Savi successfully passed the review! The road to listing was bumpy, and its "Amazon dependence" worsened

In the past two years, there has been a surge in the listing boom in the cross-border e-commerce industry, with many big sellers in the industry going public, such as Santai Holdings, Zhiou Home Furnishing, Zibuyu and many other well-known cross-border companies.

It can be seen that the cross-border industry landscape is constantly changing and reshuffled. In order to promote the further development of the company and improve its ability to resist risks, more and more cross-border companies are trying to seek more funds by entering the capital market.

However, the road to listing for big sellers is full of twists and turns, and it is not easy to gain the favor of the capital market. However, after repeated attempts to IPO, Shenzhen big seller Sunway finally passed the review of the Growth Enterprise Market and officially passed the review, thus becoming the first stock of cross-border e-commerce.

It is learned that on June 17, the 34th review meeting of the GEM Listing Committee in 2022 was held, among which Shenzhen Dama’s IPO initial public offering application passed the review and was officially submitted to the meeting.

In this IPO, Savi Times plans to raise 622 million yuan to be used for fashion industry supply chain and operation center system construction projects, logistics and warehousing upgrade construction projects, brand building and channel promotion projects, and to supplement working capital.

▲ The picture comes from the prospectus of SDEV Times

At this review meeting, the GEM Listing Committee asked Suntech Power to explain the specific impact of the Amazon account blocking incident on the company and whether the passive store closures due to violations of the platform agreement during the reporting period were related to the account blocking incident.

It is reported that since the IPO application of Suntech Power was accepted on December 18, 2020, it has gone through a total of four rounds of inquiries and one round of implementation of the review center's opinions . Behind the ups and downs of the road to listing, what has been exposed are the operational risks that have always existed.

According to the prospectus, Savi Times' main businesses include clothing accessories, department stores and home furnishings, sports and entertainment, etc. In 2021, it achieved revenue of 5.565 billion yuan and net profit of 347 million yuan.

▲ The picture comes from the prospectus of SDEV Times

However, despite such impressive results, many risks have gradually surfaced.

Savi mainly relies on third-party e-commerce platforms such as Amazon, eBay, and Walmart to sell its products. The sales revenue achieved on Amazon from 2019 to 2021 was 1.967 billion, 3.682 billion, and 4.759 billion, respectively, showing an increasing trend year by year.

▲ The picture comes from the prospectus of SDEV Times

It can be seen that by 2021, Amazon's revenue accounted for 85.55% of the total revenue. At the same time, with the advancement of brand transformation, Savi gradually reduced its investment in Wish and eBay, and the proportion of revenue scale showed a downward trend. Therefore, there is currently a risk of being highly dependent on Amazon as a single sales channel.

In early May last year, Amazon experienced a wave of store closures, affecting more than 1,000 domestic companies. A large number of accounts under major sellers such as Youkeshu and Aoqi, which are known as the "Four Young Masters of South China City" like Savi, were blocked, causing a certain negative impact on their performance.

Savi also adopts the multi-account store operation model that is relatively common in the cross-border e-commerce industry. It currently has 503 subsidiaries and 605 seller accounts on the Amazon platform.

Saiwei said that although the current multi-account business model does not violate the current prohibitive regulations of the Amazon platform, and the company has not been punished by Amazon for closing its stores due to the multi-account business model during the reporting period, it cannot be completely ruled out that Amazon and other third-party e-commerce platforms will suddenly change the platform rules in the future, or question the compliance of the company's multi-account business model.

From January to March 2022, Suntech achieved revenue of 1.013 billion yuan, a year-on-year decrease of 28.40%; and achieved net profit of 48.0665 million yuan, a year-on-year decrease of 70.42%.

▲ The picture comes from the prospectus of SDEV Times

Regarding the reasons for the performance changes, Suntech said that on the one hand, the overstocking in 2021 overdrew consumer demand in advance, and on the other hand, after the subsidies were stopped and offline traffic resumed in the second half of last year, online traffic declined to a certain extent and gradually returned to normal development status.

Based on the current operating conditions, Suntech expects its revenue in the first half of 2022 to be between 2.242 billion and 2.386 billion yuan; the net profit attributable to the parent company's shareholders is between 116 million and 145 million yuan.

▲ The picture comes from the prospectus of SDEV Times

Although the listing process of Savi has been bumpy and it is still facing many risks and challenges at the current stage, fortunately, after years of ups and downs, it has finally been listed. What did Savi rely on to successfully pass the listing?

In terms of brand incubation and operation, Savi Times has formed a fashion lifestyle product matrix covering categories such as apparel and accessories, department stores and home furnishings, sports and entertainment.

During the reporting period, Savi Times has incubated 50 of its own brands with revenue exceeding 10 million yuan. Among them, 19 brands including home wear brand Ekouaer and men's wear brand Coofandy had operating revenue of over 100 million yuan during the reporting period.

▲ The picture comes from the prospectus of SDEV Times

On the supply chain side, Savi achieves efficient product supply through a high-quality supplier ecosystem and a global warehousing and logistics system, combined with its self-developed flexible clothing supply chain system .

In building a supplier ecosystem, Suntech combines full-link digital capabilities and a multi-level, dynamic supplier management system to continuously and timely launch products that meet market demand.

In the warehousing and logistics links, we have established a complete warehousing and logistics system based on overseas warehouses in Europe and North America and domestic warehouses , and seamlessly connected with global logistics partners to meet consumers' requirements for delivery timeliness.

Digital operation is a key means for Savi to build its core competitiveness. Savi focuses on the construction of the underlying IT platform and the application of big data technology to achieve a comprehensive technology-driven business model.

In the product research and development stage, we significantly improve the accuracy of product selection and iteration efficiency through systematic analysis of fashion trends; in the procurement stage, we analyze internal and external information through big data algorithms and formulate dynamic supply and demand balance plans; in the production stage, we independently develop a flexible supply chain system for clothing to realize the online production process; in the logistics stage, we use big data monitoring capabilities to achieve all-round logistics control.

In summary, the success of Savi's listing is inseparable from its branding, digital operation route, and strong supply chain advantages. Although Savi's performance this year is not satisfactory and it may still face some risks, if it can be successfully listed, with the influx of hot money, it is believed that it will be able to move to the next level.

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