IPO pricing | Yuwa Group was subscribed 8.37 times, priced at HK$2.1 per share

Futu News, June 9, this Thursday$YOWA GROUP (02347.HK) $An announcement was issued. The company issued 55 million shares, priced at HK$2.1 per share, and 2,000 shares per lot. It is expected to be listed on June 10.

At the public sale stage, Youhe Group was subscribed about 8.37 times, and the final number of shares to be sold during the public sale was 5.5 million shares, accounting for about 10% of the total number of shares offered (before any over-allotment rights were exercised). A total of 4,622 valid applications were received. The first-hand winning rate was 20%, and the 20-lot subscription was stable.

Furthermore, the international offering has been oversubscribed. The final number of shares offered was 49.5 million shares, equivalent to about 90% of the total number of shares offered (before any overallotment rights are exercised). Futu Information collates relevant data in the following table:

The company plans to use approximately HK$74.7 million in net global sales for the following purposes: about 20.4% will be used to seize a higher market share through natural growth; about 7.1% will be used to expand the product supply range of the Group's e-commerce platform through the launch of online platform business; about 8.6% will be used to expand the Group's services to customers in China (especially in the Greater Bay Area); approximately 9.2% will be used to strengthen the Group's supply chain capabilities; approximately 11.8% will be used to further invest in brand management and marketing to enhance the effectiveness of the Group's marketing activities; approximately 19.2 % will be used to expand the Group's workforce to support the Group's business strategy; approximately 13.7% will be used to acquire companies in e-commerce related industries; and approximately 10.0% will be used as the Group's general working capital.

According to Frost & Sullivan's report, Youhe Group is one of the leading market participants in the B2C e-commerce industry in Hong Kong. It has more than 23,000 SKUs (mainly electronic products and home appliances), and has established a customer base of more than 807,000 registered members by the last practical date.

In fiscal year 20/21, according to website traffic, the company topped the list of e-commerce platforms focusing on electronic products and household appliances in Hong Kong, and recorded the highest online retail sales of electronic products and household appliances among all e-commerce platforms in Hong Kong, with a market share of about 5.6%. Based on website traffic and overall retail online sales in FY20/21, the company also ranked second and third among all e-commerce platforms in Hong Kong (with a market share of about 1.8%).

On the financial side, from fiscal year 18/19 to fiscal year 20/21, Youhe Group's revenue was HK$135 million, $260 million and HK$523 million respectively, with compound growth rates of 96.83%, and net profit of HK$12 million, $18 million and HK$29 million respectively, with a compound growth rate of 55.46%. For the first eight months of fiscal year 21/22, revenue was HK$497 million and net loss was HK$0.14 million.

On the industry side, the total retail sales of electronic products and household appliances reached HK$32.4 billion by FY20/21, which is expected to reach HK$49.6 billion in FY25/26, with a CAGR of 9.4% from FY21/22 to FY25/26, while sales of online electronics and household appliances are expected to grow at a CAGR of 15.8% from FY21/22 to FY25/26.

128K Views