F-1/A: Webus International Files for U.S. IPO, Offering 2 Million Ordinary Shares

Webus International Limited, a Cayman Islands-based company, has filed for a U.S. initial public offering, planning to offer 2 million ordinary shares with an expected price range of $4.00 to $5.00 per share.

Summary

• Webus International Limited, a Cayman Islands exempted company, is planning an initial public offering of 2,000,000 ordinary shares.
• The expected initial public offering price is between $4.00 and $5.00 per share.
• The company has applied to list its ordinary shares on the Nasdaq Capital Market under the symbol WETO.
• Webus is an emerging growth company and will be subject to reduced public company reporting requirements.
• The company operates through a complex structure involving a wholly-owned U.S. subsidiary and a variable interest entity (VIE) in China.
• The VIE structure involves unique risks, as investors are not directly purchasing equity in the Chinese operating company.
• Webus offers customized commuter shuttle, chartered car and bus, and travel services.
• The company's revenue for the year ended June 30, 2024 was RMB45,976,421 ($6,326,566), a decrease from RMB154,226,006 in 2023.
• The company has completed the filing with the China Securities Regulatory Commission (CSRC) in compliance with the New Overseas Listing Rules.
• The company plans to use the net proceeds from the offering for expansion in the U.S., working capital in China, and general corporate purposes.

Sentiment

Score: 4

Explanation: The document presents a mixed picture. While the company has growth plans and a focus on technology, the significant revenue decline, reliance on a VIE structure, and regulatory risks in China raise concerns. The company is also an emerging growth company with limited operating history and has incurred net losses. The sentiment is therefore cautiously negative.

Positives

• Webus has a self-developed internal business and user management platform.
• The company has accumulated abundant industry resources through strategic relationships with key suppliers.
• Webus offers diverse and highly customizable travel solutions for different service scenarios.
• The company has an experienced management team with international vision.
• The company has completed the required filing with the CSRC for its overseas listing.

Negatives

• The company has a limited operating history in a competitive and rapidly evolving industry.
• Webus incurred net losses for the years ended June 30, 2023 and 2024.
• The company is mainly concentrated in one geographic area, which increases its exposure to many risks.
• The company has a substantial customer concentration.
• The company's growth depends on its ability to accurately predict consumer trends and demand.
• The company relies on third parties for payment processing and user acquisition.
• The company may face intensive competition on price, quality of services, and technology.
• The company may have difficulty obtaining sufficient financing from commercial banks in China.
• The company's revenue decreased significantly from RMB154,226,006 in 2023 to RMB45,976,421 ($6,326,566) in 2024.

Risks

• The global COVID-19 outbreak has caused significant disruptions to the travel industry, which may negatively impact the company's business.
• The company's corporate structure, involving a VIE in China, presents substantial uncertainties and risks.
• The company relies on contractual arrangements with the VIE, which may not be as effective as direct ownership.
• The shareholders of the VIE may have conflicts of interest with the company.
• The company and investors may face significant liquidity risks due to the VIE structure and operations in China.
• Changes in China's economic, political, or social conditions could adversely affect the company's business.
• Uncertainties in the interpretation and enforcement of Chinese laws and regulations could negatively impact the company.
• The company may be subject to scrutiny by PRC tax authorities, which could result in additional tax liabilities.
• The Holding Foreign Companies Accountable Act (HFCAA) and related regulations might pose regulatory risks to the company.
• The Chinese government may intervene or influence the company's operations at any time.
• There has been no previous public market for the company's shares, and an active trading market may not develop.
• You may face difficulties in protecting your interests as a shareholder, as Cayman Islands law provides less protection than U.S. law.
• The company is an emerging growth company and may take advantage of certain exemptions from reporting requirements.

Future Outlook

The company plans to expand its customized tour and chartered car and bus services globally, particularly focusing on Chinese outbound tourists and overseas Chinese.

Management Comments

• Our 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 company operates in the fragmented online collective mobility service market in China and is expanding its services globally. The company is also subject to the evolving regulatory landscape in China, particularly regarding data security and overseas listings.

Comparison to Industry Standards

• The company competes with numerous online collective mobility service platforms in China, which is a highly fragmented market.
• The company's business model is similar to other Mobility-as-a-Service (MaaS) providers, but it emphasizes customized solutions and a global platform.
• The company's reliance on a VIE structure is common among Chinese companies seeking overseas listings, but it introduces unique risks.
• The company's revenue decline in 2024 reflects a strategic shift towards overseas markets, which is a common strategy for Chinese companies seeking higher margins.
• The company's focus on technology and data analysis is consistent with industry trends towards digitalization and personalization of travel services.

Related Party Transactions

• The company had transactions with related parties, including loans from and to Zheng Jiahua, and accounts received on behalf of the Group by Zheng Nan.

Stakeholder Impact

• Shareholders face risks related to the VIE structure and potential regulatory actions in China.
• Employees may benefit from the company's growth and expansion plans.
• Customers may benefit from the company's diverse and customizable travel solutions.
• Suppliers may benefit from the company's strategic collaborations and expansion plans.

Next Steps

• The company plans to set up a new subsidiary or representative office in the United States.
• The company plans to expand its customized tour and chartered car and bus services globally.
• The company plans to enhance its content production and distribution capabilities.
• The company plans to pursue strategic alliances, acquisitions, and investments.

Key Dates

Keywords

IPO, initial public offering, travel services, collective mobility, China, VIE, variable interest entity, Nasdaq, emerging growth company, chartered car, chartered bus, commuter shuttle, tourism, overseas listing, CSRC, HFCAA