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Recently, unmanned retail operator Beijing Ubao Online Technology Co., Ltd. (hereinafter referred to as "Ubao Online") officially submitted a prospectus to the Hong Kong Stock Exchange and applied for an IPO. In the era of the rise of unmanned retail, Youbao Online, a "fashion darling", is favored by capital.
Ubao Online was listed on the New Third Board on February 24, 2016. In the second half of 2016, it was selected as an innovation-level enterprise and transferred by agreement. It was delisted on March 12, 2019 and began to sprint towards the Hong Kong Stock Exchange. This time This is the third time Uba Online has submitted a form to the Hong Kong Stock Exchange.
Three attempts at the Hong Kong Stock Exchange
It is understood that Ubao Online had planned to be listed on the GEM in December 2016, but the counseling was terminated in February 2021, and the GEM listing plan was not completed. Before this IPO, Ubao Online submitted a form to the Hong Kong Stock Exchange for the first time on May 27, 2022, but the form failed.
Then, on December 16, Youbao Online submitted a form to the Hong Kong Stock Exchange again. Due to the extremely slow process of the Hong Kong Stock Exchange, Youbao Online still failed to go public for a long time. So far, Ubao Online’s two IPOs on the Hong Kong Stock Exchange have failed.
In 2011, Wang Bin, who had served as Sina's vice president for many years and was responsible for wireless business, founded Ubao Online and became one of the first professional vending machine operators in China. Use cloud platform management and offline smart operation models to promote retail intelligence, establish a point-of-sale network covering schools, factories, offices, etc., and provide smart services to relevant merchants.
In terms of revenue, Ubao's online revenue in the first half of 2019-2023 was 2.727 billion yuan, 1.9 billion yuan, 2.676 billion yuan, 2.519 billion yuan, and 1.253 billion yuan respectively. The revenue growth rates from 2020 to 2022 were respectively They were -30.25%, 40.69%, -5.87%, and the growth rate fluctuated greatly. In terms of profits, Ubao Online’s net profits were 40 million yuan, -1.184 billion yuan, -188 million yuan, 283 million yuan, and -147 million yuan respectively, and it has continued to suffer losses in the past three years.
Source: Ubao Online Prospectus Data Monkey Chart
From the perspective of net interest rate, Youbao Online’s net interest rate has reached negative values many times in the past five years, with large fluctuations. In 2020, it will reach -62.25%.
Source: Ubao Online Prospectus Data Monkey Chart
The gross profits of Ubao Online in the first half of 2019-2023 were 1.329 billion yuan, 559 million yuan, 1.1 billion yuan, and 1.077 billion yuan respectively; the gross profit margins were 48.7%, 29.4%, 41.1%, and 42.7% respectively. The gross profit margins in 2020 are shown Compared with 2020, the downward trend will maintain an upward trend in the first half of 2021-2023.
Source: Ubao Online Prospectus Data Monkey Chart
From the perspective of cost structure, Ubao Online's sales costs from 2021 to the first half of 2023 were 1.575 billion yuan, 1.442 billion yuan, and 735 million yuan respectively; sales and marketing expenses were 1.156 billion yuan, 547 million yuan, and 545 million yuan respectively; General and administrative expenses were 123 million yuan, 127 million yuan, and 95 million yuan; research and development expenses were 37 million yuan, 32 million yuan, and 15 million yuan respectively. Among them, Ubao Online's sales costs account for the majority of its expenditures, but both sales costs and R&D expenses show a downward trend.
Source: Ubao Online Prospectus Data Monkey Chart
Unmanned retail carries the banner
From the perspective of business structure, Ubao Online’s main businesses include unmanned retail business, advertising and system support services, commodity wholesale business, and vending machine sales and leasing services to operators at non-Ubao locations. Other businesses include mobile device distribution services, mini KTV services, mini KTV sales and rentals and mini KTV operation system support in mainland China.
Uba Online Platform and interaction with major players Source: Uba Online Prospectus
It can be learned from the prospectus that among the four main businesses, unmanned retail business occupies an important position in its main business, but the vending machine sales and leasing business is showing a revenue growth trend, and may become the main business of Ubao Online Second growth curve.
Source: Ubao Online Prospectus Data Monkey Chart
1. Unmanned retail
Ubao Online's revenue from its unmanned retail business mainly comes from the retail sales of goods (including drinks and snacks) through its vending machines. Ubao Online's vending machines mainly include pick-and-pick containers, beverage vending machines, beverage and snack vending machines, and ready-made beverage vending machines.
From 2021 to the first half of 2023, Ubao Online’s unmanned retail business operating revenue was 1.915 billion yuan, 1.974 billion yuan, and 987 million yuan respectively. If Ubao Online maintains the current growth trend, it is expected that the unmanned retail business revenue in 2023 may be It can be the same as 2022.
In terms of gross profit margin, the gross profit margin of unmanned retail business has been 46.40%, 45.10%, and 45.00% respectively in the past three years. The gross profit margin of unmanned retail business has grown rapidly in the first half of 2023 and is almost on the same trend as that of the whole year of 2022. .
