F-1: Boqii Holding Limited Files for Resale of 2 Million ADSs in U.S. Market

Boqii Holding Limited, a leading pet-focused platform in China, has filed a registration statement for the resale of 2,000,000 American Depositary Shares (ADSs) by selling shareholders to enhance liquidity in the U.S. market.

Summary

• Boqii Holding Limited has filed a Form F-1 registration statement with the SEC for the resale of 2,000,000 American Depositary Shares (ADSs) by selling shareholders.
• Each ADS represents 150 Class A ordinary shares, totaling 300,000,000 Class A ordinary shares.
• The company will not receive any proceeds from the sale; all net proceeds will go to the selling shareholders.
• The selling shareholders are offering their securities to further enhance liquidity in the public trading market for our equity securities in the United States.
• The ADSs currently trade on the NYSE American under the symbol BQ, with the last reported closing price on March 28, 2025, at $2.35.
• Boqii is identified as an emerging growth company and may take advantage of certain exemptions from reporting requirements.
• Investing in Boqii's securities involves significant risks, particularly those related to operating in China and the Variable Interest Entity (VIE) structure.
• The company's operations are primarily conducted through its PRC subsidiaries and VIEs.
• The company recorded net losses of approximately RMB106.0 million and RMB68.9 million for the fiscal years ended March 31, 2023 and 2024, respectively.
• The company recorded net losses of RMB37.7 million and RMB29.6 million for the six months ended September 30, 2023 and 2024, respectively.

Sentiment

Score: 6

Explanation: The document presents a mixed sentiment. While the company highlights cost-saving measures and private label growth, it also acknowledges decreased revenues and net losses. The overall tone is cautiously optimistic.

Positives

• The selling shareholders are offering their securities to further enhance liquidity in the public trading market for our equity securities in the United States.
• Boqii is an emerging growth company and may take advantage of certain reduced reporting requirements.
• The company has a large pet-focused online community in Chinas pet market with approximately 5.3 million and 2.0 million active buyers, respectively, for the year ended March 31, 2024 and the six months end September 30, 2024.

Negatives

• The company will not receive any proceeds from the sale.
• The company has a history of net losses and may continue to incur losses in the future.
• The company's total net revenues decreased by 35.9% from RMB389.4 million for the six months ended September 30, 2023 to RMB249.7 million for the six months ended September 30, 2024.

Risks

• Investing in Boqii's securities involves a high degree of risk.
• There are significant legal and operational risks associated with having substantially all of our operations in China.
• VIE structures pose risks to U.S. investors that are not present in other organizational structures.
• The PCAOB may be unable to inspect or investigate completely our registered public accounting firm and as a result, U.S. national securities exchanges, such as the NYSE American, may determine to delist our securities.
• The PRC government has significant authority in regulating our operations and may influence our operations.
• The PRC government has recently published new policies that adversely affected our industry and our business, and we cannot rule out the possibility that it will in the future further release regulations or policies regarding our industry that could further adversely affect our business, financial condition and results of operations.

Future Outlook

The company plans to continue investing in growing content, improving user experiences, and enriching a pet-focused ecosystem, foreseeing a revolution in pet retail and services in China.

Management Comments

• Mr. Hao Liang, Boqiis Founder, Chairman and Chief Executive Officer commented, Despite persistently pessimistic social expectations and increasingly weak consumption in the first half of fiscal 2025, we have demonstrated our resilience.
• Ms. Yingzhi (Lisa) Tang, Boqiis Co-Founder, Co-CEO and CFO commented, Besides fostering the progress of our private labels, we have implemented cost-saving measures and enhanced efficiency by optimizing our supply chain operations and simplifying our organizational hierarchy in the first half of fiscal 2025.

Industry Context

The announcement reflects the ongoing trend of Chinese companies seeking to enhance liquidity in the U.S. market while navigating complex regulatory environments and economic headwinds.

Comparison to Industry Standards

• It is difficult to compare Boqii directly to global benchmarks due to its unique focus on the Chinese pet market and its integrated online platform.
• However, companies like Chewy in the US and Zooplus in Europe are comparable in that they are large online pet retailers.
• Chewy, for example, focuses on e-commerce and customer service, while Zooplus operates primarily in Europe.
• Boqii's focus on community and content creation differentiates it from these companies.

Related Party Transactions

• From April 2023 to December 2023, the company purchased goods from Jiangsu Nanjing Agricultural University Animal Pharmaceutical Co., Ltd., an equity investee of us until December 2022, in a total amount of approximately RMB3.89 million (US$0.54 million) and we made advance payments totaling RMB5.4 million (US$0.75 million) to Nanjing Animal Pharmaceutical for the purchase of goods.
• In January 2023 and June 2024, we made an advance payment of RMB 5.5 million and 14.2 million to Superb Origin International Limited, our shareholder, for the purchase of goods, respectively.
• As of September 30, 2024, the balance of the advance payment was RMB 18.2 million (US$2.6 million).

Stakeholder Impact

• Shareholders may experience volatility in the ADS price.
• Customers may benefit from the company's focus on private label products and improved user experiences.
• Employees may be affected by cost-saving measures and organizational restructuring.

Next Steps

• The selling shareholders may sell all or a portion of the ordinary shares from time to time in market transactions.
• The company plans to continue investing in growing content, improving user experiences, and enriching a pet-focused ecosystem.

Key Dates

Keywords

Boqii Holding Limited, ADS, American Depositary Shares, resale, selling shareholders, China, pet-focused platform, VIE, emerging growth company, liquidity