3C giant terminates listing! It once raised 500 million yuan

Another large company’s plan to go public has failed.   

As an evergreen category in the cross-border e-commerce industry , the 3C track has always been full of beachheads. Anker Innovations' power banks and UGREEN Technology's data cables have successfully entered the IPO market in the popular track by virtue of their niche categories, and have also inspired newcomers to rush to the listing process. But now, some people have failed on the way to listing.

Shenzhen 3C giant terminates listing

Recently, it was revealed that the listing review of Shenzhen Jingchuang Technology Electronics Co., Ltd. (hereinafter referred to as "Jingchuang Technology") was terminated, and its dream of listing on the A-share market was completely shattered.

Looking back at Jingchuang Technology's listing process, it is not difficult to see the key points of its failure.

As early as 2021, the Shenzhen Stock Exchange accepted Jingchuang Technology's listing application. At that time, the company planned to raise 500 million yuan for projects such as product expansion and automation project transformation; after more than a year and three rounds of IPO inquiries, the company successfully passed the meeting in 2022. However, Jingchuang Technology has not received good news since then. Instead, it took the initiative to withdraw its listing application 20 months later.

Although the Shenzhen Stock Exchange did not disclose the specific reasons why Jingchuang Technology withdrew its listing application, some clues can be found from the information in the prospectus.

The latest performance disclosed in its prospectus only covers the first half of 2022, and the performance and profits in recent years are not optimistic. In the data from 2019 to 2022, the company's revenue was 366 million yuan, 528 million yuan, 600 million yuan and 279 million yuan respectively, but its profit, except for the highest of 90.6 million yuan in 2020, has been falling since then.

The gradual decline in operating performance once made the company's main business questionable. As a well-known 3C manufacturer in Shenzhen, Jingchuang Technology was founded in 2004 and mainly deals in game-related products including wired controllers, gaming headsets, mini game consoles, etc. Specifically in terms of products, the gaming peripherals business accounts for the highest proportion, which was as high as 90%. The game controller, a subdivided product, contributed the highest revenue to the company, accounting for more than 40% in 2021; followed by gaming headsets and smart monitors, both accounting for more than 20%.

However, it is not focusing on brand development, but mainly on OEM business. For example, Motorola's surveillance cameras, Nintendo's game controllers and headphones, etc. are all OEMed by it. In addition, Amazon brand companies such as Bigben, Meizhou Guowei and its affiliates, PDP, etc. are also its close customers.

In other words, Jingchuang Technology mainly relies on OEM, and its technological moat is relatively low, which is reflected in its prospectus. Although the company's R&D personnel account for more than 90% in recent years and the investment is not low, most of it is used for employee salaries, which only ensures the advancement of products. There are not many invention patents. As of last year, it only had 3 patents, and the time was before 2016, which does not meet the relevant standards of the GEM "Three Creations and Four Innovations".

Has the mom-and-pop store model’s impact on IPO also become a “hidden concern”?

In fact, there are many sellers who have withdrawn their IPOs like Jingchuang Technology . This year alone, more than 100 IPOs have been terminated at the Shanghai, Shenzhen and Beijing Stock Exchanges, and many have withdrawn their IPOs after passing the review. On the one hand, this is due to the strengthening of the regulatory accountability system, and on the other hand, it is due to unfavorable conditions in the industry or even the company itself.

Jingchuang Technology may be affected by many factors.

According to its prospectus, Jingchuang Technology was a typical husband-and-wife business model before its IPO, with Lin Jie and Liu Dongsheng as its actual controlling shareholders. Lin Jie controlled more than 50% of the company's equity through indirect and direct means, while Liu Dongsheng indirectly controlled more than 36% of the shares. Together, the two directly controlled nearly 90% of the company's shares.

The same husband-and-wife store model is not uncommon in the cross-border e-commerce circle. For example, the top sellers in our industry, such as Tongtuo, Value Chain, and even Amazon, were founded by husband-and-wife. In the early days of their business, they relied on this low-cost model to create high profits. Not only was it stable, but they were also able to quickly build up their stores, breaking through the siege of a large number of entrepreneurs.

However, in the IPO market, this type of husband-and-wife holding has always been the focus of listing inquiries. The obvious hidden danger not only makes the company's control more concentrated, but also causes market concerns. A dominant shareholder can easily lead to disadvantages in the company's governance, which often occurs in personnel appointments and removals and profit distribution.

But one thing that cannot be denied is that the gaming peripheral products in Jingchuang Technology's main category are currently very popular in the market.

Gaming peripherals are booming, benefiting a group of sellers

Some time ago, the domestic stand-alone game "Black Myth: Wukong" became popular, which not only made the game popular, but also a number of peripheral industry chains. On a certain domestic platform, the search volume for PS5 game consoles and Nvidia Black Wukong co-branded graphics cards, game controllers, keyboards, etc. has increased significantly, and some products have even been sold out overseas.

All of this, without exception, highlights the popularity of gaming peripheral products.

Relevant data shows that by 2029, global revenue from gaming peripherals and accessories is expected to reach US$12 billion, and with the popularity of games, it will further drive strong demand for gaming peripheral products.

In fact, as early as 2023, the scale of this market has exceeded 10 billion US dollars, of which the United States ranks first with a high value of 2.6 billion US dollars. Such a huge market and growth rate have also attracted widespread attention in the industry, and many domestic companies have already paid attention to this and started their overseas offensive.

AULA is a gaming peripheral brand founded in Dongguan in 2002. Its products currently cover mice, keyboards,

Headphones, speakers, and other categories. Benefiting from the overseas market, the brand maintains cooperation with many well-known companies such as HP, PHILIPS, AOC, and its products are sold to various countries overseas.

Akko, a Chinese keyboard brand , was founded in 2016 and it took three years to successfully gain a foothold overseas. It is understood that Akko's initial monthly GMV on Amazon was only 200,000 US dollars, but by exploring the habits of overseas users and in-depth user feedback on Amazon and other platforms, Akko increased its monthly GMV to 1.4 million US dollars six months later . At present, although the traffic of its independent website is not high, it mostly comes from natural search.

From the fact that a number of big sellers have gone overseas, it is not difficult to see the market prospects of gaming peripherals. From the user's perspective, gaming peripherals are not just a tool, but also a key point related to gaming experience and performance. In the future, as market demand continues to heat up, the appropriate demand for related products will inevitably emerge one after another. Sellers can develop products based on multi-angle feedback from users to win in the competition.

Gaming peripherals

3C manufacturers

Listing