2. Advertising and system support services
Ubao Online provides advertisers with digital advertising services that promote customer traffic and sales, mainly including display advertising services, post-payment advertising services, product display advertising services and machine advertising services. This is also the source of its advertising service revenue. In addition, Ubao Online also provides operation system support to non-Ubao Online point operators, allowing point operators to connect machines to Ubao Online's operation system, allowing them to obtain multiple functions, including real-time monitoring of machine operations. status, and receive replenishment reminders and replenishment route and schedule suggestions.
In the first half of 2021-2023, Ubao Online's advertising and system support service revenue were 243 million yuan, 194 million yuan, and 56 million yuan respectively; its gross profit margins were 75.9%, 82.5%, and 98.8% respectively. It can be seen that the gross profit margin of the advertising and system support services business in the first half of 2023 is very high. However, the business is declining rapidly.
3. Wholesale of goods
Ubao Online's commodity wholesale business mainly provides commodity wholesale to commodity wholesale customers and certain non-Ubao point operators. In the first half of 2021-2023, the revenue of this business will be 44 million yuan, 34 million yuan, and 12 million yuan respectively; the gross profit margin will be 7.3%, 4.0%, and 3.6%.
4. Vending machine sales and leasing
Youbao Online sells, leases or provides vending machine hardware support services to non-Youbao point operators. UBo Online provides hardware support services including machine installation and maintenance services. In the first half of 2021-2023, the revenue of this business is 433 million yuan, 185 million yuan, and 87 million yuan respectively; the gross profit margin is 31.4%, 31.9%, and 27%.
Source: Ubao Online Prospectus Data Monkey Chart
From the above business structure analysis, we can see that the revenue generated by Ubao Online's unmanned retail accounts for more than 70% of its total revenue, which is Ubao Online's main source of income. For the unmanned retail industry, the number of points (points of sale) is particularly important.
There is a wolf in front and a tiger behind
In the wave of unmanned retail, Ubao Online has been widely recognized by the primary market. Since its establishment, it has conducted more than ten rounds of financing. Investors include Huazhu, Carlyle Capital, CICC Capital, Intime Capital, Haier Capital, and Primavera Capital. Capital, CCB International, etc. In 2019, Ant Group spent 1.2 billion yuan to participate in the capital increase of Ubao Online and is currently the company's second largest shareholder, holding 16.68% of the shares.
With the support of capital, UBo Online expanded rapidly and became the leader in the unmanned retail industry. In the fierce battle of unmanned retail, the most important point of victory or defeat is not the technology, but the supply chain, management and points.
In terms of point layout, Ubao Online has established an extensive network of sales points (points) covering core consumption scenarios such as schools, factories, offices, public places, transportation hubs, restaurants, etc. As of June 30, 2023, Uba Online has 61,888 points, covering 157 cities and 28 provincial administrative regions in mainland China, 87.3% of which are concentrated in first-tier, new first-tier and second-tier cities. During the same period, Uba Online has It operates 106 warehouses and 212 sorting centers.
As of September 30, 2022, Ubao Online's point network is 87,565, covering 288 cities and 31 provincial administrative regions in mainland China, and has established 145 warehouses and 223 sorting centers.
In other words, in 9 months, the number of Ubao Online points has been reduced by nearly 26,000, and the number of points across the city has also been significantly reduced by 131. Correspondingly, the number of warehouses and sorting centers has also been reduced by 39 and 11 respectively. This is mainly due to the impact of the epidemic on passenger flow in offline consumption scenarios (especially restaurants).
In the past three years, the reduction in traffic caused by the epidemic has been a heavy blow to the unmanned retail industry. It has also had a huge impact on Ubao Online, which relies on offline scenarios, causing it to continue to lose money. Since 2023, offline consumption has recovered, commercial traffic has recovered, long queues have returned to restaurant stores, and the tourism market has been extremely hot, but it still has not been able to turn Ubao Online from losses to profits.
Although the single-point revenue in 2023 will increase significantly compared with the same period last year and return to a level close to 2019, the number of points still cannot stop the downward trend. From January to June 2023, Ubao Online’s revenue was 1.253 billion yuan, a year-on-year increase of 9.6%, net profit was -147 million yuan, and losses increased by 19 million yuan compared with the same period last year.
It is worth noting that in the industry, China’s top five vending machine operators, except for the eldest Youbao Online, the other four are cross-industry rivals, including beverage giant Nongfu Spring, express delivery giant SF Express, etc. Such wrong-dimensional competition has created difficulties for Youbao. Bao Online brings tremendous pressure.
Therefore, in order to break free from the abyss of losses, Youbao Online began to adjust its business. In terms of location layout, Youbao Online began to focus on first-tier and new first-tier cities. In various major scenarios, the proportion of targeted locations such as schools, factories, offices, and restaurants has increased overall, while the proportion of locations in public places and transportation hubs has shown a downward trend.
