Another big seller is about to go public! Amazon small category BSR, net profit increased by 148% in 3 months

Since the outbreak of the COVID-19 pandemic, many cross-border sellers have started their own journey to go public. Under this huge trend of going public, another Amazon seller is about to go public.

According to data, this big seller was successfully awarded the title of a national-level specialized and innovative "Little Giant" enterprise in July this year . As the top BSR in a small category on Amazon, this big seller's net profit successfully increased by 148% in the first quarter of this year...

Which one is so popular? Let's take a closer look.

Amazon small category BSR, big seller net profit increased by 148% in 3 months

It is understood that Dingyang Technology is a research and development-driven high-tech enterprise that focuses on the development and technological innovation of general electronic test and measurement instruments. It has products such as digital oscilloscopes, waveform and signal generators, spectrum analyzers, vector network analyzers, etc. with independent core technologies. It has the domestic advanced general electronic test and measurement instrument research and development, production and sales capabilities.

It can be learned from public information that Dingyang Technology's listing process has reached the registration submission stage, and only the registration results have to be announced.

In fact, as a research and development-driven high-tech enterprise, Dingyang Technology has achieved remarkable results on Amazon. Its brand product SIGLENT often tops the list in small categories.

From January to March 2021, the company achieved operating income of RMB 65.3252 million, an increase of 75.27% compared with the same period last year; achieved net profit attributable to shareholders of the parent company of RMB 18.8078 million, an increase of 141.42% compared with the same period last year; achieved net profit attributable to shareholders of the parent company after deducting non-recurring gains and losses of RMB 18.3702 million, an increase of 148.66% compared with the same period last year.

The editor also learned that Amazon is a distributor of Dingyang Technology. Dingyang Technology's US subsidiary pays Amazon promotion fees, shipping fees, and after-sales service fees according to a certain percentage of the sales amount to Amazon, and the Shenzhen headquarters does not bear such expenses. In 2018, 2019, and January-June 2020, the number of products purchased by Amazon from Dingyang Technology was 7,525 units, 13,081 units, and 9,030 units, respectively .

Gross profit margin has exceeded 50% for three consecutive years, and Dingyang Technology's operating income ratio on Amazon has increased significantly

Below we can understand Dingyang Technology's gross profit margin and operating income on Amazon.

During the reporting period, the top five customers of Dingyang Technology are as follows:

As can be seen from the figure, the proportion of Dingyang Technology's operating income on the Amazon platform has increased year by year, with its operating income in 2020 reaching 410,864 yuan, while in 2018, its operating income on the Amazon platform was only 14.62 million yuan.

In order to standardize the company's operations and reduce related-party transactions, the company established subsidiaries, Dingyang North America and Dingyang Germany, and took over the assets and businesses of related parties in April 2018 and August 2018, respectively. Before the subsidiaries took over the business, the customers of Dingyang America and Dingyang Europe were mainly well-known dealers .

In 2018, 2019 and 2020, the company's operating gross profit was RMB 79.0268 million, RMB 102.5218 million and RMB 126.0134 million, respectively, showing an increasing trend year by year.

During the reporting period, the company's operating gross profit mainly came from its main business. The company's main business gross profit is divided into the following by product :

3

The composition of the company's main business gross profit is generally consistent with the revenue structure. Among them, digital oscilloscopes are the company's traditional advantage products and the main source of gross profit for the company during the reporting period. The proportion of gross profit of spectrum and vector network analyzers has increased year by year, mainly due to the increase in their revenue share and relatively high gross profit margin. With the gradual promotion of such products and the improvement of market recognition, spectrum and vector network analyzers will become an important profit growth point for the company in the future.

During the reporting period, the company's main business gross profit margin by product is as follows:

During the reporting period, the gross profit margin of the company's main business was 51.29%, 54.06% and 57.19% respectively , showing an overall steady upward trend. The main reasons are as follows :

(1) The company has strong R&D and design capabilities.

(2) During the reporting period, the Company's sales product structure was optimized. The sales proportion of product series with higher gross profit margins increased year by year, which correspondingly increased the overall gross profit margin .

(3) As the scale of the Company continued to expand, the economies of scale in production became apparent during the reporting period.

Dingyang Technology mainly sells overseas, adopting a sales model that combines its own brand and ODM.

Dingyang Technology mainly relies on overseas sales, with domestic sales accounting for a relatively low proportion. During the reporting period, overseas sales revenue accounted for 74.96%, 79.56% and 77.82% of the main business revenue respectively. The main overseas sales areas are North America, Europe and other regions where modern electronic information industries are relatively developed.

During the reporting period, the company's main business income by region is divided as follows:

During the reporting period, the company's main business income was divided into the following by sales model:

During the reporting period, the company adopted a sales model that combines its own brand with ODM. In terms of its own brand, the company adopts a sales model that is mainly based on distribution and supplemented by direct sales. During the reporting period, the sales revenue of the company's own brand products was RMB 116,846,100, RMB 155,137,900 and RMB 195,029,400, respectively, accounting for 76.12%, 82.47% and 89.53% of the main business income of the period, respectively, showing an overall upward trend. Sales of own brands are the company's main sales model.

At the same time, in order to continuously improve its brand influence, the company, relying on its own solid technical research and development and stable product quality advantages, adopts the ODM model to cooperate with internationally renowned test and measurement instrument manufacturers such as LeCroy and BK.

During the reporting period, the distribution of the company's main business income from self-branded products by region is as follows:

During the reporting period, the company's own brand products were mainly sold in China, Europe, North America, Asia, Africa, Latin America and others, among which China, Europe and North America accounted for a relatively high proportion, which is similar to the regional distribution of the industry market size. This is consistent with the company's strategy of focusing on the development of its own brand by taking the high cost performance of its products as a breakthrough, laying out major global markets, and focusing on the development of its own brand.

Although Dingyang Technology has achieved excellent results so far, this does not mean that Dingyang Technology's future journey will be smooth sailing.

Dingyang Technology stated that due to the late start of the domestic general electronic testing and measuring instrument industry, domestic customers have long used the brands of foreign leading enterprises and have formed certain usage habits and dependence on their products. At the same time, the company still has a large gap with foreign leading enterprises in terms of brand awareness, product line richness, product grade, overall industry solution capabilities and business scale . Therefore, the company's products have a low market share in the domestic market.

Due to uncertainties in politics, economy, trade policies, exchange rate changes and other factors, overseas markets have placed higher demands on the company's management capabilities. If the company cannot effectively manage its overseas business or its overseas market expansion goals cannot be achieved as scheduled, or if foreign companies use their brand, capital and technology advantages to seize the market for the company's products, it may affect the company's future business expansion in China, which in turn will have an adverse impact on the company's overall operating performance.

From the above, we can see that Dingyang Technology is currently facing many difficulties, and the road to going overseas will continue to have both opportunities and challenges!

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