IPO Foresight | BOCHE.com: BOCHE, the leader in accident car auctions, once again exploits hidden concerns and challenges under the aura of Hong Kong stocks

The Hong Kong Stock Exchange disclosed on September 30 that Boche Holding Limited (Cayman) (hereinafter referred to as “Boche.com”) submitted another application for listing on the Main Board, with CITIC Securities and Fosun International Capital acting as co-sponsors. It is worth noting that this is the second time in the year that Boche.com has sprinted to the Hong Kong Stock Exchange, and its first prospectus was submitted on February 21. As a leader in the accident car auction industry in China, BoChe Network has attracted widespread attention from the market with its unique business model and market share. However, its continued losses and potential risks to the industry have also added uncertainty to this IPO.

The profit dilemma under the aura of a leader

According to Insight Consulting's report, BoChe Network is the largest accident car auction platform in China, accounting for 31.4% of the market share in 2024, ranking first in the industry. At the same time, the company is also the third largest B2B used car auction platform in China, with a market share of about 12.0%. This dual identity highlights BOCHE's key position in the automotive aftermarket industry chain.

The company's core business is connecting upstream vehicle sources and downstream buyers through an online and offline integrated auction platform. In the field of accident vehicles, the upstream are mainly insurance companies, while the downstream are certified repair shops and certified car dismantling plants; in the used car sector, the company serves various vehicle suppliers and car dealers. As of 2024, the number of cars owned in China has reached 350 million, and the world's largest automobile market has provided broad development space for BOCHE.

Under the leading aura, BoChe Network cannot escape the profit dilemma.

According to financial data, from 2022 to 2024, Boche.com's revenue was 388 million yuan, 518 million yuan, and 526 million yuan respectively. Behind the apparent growth curve, there is a worrying trend — a remarkable 33.5% year-on-year increase in revenue in 2023, which declined sharply to only 1.5% in 2024. This cliff-style decline in growth clearly reflects the growth bottlenecks faced by the company.

A more in-depth analysis revealed that the core business of Boche.com — accident car auctions and supporting services (accounting for 52.5% of 2024 revenue) — experienced a typical “volume increase and price reduction” phenomenon. The number of accident cars auctioned in 2024 reached 117,000, an increase of 72% from 68,000 in 2022, but the average price of a single car fell from 42,700 yuan to 37,600 yuan, and fell further to 37,300 yuan in the first seven months of 2025. This trend suggests that companies may be maintaining market share through price reduction strategies, and the sustainability of this strategy is questionable.

The profit situation of BoChe Network shows two sides of the conflict. During the reporting period, the company recorded losses of 180 million yuan, 122 million yuan, 36 million yuan and 56 million yuan respectively, with a cumulative loss of 394 million yuan over three years and seven months. It is worth noting that losses in the first seven months of 2025 have surpassed the full year of 2024, and the loss margin has widened again. This trend is worrying.

The company mainly attributed these losses to non-cash factors such as changes in the book value of financial instruments and amortization of intangible assets resulting from acquisitions, and emphasized that its “adjusted net profit” performance was good, which was RMB 111 million, RMB 42 million, RMB 51 million and RMB 27 million respectively during the reporting period.

Another indicator worth watching is the fluctuation and decline in gross margin. During the reporting period, the company's gross margins were 44.4%, 49.9%, 46.4% and 39.2% respectively, showing a clear downward trend of fluctuations. In particular, it fell to 39.2% in the first seven months of 2025, down more than 10 percentage points from the high in 2023.

Boche.com's balance sheet also exposes multiple risks. As of July 31, 2025, the company's net current liabilities reached 1,721 billion yuan, a further increase from 1,646 billion yuan in 2022. Behind this abnormal data, financial instruments issued to preferred stock investors were classified as liabilities, with a book value of 1,663 billion yuan as of the end of July 2025.

This financial structure makes the success of a company's listing a matter of life and death — if it is successfully listed, this part of the debt will be converted into equity; if the listing fails, it may trigger redemption obligations and cause a serious liquidity crisis. This “if not successful” capital structure adds significant uncertainty to investment decisions.

The company has established a leading market position in accident car auctions, but this position has not effectively translated into continued profitability and a healthy financial position. Multiple issues, such as slowing growth, profit difficulties, and liquidity pressure, are intertwined, making this IPO more like a “path to survival” rather than a “path to development.”

The scale dividend and growth challenges of the 10 billion racetrack

In the context of the rapid development of China's automobile industry, the segment of accident car auctions is showing huge market potential. According to industry data, the number of accident car auctions in China increased from about 206,000 in 2019 to 345,000 units in 2023, with a CAGR of 13.8%. However, compared with the US market, the number of accident cars auctioned in the US in 2023 is close to 7 million, about 20 times that of China, while the two countries own similar cars (about 290 million units). This significant gap reveals huge room for growth in China's accident car auction industry. The total number of accident car auctions in China is expected to reach 867,000 by 2028, with a compound annual growth rate of 20.2% from 2023 to 2028.

In this rapidly growing market, Boche.com, as an industry leader, has taken a leading position with its unique competitive barriers, but it also faces multiple challenges.

China's accident car auction industry shows a clear pattern of hierarchical competition. In 2023, the largest single player accounted for more than 30% of the market share. The top five players together held about 56% of the market share, while the remaining individual participants had less than 2% of the market share. This pattern is similar to the US market, which is dominated by two giants, Copart and IAA, which together account for about 70% of the market share.

As an industry leader, BoChe Network ranked first with a market share of 31.3% in 2023. This leading position has brought it a significant first-mover advantage, but how to achieve high-quality growth while maintaining market share has become a core issue facing the company.

Furthermore, the rapid spread of new energy vehicles has brought profound changes to the accident car auction industry. The accident rate, maintenance cost, and residual value assessment of new energy vehicles are all significantly different from traditional fuel vehicles. This requires the platform to quickly adapt and establish professional capabilities. In particular, professional technical thresholds such as battery safety and motor maintenance require the platform to invest a large amount of resources to build capacity. Although BoChe Network has begun to be deployed, there is still uncertainty about whether it can keep up with the pace of technological change.

According to the Zhitong Finance App, Boche.com is facing the dilemma of increasing revenue without increasing profit. Although transaction volume continues to grow, bicycle revenue is showing a downward trend, which shows that the company has yet to find the best balance between scaling up and increasing profits.

From an investment perspective, the racetrack where Boche.com is located has clear prospects for growth, and the company enjoys a significant competitive advantage as an industry leader. In the context of an expected 20.2% compound industry growth rate from 2023 to 2028, the company is expected to benefit from industry dividends to achieve continuous growth.

However, investors also need to be aware of the challenges faced by the company, including increased competition, new energy transformation, and pressure on profitability. In particular, in the current capital market environment, investors pay more attention to the profitability and sustainability of enterprises. Whether BOCHE Network can transform its market position into continued profitability will directly affect its performance in the capital market.