Another cross-border blockbuster is heading for IPO!

The fishing gear industry, which makes men spend money like crazy, is making a fortune.

In the consumer market, there has always been a generally recognized ranking of value: "girls > children > young women > old people > dogs > men". It is not difficult to see that the value of men is at the bottom, but with the continuous development of the Internet and e-commerce, male consumption has also begun to rise.

Especially in terms of online consumption, the average annual expenditure of men has surpassed that of women in recent years. They are more keen to invest more money in IT, motorcycles, games, cars and other consumer fields, which has also driven the rapid development of a series of industries.

As one of the most popular hobbies for men, fishing is a great way to make money. According to Statista, the global fishing gear market revenue reached $23 billion in 2023 and is expected to grow to $31 billion in 2028.

In the United States, fishing has become a national sport covering young people to the elderly. Benefiting from the explosive growth of fishing consumption and the unlimited business opportunities released, a number of Chinese fishing gear companies have also taken advantage of the situation to go overseas, and fishing gear brands in Zhejiang, Weihai and other places have continued to emerge, breaking the monopoly of foreign brands.

Will Zhejiang Dama submit its application for listing?

Recently, Zhejiang fishing equipment manufacturer Lexin Outdoor International Co., Ltd. (hereinafter referred to as "Lexin Outdoor") submitted a prospectus to the Hong Kong Stock Exchange, intending to be listed on the main board of Hong Kong, with CICC as the exclusive guarantor.

According to the prospectus, founder Yang Baoqing indirectly holds approximately 88.06% of the total issued share capital of Lexin Outdoor , making him the company's largest shareholder. However, his daughter, who returned from overseas after 1995, has taken over Lexin Outdoor and is mainly responsible for the overall strategy, business development and management of Lexin Outdoor.

If the IPO process goes smoothly, Lexin Outdoor is expected to become the "first fishing stock" on the Hong Kong Stock Exchange.

In fact, Lexin Outdoor's ability to go public is not accidental, but a long-term historical accumulation. As early as 1993, Yang Baoqing, a post-60s founder, showed the strong entrepreneurial genes of Zhejiang businessmen and established Kangda Leather and Plastic Products Factory (the prototype of Lexin Outdoor).

In 1998, Yang Baoqing received an order for 1,000 meal kits from a Canadian customer, which made him realize the European and American people's love for leisure sports. He began to focus his business on outdoor leisure products, mainly producing folding outdoor tables, chairs, etc., and later set his sights on the fishing gear industry.

Lexin Outdoor has achieved remarkable results by building new production facilities to expand production capacity, setting up an office in the UK to expand into the European market, acquiring the overseas fishing company Solar UK, and establishing its own brand.

Today, Lexin Outdoor has become the world's largest fishing equipment manufacturer.

According to Frost & Sullivan data, in the segmented fishing equipment manufacturing industry, based on 2023 revenue, Lexin Outdoor has a market share of 20.4% , making it the world's largest fishing equipment manufacturer, with business covering North America, Europe, Asia and other regions.

Anyone who knows about fishing knows that a novice may only need to buy a fishing rod, bait and a stool; but experienced players, especially those who "pay money", often equip themselves with fish guards, fishing chairs, fishing boxes, parasols, fish guards and other equipment.

Huge demand has created new opportunities in the fishing market, and Lexin Outdoor is also aware of this.

It does not produce expensive fishing rods, but focuses its business on fishing equipment and other product combinations, such as hardware and accessories, bags, tents and other auxiliary fishing gear, which are used in carp fishing, competition fishing, lure fishing and other fishing scenarios.

This point is also mentioned in Lexin Outdoor's prospectus. Its product portfolio covers 8,000 SKUs of fishing equipment, including fishing chairs, fishing beds, rod racks, fishing boxes, trolleys, fishing gear tents, etc., which are enough to meet the diverse needs of consumers in different fishing scenarios.

It can be said that any fishing related equipment can be purchased here at Lexin Outdoor.

In addition, Lexin Outdoor also maintains good cooperative relations with many world-renowned outdoor product giants through the OEM model, including outdoor product brand Decathlon, fishing brands Rapala VMC and Pure Fishing, British fishing brands Fox, Nash, etc. As of the first half of this year, Lexin Outdoor has maintained cooperative relations with 80 customers for more than 5 years, accounting for 70% of the total customer base.

