Our operations span across our cross-border social e-commerce business and FMCG paper packaging business. Founded in 2003, we set out on providing one-stop paper packaging products and services to FMCG enterprise customers, focusing on providing marketing strategies, product design, process design, technology planning, transportation and logistics. As the core of our paper packaging business is essentially grounded in product design and marketing that ultimately center around addressing end consumers’ needs and spur their purchase desires, we have accumulated deep understanding and experience in both product marketing and discerning consumer demands. Seeking to expand our business beyond our decades-long paper packaging business, we seized the business opportunities from the burgeoning of cross-border e-commerce driven by the development of the mobile Internet by building our cross-border social e-commerce business in 2017, which has become our major source of revenue.
After our listing on the SZSE in 2016, supported by the leadership and industry experience of our management team, we successfully transformed and diversified our business while attaining achievements from both business and financial perspectives. As a leading cross-border social e-commerce company strategically focusing on the Asian market, we ranked second among China’s B2C outbound e-commerce players based on revenue generated through social media e-commerce business in Asia in 2024, with a market share of 1.3%, according to CIC. Furthermore, we are a leading FMCG paper packaging company in Mainland China, and ranked first among FMCG paper consumer packaging companies in Mainland China based on revenue in 2024, with a market share of 1.2%, according to CIC.
For each year of the Track Record Period, our total revenue amounted to RMB5,375.9 million, RMB6,694.7 million and RMB5,529.3 million, respectively. For each year of the Track Record Period, our profit amounted to RMB171.6 million, RMB332.1 million and RMB184.5 million, respectively.
Our Cross-Border Social E-Commerce Business
Empowered by data insights and technology and capitalizing on a new era of cross-border e-commerce through the mobile Internet, we adopt a social e-commerce business model that discovers target customers actively and precisely. Under this model, we deploy our dynamic data analytical capabilities to perform precise product discovery and recommendation, place targeted advertisements online to attract consumers from social media traffic to our landing pages, which are transactional web pages that pop up in response to a user’s click on a link or advertisement displayed on a social media platform, and ultimately market and sell affordable and high-quality products from Mainland China to overseas consumers around the world. We primarily place advertisements on social media platforms to attract customers, without operating our own platform or mobile apps. We provide a wide array of products, including household products, apparel products, electronic products, footwear products, luggage and bag products, cosmetic and personal care products, healthcare products, maternity and baby products, and watches and accessories. For each year of the Track Record Period, revenue generated from sales of (i) household products was RMB834.0 million, RMB1,111.4 million and RMB932.0 million, representing 26.8%, 26.1% and 27.7% of our total revenue of cross-border social e-commerce business, respectively; (ii) electronic products was RMB381.7 million, RMB766.3 million and RMB790.5 million, representing 12.3%, 18.0% and 23.5% of our total revenue of cross-border social e-commerce business, respectively; (iii) apparel products was RMB549.2 million, RMB1,033.1 million and RMB615.3 million, representing 17.7%, 24.3% and 18.3% of our total revenue of cross-border social e-commerce business, respectively; and (iv) cosmetic and personal care products was RMB356.7 million, RMB334.9 million, and RMB328.2million, representing 11.5%, 7.9% and 9.8% of our total revenue of cross-border social e-commerce business, respectively.
We also sell products ranging from electric bikes, lingerie, UV umbrellas and pet accessories under our own brands including SENADA BIKES, Veimia, Konciwa and PETTENA, on our designated brand websites and e-commerce platforms. For each year of the Track Record Period, revenue generated from our own brands accounted for less than 4% of our total revenue. Our cross-border social e-commerce business connects suppliers in Mainland China with consumers across Asia, as well as Europe and North America. For each year of the Track Record Period, revenue from our cross-border social e-commerce business accounted for 57.8%, 63.6% and 60.9% of our total revenue, with its gross profit margin amounting to 59.1%, 63.1% and 60.5%, respectively. The high gross profit margin of our cross-border social e-commerce business has become the key driver of our gross profit margin, as a whole, which, for each year of the Track Record Period, reached 40.5%, 46.4% and 43.8%, respectively.
Leveraging AI algorithms and models, we self-developed our Giikin system specifically for our cross-border social e-commerce business. Through the AI applications integrated into our Giikin system, we seamlessly connect every stage of our business process with limited human intervention, from product discovery, advertisement placement, product procurement to transportation and logistics.
During the Track Record Period, we had fulfilled more than 41 million orders for approximately 17.0 million consumers, and had more than 611,000 SKUs. In 2024, our ROI was 191.1%, which was higher than the industry average, according to CIC. For each year of the Track Record Period, our order fulfillment rate ranged from 84.9% to 88.4%. We maintain close cooperation with well-known enterprises to conduct R&D in AI applications in e-commerce. As of March 31, 2025, we owned 4 patents and 140 software copyrights in relation to the development of algorithms, software systems, and other technology for our cross-border social e-commerce business. We are among the first companies empowering their business with AI technology in Mainland China, according to CIC. As testament to our industry recognition, we were awarded Global Pioneer (全球領航獎) by TikTok for Business in 2023.
Our cross-border social e-commerce business is equipped with excellent operation and inventory management capabilities. For each year of the Track Record Period, the inventory to sales ratios of our cross-border social e-commerce business amounted to 3.7%, 3.2% and 4.0%, respectively, which were below the industry average, according to CIC.
Our Paper Packaging Business
We are among a limited number of FMCG paper packaging companies in Mainland China that have the capability to provide one-stop paper packaging products and services covering the entire production process. With process design and technology planning at the crux of our competence, we integrate marketing strategies, product design, process design, technology planning, transportation and logistics into our all-inclusive paper packaging products and services, and continuously pre-empt consumer needs by innovating in materials, designs and products. Exemplifying our commitment to environmental protection and ESG principles, we prospectively invested in developing environmentally friendly packaging, following the global prevalence of restrictions on plastic use. Over the years, we have established and maintained long-term cooperation with leading FMCG companies, laying a solid foundation for generating stable revenue and cashflows through our paper packaging business.
Leveraging our professional service, our paper packaging business continued to exhibit steady growth during the Track Record Period. We have established close cooperation with well-known FMCG enterprises, such as Yili and Luckin Coffee, and a number of QSR (quick-service restaurant) companies with operations in Mainland China. Our production volume of paper packaging business witnessed a continuously increasing trend during the Track Record Period, from 846.7 million sq.m. for 2022 to 925.3 million sq.m. for 2023, and further to 1,026.1 million sq.m. for 2024. For each year of the Track Record Period, we achieved production utilization rates of approximately 63.2%, 55.7% and 56.2%, respectively, for our packaging products. We are also capable of managing our packaging inventory in an efficient manner. For each year of the Track Record Period, the inventory turnover days of our paper packaging business amounted to 58.7 days, 57.4 days and 54.5 days, respectively, which were below the industry average, according to CIC. As of March 31, 2025, we owned 362 patents and 17 software copyrights in relation to the design and manufacture of packaging for our paper packaging business. As testament to our industry recognition, we ranked fifth in the “Top 100 Chinese Printing and Packaging Enterprises” published by Printing Manager Magazine in 2022.
Source: Jihong Company (02603) Prospectus (IPO Date : 19/05/2025) |