US Stock IPO Outlook | Cash on hand is only 4.2 million euros, how can AIGO.US (AIGO.US) support the US$335 million IPO valuation?

As a leader in the global manufacturing sector, China's total exports broke through the 25 trillion mark for the first time in 2024, reaching 25.45 trillion yuan, and has achieved positive growth for 8 consecutive years. This achievement shows the strong resilience of China's foreign trade industry in the current complex and changing international situation.

And behind this remarkable achievement, it is inseparable from the “capillary network” trade system jointly built by tens of millions of wholesale distributors to accurately deliver high-quality products made in China to every corner of the global market. This includes Aishou Holdings, which has already embarked on the path to listing in the US.

The Zhitong Finance App learned that as early as June 28, 2024, Aibou Holdings submitted an initial public offering (IPO) application to the SEC on August 21 this year, and updated its prospectus on September 5 to continue promoting the company's IPO process.

According to the prospectus, Aishou Holdings is a global consumer goods supplier from Fuzhou, China. It plans to list on the NASDAQ under the stock code “AIGO”. The company wants to issue 2 million shares at a price of 4 to 6 US dollars per share in this IPO, and the capital raised is expected to reach 10 million US dollars. Based on the median issue price range, the company's IPO valuation will reach US$335 million.

Continue to cultivate the European market, and both revenue and profit will increase in 2024

Since starting operations in Europe in 2011, Aishou Holdings has been deeply involved in the cross-border trade industry for more than 14 years. The company has built a huge ecosystem, and its business covers more than 40 countries and regions on four continents.

In terms of products, Aibou Holdings's product line covers four major categories: lighting products, electrical products, household appliances, and pet supplies, and the company operates three independent brands. Among them, AIGOSTAR focuses on smart lighting and household products, NOBLEZA focuses on pet products, and Taylor Swoden focuses on the field of small household appliances.

This multi-brand strategy enables iBuy to cover different consumer groups and price ranges, creating a synergy effect. By the end of 2024, the company had more than 6,000 SKUs. In addition, IoT products are one of the strategic priorities of iBuy Holdings. As of December 31, 2024, the company had more than 400 products integrated with the Internet of Things, but the revenue share of this series of products is still low, accounting for only 2.6% of total revenue in 2024.

In terms of sales channels, Aishou Holdings uses a combination of online and offline models. In the offline channel, the company has set up sales teams in many parts of Europe, which allows the company to have more than 10,000 local customers in Europe. Among them, 207 chain stores sell Aishou Holdings products as of 2024. In online sales, Aishou Holdings operates an online store selling the company's products on more than 20 major global e-commerce platforms, including Amazon. In 2023, Aibou Holdings' offline and online channels accounted for 50.8% and 48.3% of total revenue, respectively. By 2024, the ratio was 55.8% and 43.5%, respectively.

In terms of geography, Aishou Holdings has now formed a global layout with operations spanning Europe, Asia, North America, Latin America, and Africa. In 2024, revenue came from about 40 countries and regions on four continents, mainly the EU market, accounting for about 84% of revenue. Of these, Italy, Spain, and Germany accounted for 25.4%, 35.1%, and 10% of revenue, respectively. Additionally, the US market accounts for 4.2% of revenue.

In terms of supply chain system construction, about 90% of Aibou Holdings' suppliers in mainland China make full use of the cost and efficiency advantages of Chinese manufacturing, and the company operates a total of 12 local warehouses in Europe and China. This “front warehouse” layout enables it to respond quickly to market demand. In 2024, the European warehouse's next-day delivery service covered more than 60% of offline customers.

Judging from the performance, benefiting from the revenue of the four major series of products, the total revenue of Aibou Holdings increased by 17.58% to 178 million euros in 2024. On this basis, the company improved operating efficiency, and sales and marketing expenses fell year-on-year. This reduced the ratio of total operating expenses to 44.4% of total revenue from 48.4% in 2023. This accelerated the release of net profit. Therefore, Aibou Holdings' net profit after foreign currency conversion adjustments in 2024 was 5.651 million euros, an increase of 50.57% year on year, achieving revenue and adjusted net profit Double growth.

Online sales are highly dependent on Amazon, and the global layout needs to be accelerated

From an industry perspective, the transition of Chinese products to the international market is a broad track with great prospects for development. As the global economy gradually recovers and the consumer market continues to expand, the international market's demand for cost-effective and high-tech products in the international market will continue to increase.

According to iResearch data, in 2023, the market size of the consumer goods industry in southern Europe was 3.9 trillion euros, accounting for 4.6% of the world. It is expected that by 2028, the market size will further grow to 5.2 trillion euros, with a compound annual growth rate of 5.8% from 2023 to 2025.

Looking specifically at product categories, the market size of the lighting industry, electrical products industry, household appliances industry, and pet products industry in the southern European market was 1.7%, 3.3%, 7.3%, and 6.6% respectively from 2023 to 2028. The steady growth in the market size of various products will allow Aishou Holdings, which continues to be deeply involved in the Southern European market, to benefit from it.

However, there are not a few potential operating challenges faced by Aishou Holdings. First, online sales channels are highly concentrated on a single platform. According to the prospectus, iBuy Holdings currently sells the company's products through more than 20 major global e-commerce platforms, but about 85% of the revenue from online sales comes from the Amazon platform. This reliance on a single platform poses a potential risk. Once the platform policy is adjusted, it may have an impact on the business.

Second, the operation of an independent brand will place higher demands on the operation of Aishou Holdings. Although independent brands are higher than other products in terms of profitability, Aishou Holdings will also spend more money on the promotion and marketing of its own brands. This is a key reason why Aishou Holdings' sales and marketing expenses account for as much as 40% of the company's total revenue. If market competition continues to intensify, then Aibou Holdings may increase its spending on sales and marketing expenses, which may have an impact on the company's profitability.

Moreover, most of Aishou Holdings' current revenue comes from the EU market. In 2024, the company's revenue share from the EU market was as high as 84%. Such a high ratio, if demand in the European market slows down or changes in the international situation have an impact on demand, it may have an impact on Aishou Holdings' operations. Further accelerating the global layout and diversifying the regional concentration of business will become a necessary path for the long-term steady development of Aishou Holdings.

Furthermore, Aibou Holdings' current capital flow is relatively tight. As of December 31, 2024, the total assets of Aibou Holdings were 132 million euros, total liabilities were 102 million euros, and the balance ratio was 77.27%. The balance ratio was at a relatively high level. The current ratio was 1.21, and the cash on hand was only 4.2 million euros. This is probably also the key reason why Aibou Holdings accelerated its listing in the US.