From small items like fishing reels, fishing lines, and fishing baits to large items like fishing boxes, fishing chairs, and fishing beds, you will find the presence of Lexin Outdoor in all these big-name products. Especially in the European market, where local consumers have a strong demand for fishing equipment, Lexin Outdoor's products account for 72.2% of exports.

In order to meet the different needs of consumers, Lexin Outdoor has developed different products. Taking the European market as an example, Lexin Outdoor has developed a fishing sofa chair that not only has the characteristics of a traditional carp hanging chair, but also has functions such as adjustable backrest angle, so that anglers can always maintain a comfortable state.

There is a joke circulating on the Internet that “Lure fishing will make three generations poor, and Taiwan fishing will ruin your life”. I believe many people also want to know how profitable the business of selling fishing gear is?

It was found from the financial report that by selling fishing derivative products, Lexin Outdoor achieved revenue of 908 million yuan, 622 million yuan and 512 million yuan in fiscal years 2022 to 2024, and net profit of 102 million yuan, 79 million yuan and 62 million yuan respectively.

This is equivalent to a net profit of more than 200 million yuan for Lexin Outdoor in three years. It is not difficult to see the popularity of fishing, but as the saying goes, joy and sorrow coexist.

Liu Lin, an angler in the industry, pointed out: "Fishing-related necessities, such as fishing rods, fishing lines, fishing chairs, etc. are very popular among anglers, but fishing beds and tents are not so popular." This is quite consistent with the financial report data. In recent years, Lexin Outdoor's hardware and accessories sales have been good, while bags and tents have been declining.

In addition, Lexin Outdoor is planning to expand high-potential fishing tackle categories such as fishing rods, fishing reels, and fish hooks, and turn to high-potential markets such as Southeast Asia. Naturally, it will also be able to see which markets and which products have strong money-making ability.

Not only that, Lexin Outdoor is also under pressure from OEM. In the three years from 2022 to 2024, the proportion of OEM for the company exceeded 90%. It can be said that Lexin Outdoor is highly dependent on major customers. If the European and American markets are weak and the orders of major customers change, it will naturally affect Lexin Outdoor's revenue.

One point worth noting is that although the company's revenue has been declining year by year, Lexin Outdoor's gross profit margin is increasing, from 19.2% in fiscal 2022 to 27.5% in fiscal 2024.

On the other hand, Lexin Outdoor is still "walking on two legs" and vigorously developing its own brand.

In 2017, Lexin Outdoor acquired Solar, a well-known British carp fishing (a popular fishing method in Europe), and thus started its OBM business. The company's performance is on a positive trend. In fiscal year 2024, Solar's sales will triple compared to fiscal year 2018.

In order to improve its competitiveness, Lexin Outdoor has started to vigorously improve its R&D level. At present, Lexin Outdoor holds 72 patents in China and 31 patents overseas. As early as 2007, after the company acquired the famous American outdoor sports and leisure brand Westfield, it registered the brand trademark in the United States and Europe simultaneously.

On the supply chain side, Lexin Outdoor has already established three factories in Deqing, Zhejiang Province, with a total construction area of ​​45,684.1 square meters and a total production capacity of 5 million pieces. These three factories focus on hardware and accessories, packaging bags and tent products, and the factory utilization rate is relatively high.

It is not difficult to see that this IPO on the Hong Kong stock market is not only a recognition of Lexin Outdoor's strength, but also an important milestone in its development. The fishing gear market is constantly developing, and Lexin Outdoor has to transform from OEM to its own brand. It can only be said that listing is not the end, and the road ahead is long and bright.

Anker invested in this brand, with annual sales exceeding 500 million

In sharp contrast to Lexin Outdoor is KastKing, a fishing gear brand from Weihai, Shandong. It broke the shackles of OEM for traditional foreign trade companies and became the top seller in the fishing gear category on Amazon North America in its first year. It was also invested in by Anker.

Sellers who know Weihai know that it handles more than 60% of the world's fishing tackle products, making it the veritable fishing tackle capital of China. According to Weihai Customs data, in the first three quarters of this year, Shandong Weihai Port exported 2.033 billion yuan worth of fishing tackle, a year-on-year increase of 13.4%.

