JST ERP makes another bid for Hong Kong Stock Exchange, following previous filing in June 2023
E-commerce SaaS ERP provider JST Group (Chinese: Jushuitan, 聚水潭) updated its prospectus on March 21, 2024, continuing the process of listing on the Main Board of the Hong Kong Stock Exchange, with CICC and J.P. Morgan as joint sponsors.
Founded in 2014, JST ERP has developed a comprehensive suite of cloud-based e-commerce SaaS products to help merchants seamlessly upgrade their business capabilities, improve performance, develop cross-platform businesses, while reducing deployment and operating costs. Since its inception, JST ERP has received investments from well-known institutions such as Amoeba Capital, Weiguang Venture Capital, Yuanjing Capital, Blue Lake Capital, Sequoia China, Goldman Sachs, and CICC.
Among them, JST ERP is its core SaaS product, enabling merchants to integrate, synchronize, and coordinate all their stores, orders, products, and inventory through JST ERP, managing the operation or financial data of various platforms. Currently, the main functions provided by JST ERP include Order Management System (OMS), Warehouse Management System (WMS), Purchase Management System (PMS), and Distribution Management System (DMS), among others.
Building on the ERP foundation, JST ERP has further expanded its product and service offerings to encompass other e-commerce operation SaaS products, launching four e-commerce operation SaaS products (excluding ERP) as of December 31, 2023. JST ERP's SaaS tools cater to various needs of e-commerce participants, providing capabilities such as financial accounting, management reporting and analysis, workflow management, and wholesale market procurement.
According to data from CIC, based on revenue in 2023, JST ERP is the largest e-commerce SaaS ERP provider in China, with its market share increasing from 20.7% in 2022 to 23.2%. In the Chinese e-commerce operation SaaS market, based on total SaaS revenue in 2023, JST ERP similarly ranks first.
The prospectus shows that from 2021 to 2023, JST ERP's revenue was CNY 433 million, CNY 523 million , and CNY 697 million yuan respectively, with a compound annual growth rate of 26.8%. During the same period, JST ERP's gross profit margin was 50.5%, 52.3%, and 62.3% respectively, showing an increasing trend year by year. Additionally, JST ERP's adjusted net loss narrowed by 45.8% year-on-year, and the adjusted net loss rate decreased significantly from 72.4% in 2022 to 29.4%.
It is worth noting that in 2023, JST ERP's revenue growth rate exceeded that of 2022, and the gross profit margin increased significantly by 10 percentage points, mainly due to economies of scale and the increasing proportion of repeat customers. It is reported that from 2021 to 2023, customers who purchased two or more JST ERP products contributed 27.6%, 30.6%, and 33.0% of the total SaaS revenue of JST ERP in the respective years.
In 2023, JST ERP served 62,200 SaaS customers of different categories, with a net customer revenue retention rate of 114%.
As of December 31, 2023, JST ERP held cash and cash equivalents of CNY 897 million, more than double the amount as of December 31, 2022, which was CNY 427 million. In 2023, the net cash flow from operating activities of JST ERP was CNY 210 million, a year-on-year increase of 165.8%.
JST ERP stated in the prospectus that the net proceeds from the IPO will be mainly used to strengthen research and development capabilities to enrich the product matrix; enhance sales and marketing capabilities; seek strategic investments to expand the product matrix, expand the customer base, and enhance technical capabilities; and for general corporate purposes.