireless protocols to access IoT devices such as smart sockets, smart doorbells, smart appliances, access control, smoke sensors and alarms, making the monitoring scene richer.

According to Statista Digital Market Outlook data, as of 2020, the global household penetration rate of smart security products is less than 15%, and is mainly concentrated in Europe and the United States. With the continuous development of smart home and smart home concepts, and the continuous enrichment of related products, home video surveillance, as one of the entrances to the whole house smart home system, its market demand will continue to increase.

Image source: Smart Home Security Report 2021

As the main representative of home video surveillance products, the market size of home cameras has continued to grow in the past decade. According to data released by iResearch Consulting, the global shipment of home cameras in 2020 was 88.89 million units, and the global market CAGR is expected to be 19.3% from 2020 to 2025, exceeding 200 million units in 2025; the global home camera market size in 2020 was 37.3 billion yuan, and the market size CAGR is expected to be 14.1% from 2020 to 2025, exceeding 70 billion yuan in 2025.

Moreover, based on the current market situation, the market brands of home cameras include offline brand products that were developed mainly through offline channel marketing and offline advertising in the early days, as well as online brands that have developed rapidly with online channel marketing and online advertising.

Online brands are generally young, fashionable, and personalized, and have become the first choice for more and more young consumer groups. At the same time, the increase in e-commerce shopping activities catalyzed by the epidemic has also driven the growth of sales of home video surveillance products to a certain extent.

However, home video surveillance is a technology-intensive industry after all, which involves technical issues such as product software and hardware system development, audio and video processing, data storage and network communication. These technologies play an important role in the future high-definition imaging and product intelligence.

Ruilian's attempt to go public is a good development opportunity for itself. However, the industry is generally in a rapid development stage, with many market participants and fierce competition. Ruilian will continue to deepen its presence in this segment and continue to conduct technological research and development and innovation.

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