However, like Lexin Outdoor, most local companies in Weihai export their products through OEM, and it is easy to imagine how they were controlled by others. KastKing, however, broke this situation and started selling fishing gear products overseas under its own brand.

In 2013, Cui Tianshi, a 26-year-old young man from Weihai, founded KastKing's parent company Eposeidon Outdoor Adventure in a small garage in New York. It mainly produces peripheral products such as fishing rods and fishing reels, and also began his dream journey to create a world fishing gear brand.

As we all know, fishing is a popular sport in Europe and the United States, second only to running. It covers all age groups from the elderly to children, and even the proportion of female fishing enthusiasts is as high as 40%. "The charm of fishing is that you can't see or touch it, but you can use your own skills to enjoy the excitement of adrenaline rushing when the fish bites the hook," a fishing enthusiast admitted.

With more people fishing, the demand for fishing gear has naturally increased. What's more important is that they are willing to pay for this hobby and buy their favorite fishing rods, fishing lines, fishing reels and other equipment.

In the past, they would mostly buy internationally renowned fishing gear brands such as Daiwa, Shimano, and Pure Fishing, with relatively high average order values. However, the emergence of KastKing broke this situation, breaking through the competition with its unit price of US$30-400, high-quality products, and the concept of "affordable innovation."

It has to be said that it is hard not to be tempted by such a cost-effective product. After more than a year of hard work, KastKing not only became the top seller in the fishing gear category of Amazon North America, winning multiple awards, but also gained a large number of fans in a short period of time, which eventually turned into considerable orders.

The well-known 3C brand Anker keenly noticed the potential of fishing gear brand KastKing as early as 2017 and invested in it to become one of its early shareholders.

After that, KastKing continued to make inroads on platforms such as Walmart and AliExpress, and while achieving success, it also won the favor of many professionals. Even some top talents in the industry (who have worked at Abu Garcia, Lew's, etc.) chose to join the warm family of KastKing.

With the addition of an international team, KastKing's products and supply chain have been further improved.

KastKing has successfully combined high-quality materials from various countries, including braided lines made in the United States, fishing reels and fishing rods made in China and South Korea, and carbon lines made in Japan and Germany. Even though some products have been upgraded many times, they are still sold at the original price, which makes KastKing highly praised by fishing enthusiasts.

On Amazon, many of KastKing's products dominate the BSR list of subcategories, including fishing rods, fishing lines, fishing reels and other products.

Take a braided fishing line as an example, the monthly sales volume reached 15,000 orders, with sales reaching 263,000 US dollars. According to consumer comments, this fishing line not only has good wear resistance, but also reduces the possibility of line production and loss of big fish. Many consumers favor this fishing line.

In fact, it is not just the fishing lines. KastKing’s various peripheral products such as sunglasses and backpacks for use in fishing scenes also have good sales. For example, a pair of sunglasses has different colors, and the sales of a single color can reach 800+.

It is not difficult to see that the KastKing brand has already possessed considerable influence, and the sales of peripheral products have also been boosted.

By 2023, KastKing's annual brand sales have exceeded 500 million RMB, and it has become a leading company in online fishing gear sales in North America.

In terms of independent site traffic, international brands that have already seized the initiative naturally have a lot of traffic. For example, Japan's Shimano has a total of more than 13 million visits, more than 60% of which come from natural searches; Daiwa also has more than 3 million visits, more than 50% of which come from natural searches.

Although KastKing's traffic is not comparable to those of these international fishing gear brands, all data show KastKing's excellent performance. In the three months before October, KastKing's website had a total of 571,000 visits, with organic searches accounting for more than 20%.

Among them, male users account for the vast majority (over 70%), mainly in the 55-64 age group, which just confirms the industry rumor that "middle-aged men are the main force of fishing."

In terms of marketing, KastKing mainly promotes through social platforms such as Instagram and TikTok. On Instagram, KastKing mainly cooperates with fishing celebrities to promote daily content and set up exclusive discount codes. On TikTok, KastKing's official account mainly gains views and fans by sharing practical suggestions.

For example , on the question of "How should beginners choose a suitable fishing reel?", the brand provided practical suggestions through videos, which not only attracted a lot of discussion and sharing from fans, but also drove the number of views to over one million, and the number of brand fans continued to increase.

