Changzhou Youon poised to be first listed bike-shar­ing com­pany in China

China Daily (Hong Kong) - - BUSINESS - By SHI JING in Shang­hai shi­jing@chi­

Sub­scrip­tions for the ini­tial pub­lic of­fer­ing of Changzhou Youon Pub­lic Bi­cy­cle Sys­tem be­gan on Mon­day, in what will be the first listed bike­shar­ing com­pany in China af­ter it floats on the Shang­hai Stock Ex­change.

Ac­cord­ing to its prospec­tus, Youon is of­fer­ing 24 mil­lion shares at an of­fer price of 26.85 yuan ($4) per share. The IPO aims to raise 644.4 mil­lion yuan, which would value the group at $384 mil­lion.

The pro­ceeds will be used to build a tech­nol­ogy re­search and devel­op­ment cen­ter, sup­ple­ment its fi­nances for man­u­fac­tur­ing and man­ag­ing pub­lic bi­cy­cles and pay down debt, the com­pany said in the prospec­tus.

Youon’s Chair­man Sun Jisheng said dur­ing a road show on Fri­day that the com­pany will ex­pand the num­ber of its users and roll out other green trans­porta­tion ser­vices later with the pub­lic of­fer­ing.

“We will ex­plore value-added ser­vices for the pub­lic bi­cy­cle sys­tem, ex­tend­ing from off­line to on­line and seek new prof­itabil­ity for the com­pany and the in­dus­try,” he said.

Founded in 2010, Youon has at­tracted 20 mil­lion mem­bers na­tion­wide and rolled out 890,000 pub­lic bikes in more than 210 Chi­nese cities and coun­ties. Its ma­jor in­vestors in­clude Shen­zhen Cap­i­tal Group and Alibaba Group’s Ant Fi­nan­cial.

Dif­fer­ing from the high fly­ing pub­lic bi­cy­cle-shar­ing com­pa­nies such as Ofo and Mo­bike, which in­stall smart locks in their bi­cy­cles and have no re­quire­ments for park­ing ar­eas, Youon fo­cuses on pub­lic bi­cy­cles with fixed lock­ing poles and des­ig­nated park­ing lots.

The com­pany pro­vides its bi­cy­cle shar­ing ser­vices in co­op­er­a­tion with gov­ern­ments. Th­ese ser­vices con­trib­uted 100 per­cent to the com­pany’s in­come in 2014 and 2015. That num­ber slightly dropped to 99.88 per­cent by the end of last year as it tapped into the pub­lic bi­cy­cle shar­ing ser­vices, sim­i­lar to that of­fered by Ofo and Mo­bike.

While Ofo and Mo­bike have es­ti­mated their mar­ket caps at $3 bil­lion and $2 bil­lion re­spec­tively, more than 10 times that of Youon, nei­ther has shown any in­ter­est yet in go­ing pub­lic. Mo­bike founder Hu Wei­wei said dur­ing the World Eco­nomic Fo­rum in late June that it is too early to think about a list­ing.

To qual­ify for a list­ing on the Shang­hai bourse, a com- pany needs to make prof­its of over 30 mil­lion yuan over the last three fi­nan­cial years. Youon posted net prof­its of 68 mil­lion yuan, 93 mil­lion yuan and 117 mil­lion yuan in 2014, 2015 and 2016 re­spec­tively. Ofo and Mo­bike have yet to post a profit.

Wang Chun­huan, an an­a­lyst with In­dus­trial Se­cu­ri­ties, said that Youon has a clear and sus­tained profit model. The com­pany fo­cuses on third-tier and lower-rung Chi­nese cities and coun­ties while Ofo and Mo­bike tar­get mainly younger gen­er­a­tions in first- and se­cond-tier cities.

“Given the dif­fer­ences in their busi­ness mod­els, Youon will be lit­tle af­fected by the ris­ing pub­lic bi­cy­cle shar­ing busi­nesses in China,” he said.

Ac­cord­ing to China In­ter­net Network In­for­ma­tion Cen­ter, there were 106 mil­lion pub­lic bi­cy­cle shar­ing users by June. An­a­lysts at the cen­ter said the in­dus­try has be­gun to re­struc­ture, with smaller play­ers elim­i­nated from the com­pe­ti­tion and a trend to­wards fewer and larger play­ers in dom­i­nance.

We will ex­plore value-added ser­vices for the pub­lic bi­cy­cle sys­tem ...” Sun Jisheng, Youon’s chair­man


A vis­i­tor asks about a Youon bi­cy­cle, at the 27th China In­ter­na­tional Bi­cy­cle & Mo­tor Fair in Shang­hai.

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