In terms of business exploration, Ubao Online began to invest in mini KTV. In 2016, the company that acquired Youshang M-bar entered the mini KTV field and became one of the industry's top two companies. But obviously, the transformation results did not meet expectations. At the end of 2019, the number of mini KTV spots under the company reached 6,410, and has declined year by year since then, with only 3,356 remaining at the end of June 2023. With the large-scale decline of diversified vending machines, the mini KTV business not only failed to help the company increase its business value, but also affected its performance.
Under heavy pressure, starting from 2020, Youbao Online will shift its focus from direct sales to partner positions similar to the franchise model.
Ubao Online's business model is specifically divided into two types: direct operation model and partner model. The direct operation model is easy to understand. It is owned and operated by itself. The partnership model includes two types: point partners and non-Ubao point operators.
Point Partners means that Ubao Online hires point partners (mainly composed of individual companies with past experience in the vending machine business and industry knowledge) to assist Ubao Online in finding and establishing points, and at the same time manage the operations of the points. Point partners usually have the right to receive a share of the total transaction volume after deducting the fees and costs they are responsible for, and have the incentive to mobilize resources to set up vending machines at the best points.
Non-UBO location operators (mainly composed of individuals and small and medium-sized enterprises that operate vending machines connected to UBO Online’s operating system) can choose to purchase or rent UBO Online’s vending machines or use its own vending machines. Cargo planes sell merchandise. Ubao Online provides hardware support and operating system support to non-Ubao point operators, namely advertising and system support business and vending machine sales and leasing among Ubao Online's main businesses.
As of the end of June 2023, there were 50,699 Ubao locations under the partnership model, accounting for more than 80%. However, from 2020 to 2022 and the first half of 2023, Partner Ubao has withdrawn 3,434, 8,941, 31,994, and 8,959 locations. This huge change in business model did not bring profits to Ubao Online. On the contrary, it caused a downward trend in Ubao Online.
In the past, there was a bit of contraction, unable to escape the terrible dilemma of losing money. Later, competitors accelerated their efforts to catch up and share the tense situation in the market. Ubao Online's current situation is worrying.
Unmanned retail may become a new development trend
As one of the new species in the retail industry, the emergence of unmanned retail has changed the industry ecology, realized the digitization of the entire industry chain, fundamentally reshaped the relationship between people and goods, and has become an important branch of the new retail system.
The total sales of the unmanned retail market will increase from RMB 13.586 billion in 2017 to RMB 29.917 billion in 2022, with a compound annual growth rate of 17.1%. It is estimated that the total sales of the unmanned retail market will reach RMB 75.578 billion in 2027, with a compound annual growth rate of 20.4% from 2022 to 2027. As shown in the table below, the market share of vending machine sales in the unmanned retail market will remain at a level above 93.5% from 2017 to 2022.
Source: Ubao Online Prospectus
In the unmanned retail business model, vending machines play an important role in the overall market. In 2022, the number of vending machines in mainland China will reach 1.1166 million units, and the compound annual growth rate from 2017 to 2022 will be approximately 26.1%. The total vending machine retail market is expected to reach 2.5356 million units in 2027. From this point of view, the unmanned retail industry may become the mainstream consumption model in the future.
In order to have a more comprehensive and in-depth understanding of the overall situation of UBO Online, we will do a SWOT analysis on it.
On the whole, UBo Online needs to take a series of strategic measures to achieve long-term sustainable development.
First of all, Ubao Online’s deep experience and market leading position are its important advantages. This means that it has strong expertise in unmanned retail technology and operations and can build a trustworthy brand reputation in the market. However, the loss problem and profit problem are issues that need to be solved urgently. Ubao Online needs to formulate a wise profit strategy, and may need to re-evaluate its price strategy, reduce costs and explore more sources of profit to achieve sustainable operations.
At the same time, Ubao Online needs to more actively manage its location resources. The number of spots has dropped sharply and the partnership model is under threat, which could pose risks to the company's profitability and expansion plans. Therefore, the optimization of point management, including optimization of lease management and point distribution, is crucial to the success of Ubao Online.
When facing the challenges of market competition, Ubao Online may consider establishing strategic partnerships with other companies to share resources and technology and improve competitiveness. In addition, going public provides Ubao Online with opportunities to raise funds and enhance its brand, which can be used for marketing and technological innovation to fend off threats from competitors.
In terms of opportunities, Ubox can take full advantage of the promising prospects of the unmanned retail industry, especially with the continuous development of artificial intelligence and Internet of Things technologies. Companies should continuously invest in R&D and technology upgrades to improve product performance and user experience. At the same time, diversifying products and services to meet different customer needs is also a potential growth opportunity.
Finally, UBo Online needs to establish an effective risk management system and carry out long-term planning to deal with market fluctuations and uncertainties. Clear strategic goals and plans will help it grow steadily in a highly competitive market.
Overall, Ubao Online has huge potential in the field of unmanned retail, but it needs to solve profitability issues, improve point management, strengthen competitiveness, make full use of market opportunities, and establish effective risk management and planning mechanisms. Through comprehensive strategic efforts, UBo Online is expected to achieve long-term sustainable development and maintain its leading position in the highly competitive market.
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Text: Yuanyuan / Data Yuan
