With revenue of nearly 1.6 billion in three months, another major IPO was successfully approved

In the first half of this year, many big sellers went public. However, the capitalization process of each company is different. Some companies failed to update their information in time or for other reasons, and their road to listing was a bit bumpy. Some companies finally successfully went public and entered a new stage of development.

Recently, Greebo (Jiangsu) Co., Ltd. (hereinafter referred to as Greebo), a major brand in garden machinery, successfully passed the review of the Shenzhen Stock Exchange after listing and multiple rounds of inquiries, and has taken another step forward on the road to listing.

Product price increase has achieved results, Greebo's Q1 net profit increased by 687% month-on-month

On April 29, Greebo's status on the Shenzhen Stock Exchange was changed to "approved by the listing committee meeting". According to the review results of the GEM Listing Committee, Greebo meets the issuance and listing conditions and information disclosure requirements. On April 22 and May 21, Greebo also successively released the meeting draft and the latest prospectus. In the relevant announcements, the company also revealed its performance in the first quarter of 2022.

Greebo is mainly engaged in the research and development, design, production and sales of new energy garden machinery . Its main customers are large supermarkets and e-commerce platforms such as Lowe's , Amazon , and Home Depot . In 2021, the company's overseas revenue accounted for 98.61%.

Its own brands such as greenworks and POWERWORKS are becoming increasingly well-known in overseas markets. Greenworks series lawn mowers, hair dryers and many other products are always among the top "Best Sellers" on the Amazon platform and have a high influence in the North American market.

According to the filing , Greebo's preliminary estimated operating income for the first quarter of 2022 was 1.591 billion yuan, and its net profit attributable to the parent company's owners was 140 million yuan, both of which increased month-on-month, up 24.33% and 686.87% respectively. Greebo's month-on-month growth benefited from further cooperation with its customers Amazon, Costco, Toro, etc., which reduced its previous large share in Lowe's, and the gross profit amount also increased significantly accordingly.

It is understood that since the fourth quarter of 2021, Greebo has raised prices for some products sold on Amazon, with an increase of 5%-20%. For ODM model customers such as Toro, STIHL, Harbor Freight Tools, Metabo, etc., appropriate price increases have also been made, with price increases ranging from 5% to 15% . In addition, Greebo also revealed that it is currently coordinating price increases with customers such as Costco and TSC, as well as changing trade terms or sharing shipping costs.

Previously, Greebo's sales accounted for a high proportion at Lowe's. In order to reduce risks, after certain adjustments, its sales revenue and proportion at Lowe's have been on a continuous downward trend since the second half of 2020. By the fourth quarter of 2021, its revenue at Lowe's fell 55.42% year-on-year, while its sales revenue at Amazon and Costco gradually increased.

Compared with the significant growth in its month-on-month data, Greebo's year-on-year growth data is not ideal. In the first quarter of 2022, revenue increased by 5.52% year-on-year, and net profit decreased by 28.57%. Like most companies that have released their data, the situation of increased revenue but not increased profit is obvious.

As for the reason for the year-on-year revenue growth and net profit decline, Greebo said in the announcement that its sales revenue on major platforms and supermarkets increased significantly, keeping its main business income stable. However, due to the increase in raw material prices and shipping costs, as well as the increase in R&D and sales expenses, the company's net profit declined, but this does not affect Greebo's current actual profitability, which has been effectively improved.

Compared with China, Europe and the United States have higher demand for garden machinery, which provides conditions for Greebo's performance development.

Emphasis on R&D investment, Greebo's own brand revenue share increased

The garden machinery industry originated in Europe and has a history of over 100 years. With the improvement of people's living standards, small gardening and maintenance machinery has begun to enter European and American families and gradually become a household tool. In recent years, driven by the popularization of garden culture and the promotion of new products, the demand for garden machinery products has also been increasing.

According to statistics from Global Market Insights, the global lawn and garden equipment market size was US$28.3 billion in 2018 and is expected to exceed US$45 billion by 2025, with an average annual compound growth rate of nearly 7.0%, which means there is a broad market space.

In addition to Greebo, there are also many cross-border sellers in China that are deeply involved in the field of garden machinery, such as Daye Co., Ltd. , which specializes in lawn mowers and grass trimmers, and Chuangke Industrial and Giant Star Technology , which specialize in hand tools and power tools . Facing huge market demand and increasingly fierce market demand, enhancing core competitiveness and visibility has become the key to Greebo's development.

The improvement of reputation is inseparable from the influence of private brands. Greebo attaches great importance to the construction and cultivation of private brands. Since 2009, Greebo has successively established brands such as greenworks and POWERWORKS . After years of development, the popularity of greenworks has been continuously improved, and its products rank among the top three in the US new energy garden machinery market, and its sales and reputation on Amazon also remain at the forefront of the market.

As its popularity increases, the proportion of Greebo's own brand revenue has continued to grow. In 2020 and 2021, the proportion reached 54.05% and 56.97% respectively, accounting for more than half, becoming the main source of the company's revenue.

In order to maintain its leading position in market competitiveness, Greebo has been increasing its investment in research and development, and has established professional R&D centers in China, the United States and Sweden. As of the end of 2021, the company has more than 1,000 R&D and technical personnel, 1,241 domestic patents, of which 100 are invention patents.

So far, Greebo has won many honorary awards at home and abroad, such as the domestic "National Green Factory", "Jiangsu High-tech Enterprise", "Jiangsu Engineering Research Center", and its lithium-ion electric zero-turn lawn mower won the 2018 US PTIA Professional Tool Innovation Award, etc.

Specifically speaking of products, Greenworks has launched more than 40 products on its 60V voltage platform, which can basically cover various usage scenarios of outdoor gardening. After consumers purchase multiple greenworks products, they can realize the interoperability of battery packs between different products, which significantly reduces the cost of use and improves customer stickiness and the possibility of repeat purchases to a certain extent.

Compared with the past, garden machinery is currently facing higher environmental protection requirements. New energy products with clean and environmental protection, low noise, simple maintenance and low operating costs have become the general trend, and automation and intelligence have become new directions for the development of industry technology.

Since 2007, Greebo has been committed to the research and development and sales of new energy garden machinery. It has continuously upgraded its products in line with market demand. It has now become a leading company in the new energy garden machinery industry. Its products are widely sold in mature markets such as North America and Europe, as well as emerging markets such as Asia Pacific. Its market coverage and industry visibility are increasing day by day.

With the approval of this IPO, Greebo has moved one step closer to a successful listing, and it has also allowed more sellers to see the market potential of garden machinery. Its subsequent development is also worth looking forward to.

IPO

Greebo

Garden machinery