The globally renowned tech consumer electronics brand, UGREEN Technology, is currently pushing for an IPO. On February 26, Shenzhen UGREEN Technology Co., Ltd. updated its status for the ChiNext IPO review to "submitted for registration" and also revised its prospectus.
In this IPO, UGREEN Technology plans to raise CNY 1.5037129 billion, of which CNY 551.2036 million will be used for product research and industrialization projects, CNY 110.4179 million for intelligent warehousing and logistics construction projects, CNY 392.0913 million for headquarters operation centers and brand construction projects, and CNY 450 million for supplementary working capital. It intends to issue 41.5 million new shares, corresponding to a fundraising of CNY 1.5 billion, with an approximate issue price of CNY 36.11 per share.
As a company that emerged from Huaqiangbei Commercial Street, UGREEN Technology primarily engages in the research, development, design, production, and sales of 3C products. Its product range includes five main series covering transmission, audio-video, charging, mobile peripherals, and storage. It adopts a combined online and offline approach, leveraging the "UGREEN" brand to establish a presence in domestic and international markets, with products being sold in numerous countries and regions worldwide.
According to the latest prospectus, the company's revenue from 2020 to June 2023 was CNY 27.38 billion, CNY 34.46 billion, CNY 38.39 billion, and CNY 21.21 billion, with a compound annual growth rate of 18.42% from 2020 to 2022. The performance has shown a trend of rapid growth. In 2023, UGREEN Technology's operating revenue and net profit attributable to shareholders continued the growth trend of previous years, reaching CNY 48.03 billion, a year-on-year increase of 25.09%, and net profit attributable to shareholders reaching CNY 387 million, a year-on-year increase of 18.27%.
As per the UGREEN Technology prospectus, the issuer was formerly known as UGREEN Limited. UGREEN Limited was established as a limited liability company by domestic natural person shareholders Zhang Qingsen and Chen Junling on March 16, 2012. On March 15, 2012, Zhang Qingsen and Chen Junling signed the "Articles of Association of Shenzhen UGREEN Technology Co., Ltd." UGREEN Limited had a registered capital of CNY 1 million, with Zhang Qingsen contributing CNY 700,000 (70%) and Chen Junling contributing CNY 300,000 (30%). Zhang Qingsen, the company's largest shareholder, directly holds 187,832,050 shares, accounting for 50.3019% of the total share capital, making him the controlling shareholder and actual controller of the company.
In the industry, there is a saying that "UGREEN Technology" dominates the 3C market with just one data cable. UGREEN Technology, leveraging a deep understanding of user needs, successfully emerged in the fiercely competitive 3C market by using the "data cable" as an entry point. After consolidating its position, the company gradually expanded into other product lines and carefully constructed a distinctive brand matrix.
After years of development, UGREEN Technology's product line has expanded from a single "data cable" to five major categories, including transmission, audio-video, charging, mobile peripherals, and storage. Today, the UGREEN brand boasts numerous popular products such as UGREEN power banks, wireless chargers, Apple Watch magnetic chargers, and HDMI cables.
According to the latest prospectus, in 2023, UGREEN Technology's charging and storage products performed exceptionally well. Compared to the same period last year, charging products grew by 58.66%, while storage products achieved a high-speed growth of 77.36%. It is worth mentioning that charging products maintained strong growth throughout the reporting period, which became one of the key factors driving the company's continuous performance growth.
In overseas markets, UGREEN Technology has achieved commendable success.
In 2014, UGREEN Technology made the strategic decision to expand into international markets. Subsequently, the company initiated a comprehensive global branding strategy by early entry into international platforms such as Amazon, AliExpress, Lazada, eBay, and Wish. Additionally, it progressively expanded its presence on social media platforms including Facebook, Instagram, and TikTok. Simultaneously, UGREEN Technology tailored its product offerings to align with the varying consumer preferences and pricing tendencies across different countries and regions. For instance, recognizing the blank market for products such as multi-interface plugs and portable chargers in emerging markets like Southeast Asia, UGREEN introduced products such as data cables, chargers, and multi-functional plugs, pricing them as low as USD 1. In contrast, in the European and American markets, the company introduced chargers, charging cables, Bluetooth earphones, and relatively high-end smart wearable products, priced between a few dollars to around USD 80.
By 2021, UGREEN's export turnover had soared to USD 1.5 billion, propelling the company to the top of the sales charts.
Transitioning from being an OEM manufacturer for major international brands to establishing its own brand and executing a global strategy, UGREEN Technology has completed a transformation from OEM to a branded entity.
Nevertheless, despite the strong performance in product sales and a consistent overall business growth trajectory, industry analysts have highlighted several significant risk factors that cannot be overlooked during its IPO process. These include a lack of emphasis on innovative research and development, potential quality control issues, frequent occurrences of non-compliance, and a high dependence on e-commerce platforms and external production.
Approximately 80% of UGREEN Technology's product sales rely on online e-commerce platforms, thereby increasing the company's burden of platform service fees and promotional expenses. Simultaneously, nearly 80% of the company's products depend on outsourced production, indicating a weak in-house production capacity, which could be significantly impacted by the instability of upstream suppliers.
The IPO and the pursuit of a listing on the Growth Enterprise Market have presented development opportunities for UGREEN Technology. However, in the face of the aforementioned multiple risk factors, the company needs to intensify its investment in research and development, enhance its technological innovation capabilities, and strengthen compliance management and in-house production capabilities to ensure long-term development.
From the acceptance of its IPO application to the recent submission of its registration, UGREEN Technology has been engaged in the process for over 20 months. On June 2, 2022, the company's application for a listing on the Growth Enterprise Market was accepted. Subsequently, on July 1, 2022, it entered the inquiry stage. On January 6, 2023, UGREEN Technology passed the listing committee meeting. Finally, on February 26, 2024, UGREEN Technology officially submitted its registration.
Currently, UGREEN Technology is approaching the culmination of its IPO journey, and whether it can successfully achieve a listing has become the focus of market attention.