F-1/A: Webus International Limited Files Amendment No. 10 to Form F-1 for IPO

Webus International Limited has filed an amendment to its Form F-1 registration statement, detailing the terms of its upcoming initial public offering and related resale of shares by selling shareholders.

Summary

• Webus International Limited has filed Amendment No. 10 to its Form F-1 registration statement with the SEC.
• The document outlines the terms for an initial public offering of 2,000,000 Ordinary Shares, with an expected price range of $4.00 to $5.00 per share.
• The company has also granted the underwriters an option to purchase up to 300,000 additional shares to cover over-allotments.
• A resale prospectus is included for the resale of up to 1,750,000 Ordinary Shares by selling shareholders.
• Webus is a Cayman Islands exempted company with operations primarily conducted through a VIE structure in China and a subsidiary in the United States.
• The company is an emerging growth company and will be subject to reduced public company reporting requirements.
• The company is also considered a controlled company under Nasdaq rules due to significant ownership by the Zheng family.
• The company has completed a filing with the CSRC in compliance with the New Overseas Listing Rules.
• The company has experienced a significant decrease in revenue from RMB154,226,006 for the year ended June 30, 2023 to RMB45,976,421 for the year ended June 30, 2024.

Sentiment

Score: 5

Explanation: The document presents a mixed picture. While the company is pursuing growth strategies and has some strengths, it also faces significant challenges and risks, including declining revenue and uncertainties related to its VIE structure and regulatory environment. The sentiment is neutral to slightly negative.

Positives

• The company has applied to list its Ordinary Shares on the Nasdaq Capital Market under the symbol WETO.
• The company has completed the required filing with the CSRC in compliance with the New Overseas Listing Rules.
• The company has a diverse range of travel solutions to meet different customer needs.
• The company has a strong focus on user-centered services and provides 24/7 support.
• The company has a high degree of digitalization with a self-developed internal business and user management platform.

Negatives

• The company has a limited operating history in a competitive and rapidly evolving industry.
• The company 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, with a limited number of customers accounting for a substantial portion of its revenues in the past.
• The company's revenue decreased significantly from RMB154,226,006 in 2023 to RMB45,976,421 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 growth depends on its ability to accurately predict consumer trends and successfully introduce new products and services.
• The company's operation mainly concentrates in one geographic area and it has a substantial customer concentration.
• The company relies on contractual arrangements with the VIE and Individual Registered Shareholders for its operations in China, which may not be as effective as direct ownership.
• The company and the investors may face significant liquidity risks if the laws, regulations or government policies governing its corporate structure or operations change in the future.
• The company may be subject to scrutiny of PRC tax authorities and additional tax may be imposed.
• The Holding Foreign Companies Accountable Act, or HFCAA, and the related regulations might pose regulatory risks to and impose restrictions on the company because of its operations in mainland China.
• The Chinese government may intervene or influence the company's operations at any time or may exert more control over offerings conducted overseas.
• 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 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.

Future Outlook

The company plans to expand its customized tour and chartered car and bus services globally, enhance its technology and innovation, and pursue strategic alliances, acquisitions and investments.

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.
• The company intends to drive the growth of its business by further integrating its platform to a comprehensive ecosystem, enhancing big data and AI innovation, expanding its customized tour and chartered car and bus services around the world, improving product content innovation capabilities, geographically broadening its service coverage, and pursuing strategic alliances, acquisitions and investments.

Industry Context

The company operates in the Collective Mobility Service (CMS) market, which is highly fragmented with around a hundred online platforms in China. The company is an emerging leader in this market, providing customized mobility solutions with real-time AI-augmented online support and 24/7 itinerary management support.

Comparison to Industry Standards

• The company competes with a significant number of online collective mobility service platforms in China, which is a highly fragmented market.
• The company's business model of Mobility-as-a-Service (MaaS) aims to solve inefficiencies associated with inflexible or low-quality mobility solutions.
• The company's diverse travel solutions and customizable options are designed to attract a wide range of customers.
• The company's reliance on third-party platforms and payment processors is common in the industry, but also presents risks.
• The company's focus on technology and innovation is a key differentiator in the competitive market.

Related Party Transactions

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

Stakeholder Impact

• Shareholders will be subject to the risks associated with investing in an emerging growth company with a complex corporate structure.
• Employees may be affected by changes in the company's business strategy and operations.
• Customers may benefit from the company's focus on user-centered services and diverse travel solutions.
• Suppliers may be affected by the company's strategic shift towards the overseas market.

Next Steps

• The company will proceed with the initial public offering of 2,000,000 Ordinary Shares.
• The company will seek to list its Ordinary Shares on the Nasdaq Capital Market under the symbol WETO.
• The company will use the net proceeds from the offering for various purposes, including expansion and working capital.
• The company will continue to monitor the status of COVID-19 and its impact on its operations.

Key Dates

Keywords

IPO, Initial Public Offering, Ordinary Shares, Resale Prospectus, Webus International Limited, VIE, China, Nasdaq, Travel Services, Mobility-as-a-Service, Underwriting, CSRC, HFCAA