IPO | Xuanwu Cloud begins offering shares today, with an expected listing on July 8

Futu News, June 24th: This Friday$XUANWU CLOUD (02392.HK)$an announcement was made that the company will offer shares from June 24th to June 30th. The company plans to issue 34,390,500 shares, including 3,440,000 shares for public offering and 30,950,500 shares for international offering. The issue price per share is between HKD 4.93 and HKD 6.91, with each lot consisting of 500 shares. It is expected to be listed on July 8th.

The prospectus shows that,Xuanwu Cloud is an integrated smart CRM service provider, offering CRM PaaS services and CRM SaaS services to customers. Xuanwu Cloud'sCRM PaaSservice mainly provides customers with comprehensive communication capabilities through easy-to-deploy APIs and SDKs, while integrating artificial intelligence and data intelligence capabilities to deliver smart CRM services. Xuanwu Cloud’sCRM SaaSThe service consists of Marketing Cloud, Sales Cloud, and Service Cloud, providing customers with a one-stop intelligent CRM service covering the entire lifecycle from front-end sales to after-sales services.

Xuanwu Cloud's CRM PaaS service provides foundational communication, artificial intelligence, and data intelligence capabilities for its CRM SaaS service, enhancing and promoting the functionalities of Marketing Cloud, Sales Cloud, and Service Cloud. On the other hand, Xuanwu Cloud’s CRM SaaS service increases the usage of CRM PaaS capabilities by offering more application scenarios.

Xuanwu Cloud is a leader in the intelligent CRM service industry, with a history of over ten years. According to the Frost & Sullivan report, based on domestic smart CRM service provider revenue in 2021, Xuanwu Cloud isChina's largest domestic smart CRM service provider, holding a market share of 13.8% in 2021. In terms of revenue among smart CRM service providers in 2021, Xuanwu Cloud ranked as China’s second-largest smart CRM service provider.

Financial ConditionIn terms of company performance, total revenues for 2019–2021 were RMB 600 million, RMB 797 million, and RMB 992 million respectively, reflecting a compound annual growth rate (CAGR) of 28.56%. Net profits for 2019–2021 were RMB 13 million, RMB 29 million, and RMB 15 million respectively, with a CAGR of 6.72%.

In the industry,the intelligent CRM service market has experienced significant growth in recent years. The total addressable market (TAM) for the intelligent CRM service market increased from RMB 25.1 billion in 2017 to RMB 71.8 billion in 2021, representing a CAGR of 30.1%. Looking ahead, the TAM for the intelligent CRM service market is expected to grow to RMB 280 billion by 2026, with a CAGR of 31.3% starting from 2021.

Cornerstone InvestorRegarding investments, cornerstone investors have agreed, subject to certain conditions, to subscribe for a specific number of offered shares at the offering price equivalent to USD 3 million. The cornerstone investor is Colorful Cloud, a company dedicated to investing in various public and private funds, wholly owned by Cheerful Moon Global Limited.

Use of ProceedsIn terms of use, the net proceeds from the company amount to approximately HK$1.74 billion. According to the strategy, the proceeds from the global offering will be used for the following purposes in the specified amounts over the next three years:

Approximately 15% will be used to enhance CRM PaaS services by strengthening technology infrastructure and R&D capabilities in artificial intelligence and data intelligence; about 40% will be allocated to enhance and expand CRM SaaS services through continuous innovation; around 30% will be invested in improving sales and marketing capabilities; about 10% will be used for selectively seeking strategic investments and acquisitions; and approximately 5% will be reserved for working capital and general corporate purposes.

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