Net profit increased 61 times in four years! Another new energy hot seller gets listing approval

It is learned that on July 27, the official website of the China Securities Regulatory Commission issued a public announcement, approving the IPO registration of four companies on the Growth Enterprise Market. The cross-border seller Shenzhen Huabao New Energy Co., Ltd. (hereinafter referred to as "Huabao New Energy") was also on the list.

▲ The picture comes from the official website of China Securities Regulatory Commission

With an average gross profit margin of 50%, Huabao New Energy's profit has increased 61 times in four years

Huabao New Energy was established in Shenzhen in 2011. It started with the power bank ODM business. In 2015, the company switched from OEM power bank to cross-border e-commerce . It also began to enter the outdoor energy storage market and established two self-owned brands, Dianxiaoer and Jackery, which are respectively deployed in the domestic and foreign markets. Now, when searching for Jackery on Amazon, its outdoor power supply ranks among the top products in the same category.

▲ The picture comes from Amazon US

From 2018 to 2021, Huabao New Energy achieved operating income of RMB 205 million, RMB 319 million, RMB 1.07 billion and RMB 2.315 billion , respectively, with a growth rate of 1000% ; net profit was RMB 45 million, RMB 36 million, RMB 234 million and RMB 279 million , respectively, a full 61 times !

The rapid growth of net profit is inseparable from its super-high gross profit margin. The financial report shows that in the first quarter of 2021, the gross profit margin of Huabao New Energy's core portable energy storage products reached 58.7% ! Although it declined in the first quarter of this year, the gross profit margin is still higher than 50% .

▲ The picture comes from Eastmoney Securities

In addition, the gross profit margins of solar panels and other accessories are also quite good, at 41.33% and 33.78% respectively , and the comprehensive gross profit margin of the main business is 48.39% , which is much higher than that of its peers. Taking Anke Innovation , a cross-border seller that also specializes in portable power supplies, as an example, Anke's net profit exceeded 200 million yuan in the first quarter of 2022, with a gross profit margin of 38.16% , a year-on-year increase of 1.11%, which is still lower than Huabao New Energy. Others, such as Payne Technology and Xinghui Shares, have fallen below 30% this year .

▲ The picture comes from Eastmoney Securities

Costs are rising, profits are falling, and insufficient R&D may become a hidden danger in the future

In the past three years, Huabao New Energy's revenue and profits have been booming, but after entering 2022, factors such as the tight global supply chain, rising shipping prices, and rising platform fees have caused Huabao New Energy's costs and sales expenses to continue to grow, and profits have inevitably declined. From January to March 2022, Huabao New Energy expects revenue of 504 million to 616 million yuan, a year-on-year increase of 25% to 53%; net profit after deducting non-recurring items is 60.9 million to 74.5 million yuan , a year-on-year decrease of 8% to 25% .

According to the prospectus, the online B2C model is Huabao New Energy's main sales channel, accounting for more than 80% of the company's revenue ! Since this model is a retail model directly facing consumers, after-sales issues such as returns and exchanges will incur considerable costs.

In addition, over-reliance on third-party platforms is also one of the reasons for the high sales expenses , especially the sharp increase in platform fees charged by the Amazon platform . Although Huabao New Energy has continuously diluted the business share of the Amazon platform in recent years, as of 2021, Amazon still accounts for more than half of its third-party platform revenue .

▲ The picture comes from Eastmoney Securities

The above reasons make Huabao New Energy reflect the characteristics of "high gross profit margin and high sales expense rate". In the first quarter of 2022, the company's sales expenses reached 130.482 million yuan , accounting for 21.3% of operating income ! The R&D expenses of products were only 21.8437 million yuan , accounting for 3.5% of revenue , which is lower than the industry average.

Taking Anker Innovation as an example, Anker, which insists on independent research and development, spent 778 million yuan on research and development in 2021 , accounting for 6.1% . Among the company's 3,532 employees, R&D personnel accounted for 45.44% ! This also enables Anker to continuously expand product categories, enrich usage scenarios, and maintain a good reputation in overseas markets for a long time.

In conclusion : In 2022, more and more cross-border e-commerce companies have embarked on the road of financing and listing, but many cases have shown that listing cannot guarantee the company's profit growth. Lack of brand influence and business relying on infringement and other borderline behaviors will ultimately be unsustainable. Focusing on building a brand is the right way to go overseas.