F-1/A: Webus International Limited Files for IPO, Aiming to List on Nasdaq

Webus International Limited, a Cayman Islands-based company, is pursuing an initial public offering to list its Ordinary Shares on the Nasdaq Capital Market.

Summary

• Webus International Limited is planning an IPO to list on the Nasdaq Capital Market under the ticker 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, which involves unique risks for investors as they are purchasing equity interests in the Cayman Islands exempted company, not directly in the Chinese operating entity.
• The company intends to use the net proceeds from the offering for various purposes, including setting up a new subsidiary in the United States, working capital for China operations, and general corporate purposes.
• The company faces risks related to its VIE structure, doing business in China, and the potential impact of COVID-19 on the travel industry.

Sentiment

Score: 5

Explanation: The document presents a balanced view, highlighting both the opportunities and risks associated with the company and its IPO. The VIE structure and regulatory uncertainties in China contribute to a neutral sentiment.

Positives

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

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, 2022 and 2023, and for the six months ended December 31, 2022 and 2023.
• The company is mainly concentrated in one geographic area, increasing its exposure to various risks.
• The company has a substantial customer concentration, with a limited number of customers accounting for a significant portion of its revenues.
• The company's growth depends on its ability to accurately predict consumer trends and demands, and successfully introduce new products and services.

Risks

• The global coronavirus COVID-19 outbreak has caused significant disruptions to the travel industry, which we expect may have negative impact on our business, results of operations and financial condition.
• We are an exempted company incorporated in the Cayman Islands. As a holding company with no material operations, our operations were conducted by 1) our wholly-owned subsidiary Wetour in the United States; 2) our direct investment in Youba Tech and its subsidiary; and 3) through VIE Agreements with Youba Tech. There are substantial uncertainties regarding such corporate structure.
• Uncertainties exist as to our ability to use foreign currency, including the proceeds we received from this offering, and to capitalize or otherwise fund our PRC operations, which could materially and adversely affect our liquidity and our ability to fund and expand our business.
• 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, and, if required, Webus cannot predict whether or how soon it will be able to obtain such approval.
• The Holding Foreign Companies Accountable Act, or HFCAA and the related regulations might pose regulatory risks to and impose restrictions on us because of our operations in mainland China.

Future Outlook

The company plans to expand its customized tour and chartered car and bus services around the world, improve product content innovation capabilities, geographically broaden its service coverage, and pursue strategic alliances, acquisitions, and investments.

Industry Context

The company operates in the Collective Mobility Service (CMS) market in China, which is highly fragmented with around a hundred online platforms. The company also operates in the global customized tour and chartered car and bus service market.

Comparison to Industry Standards

• The document mentions competition with traditional local and international travel agencies, airlines, hotels and tourist attraction sites.
• The document mentions competition with online collective mobility service platforms in China.
• The document mentions strategic collaborations with large online travel platforms as their vertical business supplier, cooperating with local bus and car rental companies, and increasing online marketing and short video traffic advertising.
• The document mentions working with large traditional travel agencies and online platforms around the world (such as Alaska Skylar Travel LLC, Alaska Aurora Travel LLC, Expedia TAAP, Viator Partner, and Mei Tour) as well as online bus booking platform gotobus.

Related Party Transactions

• The document mentions related party transactions with Zheng Jiahua and Hangzhou Yinuo Technology Co., Ltd.

Stakeholder Impact

• Shareholders face risks related to the VIE structure and regulatory uncertainties in China.
• Employees may benefit from the company's growth and expansion plans.
• Customers may benefit from improved services and product offerings.
• Suppliers may benefit from increased business opportunities.

Next Steps

• The company needs to secure the listing on the Nasdaq Capital Market.
• The company needs to complete the filing procedures with the CSRC prior to listing on Nasdaq.
• The company needs to execute its business plan and use the proceeds from the offering effectively.

Key Dates

Keywords

IPO, Webus International Limited, Ordinary Shares, Nasdaq, VIE structure, China, Travel services, Collective Mobility Service, WETO