F-1/A: Webus International Eyes Nasdaq Listing with 3.75 Million Share IPO

Webus International Limited, a Cayman Islands-based company, is planning an initial public offering of 3.75 million ordinary shares, aiming for a Nasdaq listing under the symbol WETO.

Summary

• Webus International Limited, a Cayman Islands exempted company, is planning an initial public offering (IPO) to list its ordinary shares on the Nasdaq Capital Market under the symbol WETO.
• The company is offering 3,750,000 ordinary shares with an expected initial public offering price between $4.00 and $5.00 per share.
• Webus operates in China through a VIE structure, holding 50% equity interests and 50% VIE Interests in Zhejiang Youba Technology Co., Ltd.
• The company's business model focuses on Mobility-as-a-Service (MaaS), offering customized commuter shuttle, chartered car and bus, and travel services.
• Webus faces risks associated with its VIE structure, PRC regulations, and competition in the collective mobility service market.
• The company submitted filing documents to the CSRC and completed the CSRC filing in compliance with the New Overseas Listing Rules on April 2, 2024.
• The company plans to use approximately $6.0 million of the IPO proceeds to establish a new subsidiary or representative office in the United States, $4.0 million for working capital in China, and the remaining amount for general corporate and working capital purposes.

Sentiment

Score: 5

Explanation: The document presents a mixed sentiment. While the company is pursuing a Nasdaq listing and has growth strategies, it also faces significant risks and challenges, including financial losses, regulatory uncertainties, and competition. The completion of the CSRC filing is a positive development, but the overall outlook is uncertain.

Positives

• Webus has a high degree of digitalization with a self-developed internal business and user management platform.
• The company has abundant and integrated resources, including strategic relationships with key suppliers and online channels.
• Webus offers user-centered services with 24/7 Chinese and English itinerary butler support.
• The company provides diverse and highly customizable travel solutions for different service scenarios.
• Webus has an experienced management team with international vision and specialized experience in the collective mobility service market.

Negatives

• Webus has a limited operating history in a competitive and rapidly evolving industry.
• The company incurred net losses for the years ended June 30, 2022 and 2023 and for the six months ended December 31, 2022 and 2023.
• The company's operation mainly concentrates in one geographic area and it has a substantial customer concentration.
• The company's projections, budgets, and revenues would be adversely affected by increases in labor costs, oil and natural gas prices.
• Newly developed public transportation infrastructure may reduce the demand for the company's commuter shuttle and chartered bus services.

Risks

• The global coronavirus COVID-19 outbreak has caused significant disruptions to the travel industry, which may have negative impact on the company's business, results of operations and financial condition.
• The company is an exempted company incorporated in the Cayman Islands and operates in the United States and in China partially through its subsidiaries and partially through contractual arrangements with the VIE.
• Uncertainties exist as to the company's ability to use foreign currency, including the proceeds it received from this offering, and to capitalize or otherwise fund its PRC operations.
• Changes in China's economic, political or social conditions or government policies could have a material adverse effect on the company's business and results of operations.
• The approval and/or other requirements of the CSRC or other PRC governmental authorities may be required in connection with this transaction under PRC rules, regulations or policies.
• The Chinese government exerts substantial influence over the manner in which the VIE and its subsidiary must conduct their business activities.
• There has been no previous public market for the company's shares prior to this offering, and if an active trading market does not develop you may not be able to resell the company's shares at or above the price you paid, or at all.
• You may face difficulties in protecting your interests as a shareholder, as Cayman Islands law provides substantially less protection when compared to the laws of the United States and it may be difficult for a shareholder of ours to effect service of process or to enforce judgements obtained in the United States courts.

Future Outlook

The company expects a steady growth in oversea tourism demand in the long-term and plans to expand its global service and platform.

Management Comments

• The company's mission is to make mobility easier and smarter by providing customers with customized commuter shuttle, charted car and bus, and travel services around the world through our global platform powered by big data and advanced algorithms.

Industry Context

The document provides an overview of the tourism service industry, including domestic and international travel, and segments by service type and customer group. It also discusses the China domestic tourism services market analysis from 2019 to 2028, the domestic private group services, and the Chinese outbound tourism market.

Comparison to Industry Standards

• The document mentions that there are around a hundred online collective mobility service platforms in China, indicating a highly fragmented market.
• The document references data from the China Tourism Academy, projecting 130 million outbound travelers by 2024, which can be compared to actual figures to assess performance against industry expectations.
• The document cites the "2023 Annual Tourism Consumption Report," indicating that private group tours accounted for 24% of the total number of trips booked in the tourism products segment, which can be used as a benchmark for the company's performance in this area.

Stakeholder Impact

• Shareholders face risks associated with the company's VIE structure and PRC regulations.
• Employees may benefit from the company's growth and expansion plans.
• Customers may benefit from improved services and a wider range of travel options.

Next Steps

• The company needs to secure approval for listing on the Nasdaq Capital Market.
• The company needs to execute its business strategies to expand globally and improve profitability.
• The company needs to monitor and comply with evolving PRC regulations.

Key Dates

Keywords

IPO, initial public offering, Webus International Limited, Nasdaq, ordinary shares, VIE, China, travel services, collective mobility service, WETO