F-1/A: Boqii Holding Limited Files Amended Registration for Resale of Class A Ordinary Shares Amid Revenue Decline and China Regulatory Risks

Boqii Holding Limited, a leading pet-focused platform in China, filed an amended registration statement for the resale of 1,875,006 Class A ordinary shares by selling shareholders, with the company not receiving any proceeds from the sale.

Summary

• Boqii Holding Limited operates as a leading pet-focused platform in China, offering online retail and a large online community for pet parents.
• The company connected a total of 742 brand partners with pet parents in China during the three years ended March 31, 2025.
• As of March 31, 2025, the platform offered approximately 21,140 SKUs, including 4,231 private label SKUs (20.0% of total SKUs).
• An aggregate of approximately 21.6 million orders were delivered to users and customers during the three years ended March 31, 2025.
• Active buyers decreased from approximately 5.3 million for the year ended March 31, 2024, to approximately 3.7 million for the year ended March 31, 2025.
• Total net revenues significantly decreased by 33.9% from RMB709.4 million (FY2024) to RMB468.9 million (US$64.6 million) for the year ended March 31, 2025, following a 35% decrease from RMB1,092.1 million (FY2023) to RMB709.4 million (FY2024).
• Net loss decreased by 15.0% from RMB68.9 million (FY2024) to RMB58.6 million (US$8.1 million) for the year ended March 31, 2025.
• The company operates through a Variable Interest Entity (VIE) structure in China due to foreign ownership restrictions on certain businesses like value-added telecommunication services and veterinary drug import.
• A reverse stock split was implemented on July 11, 2025, consolidating every 160 existing Class A ordinary shares into one new ordinary share, and ADSs were cancelled and exchanged for new ordinary shares.

Sentiment

Score: 3

Explanation: The company's financial performance shows a significant and consistent decline in revenues and active buyers, coupled with ongoing net losses. While there are efforts to improve gross margins and reduce operating expenses, the fundamental business contraction and numerous inherent regulatory and operational risks associated with its China-based VIE structure present a challenging outlook. The positive aspects are overshadowed by the overall deteriorating financial trends and high uncertainties.

Positives

• The company is a leading pet-focused platform in China, leveraging a large online community and expanding offline network.
• Gross margin increased from 19.8% in FY2024 to 21.5% in FY2025, primarily due to an increase in higher-margin service revenues.
• Net loss decreased by 15.0% from RMB68.9 million in FY2024 to RMB58.6 million (US$8.1 million) in FY2025.
• Operating expenses decreased by 21.2% from RMB203.9 million in FY2024 to RMB160.7 million (US$22.1 million) in FY2025, driven by reduced salary and benefits due to employee layoffs and lower third-party platform commission fees.
• The company maintains a positive working capital of RMB176.5 million (US$24.3 million) as of March 31, 2025.
• Strategic acquisitions, such as Xingmu (veterinary drug distributor) and investment in PetDog (pet store franchise and training center), aim to diversify service offerings and expand market presence.

Negatives

• Total net revenues have significantly declined year-over-year, from RMB1,092.1 million in FY2023 to RMB468.9 million (US$64.6 million) in FY2025.
• Product sales, the primary revenue source, decreased by 36.6% from RMB680.1 million in FY2024 to RMB431.3 million (US$59.4 million) in FY2025.
• The number of active buyers decreased from approximately 5.3 million in FY2024 to 3.7 million in FY2025, indicating a shrinking customer base.
• The company has a history of net losses and may continue to incur losses in the future, with no assurance of achieving profitability.
• Cash and cash equivalents have decreased significantly from RMB89.9 million in FY2023 to RMB38.7 million (US$5.3 million) in FY2025.
• Working capital constraints have historically limited the company's ability to grow revenues, especially with emerging brands.
• Identified a material weakness in internal control over financial reporting, specifically related to financial closing policies, procedures, and loan approval processes.

Risks

• Limited operating history across various business initiatives makes it difficult to evaluate business prospects and future growth rate.
• History of net losses and may not achieve profitability or continue as a going concern in the future.
• Inability to diversify monetization channels may materially and adversely affect business and prospects.
• Business, prospects, and financial results may be affected by relationships with third-party e-commerce platforms.
• Failure to acquire and retain new customers, or do so cost-effectively, may materially and adversely affect business.
• Significant legal and operational risks are associated with having substantially all operations in China, including uncertainties regarding the enforcement of laws and potential government intervention.
• The Chinese government may exert more oversight and control over overseas offerings and foreign investment in China-based issuers, potentially limiting the ability to offer securities or causing their value to decline or become worthless.
• Trading in securities may be prohibited under the Holding Foreign Companies Accountable Act (HFCAA) if the PCAOB determines it is unable to inspect or investigate the registered public accounting firm, leading to potential delisting from U.S. exchanges.
• The Variable Interest Entity (VIE) structure, used to comply with PRC foreign ownership restrictions, may not be as effective as direct ownership and faces uncertainties regarding its enforceability under PRC law.
• The shareholders of the VIEs may have actual or potential conflicts of interest with the company, which could adversely affect the business.
• The company may lose the ability to use, or otherwise benefit from, the licenses, approvals, and assets held by the VIEs, which could severely disrupt business.
• Fluctuations in exchange rates, particularly between RMB and US$, could have a material adverse effect on results of operations and investment value.
• Governmental control of currency conversion may limit the ability to utilize revenues effectively and affect investment value.
• The dual-class share structure with different voting rights limits the ability of Class A shareholders to influence corporate matters and could discourage change of control transactions.
• The company does not carry product liability insurance and may be subject to product liability claims if consumption and use of products are alleged to cause injury or illness.
• None of the lease agreements for leased properties have been registered with relevant PRC government authorities, potentially exposing the company to fines.
• Certain leased properties are designated for industrial use only, which may require the company to seek alternative leases and affect operations.
• Failure to make adequate contributions to various employee benefit plans and withhold individual income tax as required by PRC regulations may subject the company to penalties.
• The company has identified a material weakness in its internal control over financial reporting, specifically related to financial closing policies, procedures, and loan approval requirements.

