After several years of intense competition, the domestic bike-sharing industry in China has entered a phase of calmCurrently, the market is dominated by three key players: Meituan Bike (formerly known as Mobike), Hello Chuxing, and Didi Qingju, with no new entrants on the horizon.
However, following initial market education, the concept of sharing has become widely recognized, and the broader sharing economy still boasts significant scaleUnlike the bike-sharing sector, which primarily caters to end consumers (B2C), the sharing economy's business-to-business (B2B) market continues to thriveWith the rise of new energy vehicles in China, a new industry champion has emerged and is planning for an IPO. Named Suzhou Youlesai Shared Services Co., Ltd. (referred to as "Youlesai" or "the Company"), this integrated packaging service provider submitted its prospectus in 2024, planning to list on the Hong Kong Stock Exchange.
In January of this year, regulators requested Youlesai to provide additional clarifications regarding various issues, such as the pricing basis for share changes since its inception, the reasons and legal implications behind the lack of registration of its shareholder Suqian Guofa as a private equity fund, and any disputes regarding partners exiting the employee stock ownership plan.
The authorities' scrutiny of Youlesai's shareholders may be related to the dizzying stock transactions leading up to the IPO.
In the run-up to the IPO, the actual controller has made multiple cash-outs.
According to Youlesai, if measured by revenue in 2023, it stands as the largest service provider in China's shared operations service industry and specifically within the automotive sector
Advertisements
The company's revenue reached 794 million yuan in 2023.
Achieving nearly 800 million yuan in annual revenue in a relatively obscure segment of the sharing industry is partly attributed to the founder, Sun Yan'an's, extensive logistic backgroundPublic records show that Sun Yan'an was born in 1971 and graduated with a degree in Logistics Engineering from Beijing University of Science and Technology.
In 1998, he, along with his brothers Sun Wenhong and Zhu Zhizhou, established Anhua Logistics, focusing on logistics services and equipment sales.
In 2016, sensing the growing potential of the circular packaging service industry, Sun Yan'an, Sun Wenhong, Zhu Zhizhou, and Wang Yue founded YoulesaiWang Yue is Sun Yan'an's nephewAt the company's inception, the four founding shareholders held ownership stakes of 80%, 5%, 5%, and 10%, respectively.
From 2016 to 2018, Youlesai gradually purchased equipment and assets from Anhua Logistics, totaling a transaction price of 79.4 million yuanAlongside this absorption, Youlesai also initiated external financing.
In September 2017, Youlesai completed its Series A financingInvestors such as Suzhou Guofa, Origin Standard, Suqian Guofa, Suzhou United, and Changzhou Shuguang collectively acquired 25% equity in Youlesai, reducing Sun Yan'an's stake to 60%.
In July 2021, Sun Yan'an transferred 5% of his equity in Youlesai to Shanghai Qianjin, Hangzhou Jintou, and Yu Yue for a transaction price of 30 million yuan, bringing his holdings down to 55%.
In July 2022, Youlesai engaged in Series B financing
Advertisements
Investors, including Yancheng Integration Base, Suzhou Industrial Investment, Suzhou Shihu, and Suzhou Technology, acquired a 6.26% stake for 50 million yuan.
Around the time of the Series B financing, Suzhou Anhua transferred 0.75% of Youlesai's shares to Fang Dianjun and 1.5% to Suzhou Sailing (an employee stock ownership platform), with a total transaction price of 13.5 million yuan.
The shareholding structure indicates that Suzhou Anhua is controlled by Sun Yan'an, Sun Wenhong, and Zhu Zhizhou, with their stakes at 90%, 5%, and 5%, respectivelyNotably, in both transactions involving Suzhou Anhua, Sun Yan'an emerged as the primary beneficiary.
In October 2024, Youlesai underwent a shareholding restructuringFollowing this reform, the company promptly submitted its prospectus to the Hong Kong Stock ExchangeBefore the IPO, Sun Yan'an remained the largest shareholder of Youlesai, holding approximately 56% of the shares.
Interestingly, among Youlesai's numerous investors, Suzhou Guofa, Suqian Guofa, and Suzhou United are all investment funds under the Suzhou state-owned assets, collectively holding nearly 10% of the sharesHowever, the failure to register Suqian Guofa's private equity fund prompted requests for Youlesai to clarify the reasons and legal implications of this status and whether it would impede the upcoming issuance and listing.
High Accounts Receivable Amid Customer Diversification
The prospectus reveals that Youlesai focuses on providing services to automotive parts manufacturers and OEMs, including the provision of reusable containers such as boxes for packaging, storage, and transportation during the logistical processes of automotive parts and lithium batteries
Advertisements
Notable clients include BMW, Mercedes-Benz, CATL, and Tesla.
Particularly, the domestic surge in new energy vehicle development has significantly boosted Youlesai's revenueFinancial data shows that from 2021 to 2023, Youlesai's revenue jumped from 509 million yuan to 794 million yuan, reflecting a compound annual growth rate of 24.8%. In the first half of 2024, revenue reached 383 million yuan, marking a 17.1% year-over-year increase.
Youlesai's business model can be summarized as twofold: integrated container management encompassing shared operational services, leasing services, and other value-added services; and container salesIt is clear that Youlesai’s business model carries forward the legacy of Anhua Logistics from its earlier years.
In the breakdown of revenue, shared operational services account for the majority of the incomeFrom 2021 to 2023, revenue from these services represented approximately 74% of Youlesai's main revenue, which increased to 80% in the first half of 2024. Meanwhile, the revenue from container sales has consistently constituted less than 20% of total revenue during all periods assessed.
The fragmentation of the downstream automotive parts sector leads to a relatively low customer concentration for YoulesaiOver the years, Youlesai's customer base numbered 429, 536, and 509 clients for the years 2021, 2022, and 2023, respectivelyIn the first half of 2024, this number dipped to 417. However, the primary clients (those generating over 1 million yuan in revenues annually) remained stable, numbering 97, 106, and 115 in the respective years, with a slight decrease to 106 in the first half of 2024.
On the other hand, Youlesai faces challenges in collecting payments, resulting in persistently high accounts receivable.
From the end of 2021 to 2023, Youlesai’s accounts receivable and notes totaled 264 million yuan, 311 million yuan, and 361 million yuan, with 293 million yuan in the first half of 2024. The increasing volume of receivables led Youlesai to raise its impairment provisions, which for the first half of 2024 marked a significant threshold, surpassing 4% to reach 4.14%.
The difficulty in collecting payments is potentially linked to the automotive sector's reliance on notes for settlements
Advertisements
Advertisements