It is not difficult to see that both Lexin Outdoor and KastKing are taking advantage of the dividends of fishing gear products to move towards higher levels, and are also demonstrating the "氪金" ability of fishing gear products.

Chinese sellers are using fishing gear to empty foreigners' wallets

Looking at the global fishing tackle market, its market size has increased from 113.4 billion yuan in 2018 to 137.8 billion yuan in 2023, with a compound annual growth rate of 4.0%. It is expected to increase at a rate of 5.7% to 181.9 billion yuan in 2028.

In the fishing equipment industry, even though growth has been hindered before, Frost & Sullivan expects growth to resume in 2023, with a projected growth rate of 6.9% by 2028, and the market size will reach 9.5 billion yuan.

Following the development trend of the industry, it can be found that the fishing equipment industry has a relatively small market size, but a rapid growth rate, while the fishing tackle market is large and worthy of sellers’ exploration.

The main consumer markets for fishing tackle can be divided into four main battlefields, namely North America, East Asia, Europe and Southeast Asia. Among them, North America is the world's largest fishing tackle market, with a market share of 31.1% in 2023.

Next are East Asia, Europe and Southeast Asia, accounting for 29.7%, 22.1% and 10.7% respectively. Among them, the sales volume of European and American fishing gear is the most obvious. Taking Russia as an example, the per capita expenditure on fishing gear in 2024 increased by 30% compared with last year, and the market value exceeded 4 billion rubles.

Fishing enthusiasts have become the main consumer group. In order to catch fish, some fishermen have also used various technological means, such as electronic equipment with GPS, sonar fish finders, etc., to catch fish faster.

The United States, which has long been known as the "country of sea fishing," ranks first in the world in terms of demand for fishing rods. Relevant data shows that the number of Americans who are keen on fishing has reached 74 million, and they spend an average of $1,037 on fishing activities each year.

In Japan, a fishing method called "Tanago fishing" is also very popular. It is understood that this fishing method is actually small-item fishing, that is, it usually uses a shorter fishing rod and fishing line, and does not pursue big fish, but targets small fish.

Compared with a large number of fishing tackles, the equipment for small fishing can be obtained with a few hundred or even tens of yuan. In addition, fishing equipment including fishing rods, line groups, fish hooks, floats, etc. are very small. Due to the mini design of the equipment, it has also attracted many couples, women and children to experience it.

In fact, as fishing becomes more popular, the number of Chinese fishing gear companies is also increasing day by day.

In 2021, the number of Chinese fishing tackle and fishing gear related companies exceeded 10, and by 2023, the number of registered fishing tackle and fishing gear related companies in my country has exceeded 50 players, setting a new record in ten years. According to Qichacha data, as of November 20 this year, 398,000 fishing tackle and fishing gear related companies have been registered in my country in 2024.

More and more young fishing enthusiasts are emerging on the banks of rivers, in fish ponds and in ecological parks across the country, and the growth rate of consumer spending on fishing is far exceeding that of other sports such as ball games and swimming.

It is not only the policy of the state that strongly supports the fishing industry, but also the active participation of anglers. Even in 2024, the association held nearly 500 fishing competitions of various types, with nearly 50,000 professional anglers directly participating.

As a country that produces 80% of the world's fishing gear products, China is already a major fishing gear processing country. Data shows that by the end of 2023, the market size of China's fishing gear and related industries will exceed 50 billion yuan, the export of major fishing gear products will be nearly 1.8 billion US dollars, and the number of industrial enterprises above designated size will exceed 260.

Not only is there fishing tackle industry clusters such as Weihai, Shandong, the "China Fishing Tackle Capital", but also Suning, Hebei, the "China Fishing Tackle and Fish Rod Industry and Trade Base", and Linxiang, Hunan, the "China Fishing Tackle and Float Hometown". While countless companies are deeply cultivating the domestic market, they have also extended their tentacles overseas to empty foreigners' wallets.

A small fishing rod connects hundreds of millions of people and drives a 100 billion yuan industry chain . Fishing is no longer just a simple leisure sport, but a gold mine that can drive industrial development .

IPO

Fishing gear

Lexin Outdoor