Future Outlook

The company plans to continue investing in growing content, improving user experiences, and enriching a pet-focused ecosystem. It foresees a revolution in pet retail and services in China, driven by a seamless convergence of diversified brands and service providers, both online and offline, to deliver a truly targeted user experience. The company believes it is uniquely positioned to drive this revolution for all pet parents and pet businesses in China.

Management Comments

• "Our vision is to connect people and pets."
• "Boqii was founded for the love of pets. With this belief, we are inspired to empower the pet ecosystem and instill love and trust into pet parenting."
• "We believe you will love Boqii if you love pets."
• "We intend to keep any future earnings to finance the expansion of our business, and we do not anticipate any cash dividends will be paid in the foreseeable future."
• "We believe that our current cash, cash equivalents and short-term investments and borrowings will be sufficient to meet our anticipated cash needs, including our cash needs for working capital and capital expenditures, for at least the next 12 months."

Industry Context

The company operates within China's pet industry, which is characterized as relatively new, evolving, and unproven. It is influenced by factors such as consumption upgrades, demographic shifts (rising no-kid families, aging population), and the development of China's online retail market. Chinese pet parents are generally described as having less experience, being more price-sensitive, and less brand loyal compared to U.S. pet parents. The pet products market in China is still considered a niche market. The company faces intense competition from various channels including online and physical pet product retail stores, supermarkets, and general e-commerce platforms.

Management Changes

Corporate Governance

Legal Proceedings

• Fined RMB100,000 by Shanghai Internet Information Office in December 2021 for publishing and transmitting illegal information on the Boqii Pet APP.
• Fined RMB5,000 by the Shanghai Pudong New Area Market Supervision Administration in May 2023 for failure to update system promptly upon receiving customers' unsubscribe requests, resulting in re-sending commercial information.

Related Party Transactions

• Purchased goods from Jiangsu Nanjing Agricultural University Animal Pharmaceutical Co., Ltd. (an equity investee until December 2022) totaling approximately RMB3.89 million for the year ended March 31, 2024.
• Made advance payments to Superb Origin International Limited (a shareholder) of RMB5.5 million in January 2023 and RMB14.4 million in June 2024 for the purchase of goods, with a balance of RMB18.7 million (US$2.6 million) as of March 31, 2025.
• Provided an interest-free loan to Wuhan Chunzhijin (an equity investee), with a balance of RMB1.989 million outstanding as of March 31, 2025.
• Entered into a debt waiver agreement in September 2023 with Chong Li (100% equity owner of Superb Origin) for RMB75.28 million of borrowings payable.
• Entered into a debt waiver agreement in September 2023 with Superb Origin, waiving an outstanding investment amount of US$11.25 million payable by Superb Origin.

Stakeholder Impact

• Shareholders face potential dilution from future equity issuances, limited influence on corporate matters due to the dual-class share structure, and reliance on stock price appreciation for returns as no dividends are planned.
• Shareholders are exposed to significant risks from evolving PRC regulations, including potential delisting under the HFCAA and uncertainties regarding the enforceability of the VIE structure.
• Customers may be impacted by potential issues with product quality, IT system disruptions, and data security breaches, which could affect their trust and satisfaction.
• Employees have been affected by layoffs, as indicated by decreased salary and benefits expenses, and face risks related to compliance with PRC labor laws and social welfare contributions.
• Brand partners and suppliers may experience changes in relationships and supply chain dynamics, particularly with the company's focus on private label products and optimization of product mix.
• Creditors face risks related to the company's history of net losses and working capital constraints, which could impact its ability to repay liabilities.

Next Steps

• Continue investing in growing content, improving user experiences, and enriching the pet-focused ecosystem.
• Further improve the profitability of private label products.
• Expand the user base and strengthen user engagement.
• Explore and leverage new cost-effective sales and marketing channels, such as Red and Tiktok.
• Continue to implement measures to address identified material weaknesses in internal control over financial reporting.
• Potentially seek additional credit facilities or issue debt/equity securities if needed to meet cash requirements.

Key Dates

Recommendation

Keywords

Pet industry, E-commerce, China, Online retail, Pet products, VIE structure, SEC filing, F-1/A, Boqii, Animal healthcare, Supply chain, Digital platform, Corporate governance, Risk management, Financial reporting, Share resale, Reverse stock split