Another Shenzhen 3C hot seller is about to be listed!

In recent years, competition in the consumer electronics market has intensified, and many companies have gone public. Recently, the news that Shenzhen 3C seller UGREEN Technology is going public has attracted attention in the industry.

According to information disclosed by the Shenzhen Stock Exchange on June 2, the IPO status of Shenzhen Greenlink Technology Co., Ltd. (hereinafter referred to as "Greenlink Technology") on the Growth Enterprise Market is "accepted". The funds Greenlink Technology intends to raise from this listing on the Growth Enterprise Market are 1.504 billion yuan.

Annual revenue of 3.4 billion, annual sales of 10 million units of five major product series

UGREEN Technology is a company mainly engaged in the research and development, design, production and sales of 3C consumer electronic products. It is located in Shenzhen, a domestic cross-border e-commerce concentration area. Its main products cover five major series: transmission, audio and video, charging, mobile peripherals, and storage. Its products continue to be selected as Amazon's Best Seller and Amazon's Choice, and are at the top of the product lists of many mainstream platforms .

In 2021, the company's sales amounted to 3.44 billion yuan, an increase of about 26% from 2.738 billion yuan in 2020, with an average annual compound growth rate of 29.80%. Although GreenLink's revenue data is relatively optimistic, like most companies that have announced financial reports, the increase in revenue is not accompanied by an increase in profits. The company's net profit in 2021 was 305 million yuan, a slight decrease from 2020.

However, the company's sales revenue from its five major product series is still strong. Among the five major product series, the revenue share of audio and video products and charging products exceeded 20% in 2021. As the company's largest product category, the sales scale of transmission products has always maintained rapid growth. Representative products include USB-C multi-function docking stations, portable wireless keyboards and mice, and three-in-one card readers. In 2021, the sales revenue of transmission products alone reached 1.235 billion yuan, accounting for 35.93% of the total revenue.

In addition, the sales revenue of the two main products, mobile peripheral products and storage products, in 2021 were 332 million yuan and 159 million yuan respectively, which increased slightly compared with the previous year, accounting for 9.66% and 4.63% of the total revenue respectively. According to the prospectus, the total sales volume of the five major product series in 2021 exceeded 87 million units, and the sales volume of transmission and audio and video products was particularly outstanding, reaching 33.1476 million and 20.9797 million units.

Behind the rapid growth of UGREEN Technology's performance, in addition to the support of five major products, its own brand is also an important magic weapon of the company.

Relying on its own brand " UGREEN", the overseas layout is accelerated

Judging from the development progress of UGREEN Technology, the company has been committed to building its own brand since its inception. By creating the "UGREEN" brand, UGREEN Technology has rapidly expanded its business scale and further accelerated the company's entry into overseas platforms. Its products have also continued to be selected as Amazon Best Sellers and ranked at the top of multiple platform lists.

UGREEN Technology's overseas online sales are mainly in the online B2C model , and its overseas sales channels mainly include Amazon, AliExpress, Shopee , Lazada , etc. In 2021, its overseas online sales revenue was 1.414 billion yuan, a year-on-year increase of 17.4%. During the reporting period, UGREEN's overseas online sales revenue showed a year-on-year growth trend.

Judging from the major sales platforms of UGREEN Technology, Amazon is still the company's largest sales channel, and Amazon's revenue source has also been growing year by year. In 2021, UGREEN Technology's sales revenue on Amazon was 1.149 billion yuan, a year-on-year increase of 17.36% (979 million yuan in 2020), accounting for 33.41% of its total online platform revenue.

Compared with the Amazon platform, UGREEN's sales on platforms such as AliExpress and Shopee account for a significantly smaller proportion, only in the single digits.

From the perspective of market layout, the European and American markets are still the main markets for UGREEN Technology, accounting for more than 70% of the total, and the Southeast Asian market is gradually growing. Among the three major markets, Europe has the highest market share. In 2021, the sales of UGREEN Technology's products in Europe, America and Southeast Asia were 694 million yuan, 425 million yuan and 207 million yuan respectively.

Judging from the current progress of brand building, the company is still committed to improving its brand awareness. In the prospectus, UGREEN Technology stated that its new products such as private cloud storage, wireless headphones, and charging and battery life have achieved fruitful sales results, while further improving the company's overall brand quality and awareness.

However, the intensified competition in the consumer electronics market in which UGREEN operates has also posed certain risks to the company's future development.

Competition in the consumer electronics market intensifies, UGREEN invests 157 million yuan in R&D

As the global consumer electronics market expands , the number of entrants into the industry has further increased, including established big-name brands such as Anker Innovations and Haineng Industrial ... as well as large international brand companies and various local small and medium-sized enterprises and start- ups. The market competition in this industry is becoming increasingly fierce.

This also made GreenLink Technology realize that if it cannot maintain its own advantages in its own brand, R&D technology, product quality, channel expansion, supply chain management and other aspects , its performance growth rate will slow down, its profit margin will shrink, and its competitive advantage will weaken .

In response to this, GreenLink Technology has taken targeted measures and increased investment in research and development so that its products can keep up with the market rhythm. It is understood that from 2019 to 2021, the company's R&D investment was 64.8853 million yuan, 95.1270 million yuan and 15.7 billion yuan, respectively, accounting for 3.17%, 3.47% and 4.54% of the company's operating income, respectively. R&D investment continues to increase.

In order to meet market demand, UGREEN Technology has accelerated the technological innovation of various product series, such as increasing the innovative research and development of private cloud storage, wireless headphones, gallium nitride chargers and other products and technologies. From the results of its R&D and innovation, the company has obtained 11 invention patents, 176 utility model patents and 1,017 design patents, and the relevant technical achievements are widely used in products. In addition, the company has 565 R&D technicians, accounting for 22.57% of its total number of employees, and its R&D and innovation advantages are further highlighted.

However, as GreenLink increases its R&D investment, the risks it faces are increasing. It is worth noting that the company's inventory book value in 2021 was 406 million yuan, 543 million yuan, and 726 million yuan, respectively, and the costs of its e-commerce platform are also increasing. Therefore, it can be seen that GreenLink's future development will also face many uncertainties.

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