F-1/A: Autozi Internet Technology Seeks $12.5 Million in Nasdaq IPO

Autozi Internet Technology (Global) Ltd. aims to raise capital through an initial public offering of 2,500,000 Class A ordinary shares, while existing shareholders plan to resell an equal number of shares.

Summary

• Autozi Internet Technology (Global) Ltd., a Cayman Islands-based holding company with operations in China, is planning an initial public offering (IPO) to sell 2,500,000 Class A ordinary shares.
• The company has applied to list its Class A ordinary shares on the Nasdaq Global Market under the symbol AZI.
• The IPO is contingent upon Nasdaq's approval of the listing application.
• Existing shareholders, Ruida Development Co., Ltd. and Newlight Management Limited, are also offering an additional 2,500,000 Class A ordinary shares through a resale prospectus.
• Autozi will not receive any proceeds from the sale of shares by the selling shareholders.
• The company anticipates the initial public offering price to be between US$4.00 and US$5.00 per Class A ordinary share.
• Upon completion of the offering, Autozi will have a dual-class share structure with Class A and Class B ordinary shares.
• Dr. Houqi Zhang, the founder and CEO, will beneficially own all Class B ordinary shares, representing approximately 90.8% of the total voting power after the offering.
• Autozi is an emerging growth company and a foreign private issuer, which allows for reduced public company reporting requirements.
• The company conducts its business through subsidiaries in China and faces legal and operational risks associated with operating in China.
• The PRC government has significant authority to influence business operations in China.
• The company has completed the filing with the CSRC in connection with this offering and its listing on the Nasdaq Global Market, and the CSRC published the notification of its approval of the completion of the required filing procedures on January 2, 2024.
• The company is required to report the offering and listing status to the CSRC within 15 business days from the completion of the offering.
• The company estimates net proceeds from the offering will be approximately US$7.9 million, which will be used for daily operations of onshore and offshore subsidiaries.

Sentiment

Score: 5

Explanation: The document presents a mixed picture. While the company is pursuing growth strategies and has achieved some success, it also faces significant risks and challenges, including financial losses, regulatory uncertainties, and intense competition. The sentiment is neutral as the positives and negatives balance each other out.

Positives

• Foreign investors are permitted to own 100% of the equity interests in a PRC-incorporated company engaged in the business of automotive services under current PRC laws and regulations.
• The company has completed the filing with the CSRC in connection with this offering and its listing on the Nasdaq Global Market, and the CSRC published the notification of its approval of the completion of the required filing procedures on January 2, 2024.

Negatives

• The company is not profitable and has incurred negative cash flows in operating activities.
• The company faces intense competition and may fail to maintain its market share.
• The company's business has been and may continue to be adversely affected by the COVID-19 pandemic.
• The company may be subject to product defects or other quality issues and product liability exposure.
• The company may be subject to administrative penalties or may be required to obtain approval or license for our loan facilitation services and factoring services.
• The company may be adversely affected by the complexity, uncertainties and changes in PRC regulations governing automotive services and internet-related services in the PRC.
• The company may rely on dividends and other distributions on equity paid by our PRC and Hong Kong subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our PRC and Hong Kong subsidiaries to make payments to us could have a material and adverse effect on our ability to conduct our business.

Risks

• The IPO is contingent upon Nasdaq's approval of the listing application.
• Investors may never hold equity interests in the Chinese operating entities.
• The PRC government has significant authority to influence business operations in China and may intervene with or influence our operations.
• Changes in Chinese or U.S. regulations may materially and adversely affect the company's business, financial condition and results of operations.
• The company may be subject to cybersecurity review by the Cyberspace Administration of China.
• The company may be subject to administrative penalties for failure to comply with fire safety filing requirements.
• The company may be subject to administrative penalties or may be required to obtain approval or license for our loan facilitation services and factoring services.
• The company may be subject to a variety of laws and regulations regarding cybersecurity and data protection, and any failure to comply with applicable laws and regulations, including improper use or appropriation of personal information provided directly or indirectly by our customers or end customers, could have a material adverse effect on our business, financial condition and results of operations.
• The company may rely on dividends and other distributions on equity paid by our PRC and Hong Kong subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our PRC and Hong Kong subsidiaries to make payments to us could have a material and adverse effect on our ability to conduct our business.
• The company may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited, because we are incorporated under Cayman Islands law.

Future Outlook

The company intends to expand its MBS store network, strengthen supply chain management, expand service offerings, build cooperation with NEV manufacturers, and enhance research and development capabilities.

Industry Context

The lifecycle automotive service market in China is highly competitive, with competitors including authorized dealership stores, e-commerce platforms, traditional automotive manufacturers, and franchised independent repair shops.

Comparison to Industry Standards

• Autozi ranked first in China's lifecycle automotive services market in terms of the growth rate of NEV revenues in 2022.
• Autozi ranked third in China's lifecycle automotive services market in terms of the growth rate of revenues in 2022.
• Company C, a leading integrated online and offline platform for automotive service based in Shanghai, China, keeps its advantage in aftermarket with 179 self-operated stores and 4,114 franchised workshops.
• Company B, a leading integrated online and offline platform for automotive service based in Zhejiang, China, has the most efficient automotive supply chain service in China's automotive service market.

Legal Proceedings

• Hunan Tianhuan Economic Development Co., Ltd. filed a lawsuit against Autozi Internet Technology and Dr. Houqi Zhang to exercise its redemption right.
• Autozi Internet Techs shareholder, Shenzhen Jinfeng Chuangfu Holding Group Co., Ltd., submitted an arbitration application to Beijing Arbitration Commission in January 2019, requesting our founder, Dr. Houqi Zhang, to redeem all of its equity interest in Autozi Internet Tech with a total payment of approximately RMB50.0 million plus interests.

Related Party Transactions

• The company has engaged in loan transactions with related parties, including Dr. Houqi Zhang and other shareholders.
• The company has accrued loan interest to related parties.

Stakeholder Impact

• Shareholders may face difficulties in protecting their interests due to the company's incorporation in the Cayman Islands and the dual-class share structure.
• The company's ability to pay dividends depends on the performance of its PRC subsidiaries and is subject to PRC regulations.
• The company's operations may be affected by evolving regulatory policies in China.
• The company's business is subject to various government regulations and regulatory interference in China.

Next Steps

• The company needs to obtain Nasdaq's approval for the listing application.
• The company is required to report the offering and listing status to the CSRC within 15 business days from the completion of the offering.
• The company needs to complete the filing procedures with the CSRC for any future offerings or capital raising activities.

Key Dates

Keywords

IPO, initial public offering, Class A ordinary shares, Autozi, automotive services, China, Nasdaq, CSRC, dual-class structure, emerging growth company, foreign private issuer