Government SaaS Provider Epoint to Seek IPO on 'China's Nasdaq'
The company invests heavily in R&D – the accumulative R&D spending accounted for over 15% of the total revenue from 2017 to 2019.
The 22-year-old Jiangsu-based software company Epoint has filed to be listed on the Shanghai Star market. The initial public offering intends to raise CNY 2.9 billion (USD 415 million) and the funding will be used to upgrade its SaaS services, build research centers and boost liquidity.
The company provides SaaS ERP solutions to China’s government, state-owned enterprises as well as private businesses. Its product matrix includes business purchasing and tendering software, civil management platforms and digital construction platforms. Proceeds from the IPO will be used to support the above services’ infrastructure.
As disclosed by Epoint’s prospectus (in Chinese), the company reported a net profit of NY 145 million, CNY 216 million and CNY 263 million in 2017 – 2019 respectively, with a profit margin of 17.2%, 18.2% and 17.2% during the same reporting periods. Revenue generated from government clients contributed 67.5%, 73.26% and 66.08% in 2017-2019 respectively.
Epoint offers ‘smart government’ digital solutions integrated with life-cycle maintenance services. With a promising profit margin, the company still needs to worry about the government’s digital services budget as the state acts as the key account of the company.