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An electric toothbrush is enough to support an IPO.
According to reports, Xiaomi electric toothbrush supplier Sushi Technology applied for listing on the Growth Enterprise Market and has now launched a listing inquiry, and its sponsor and main underwriter are China Merchants Securities.
As a representative of health "technology" products in recent years, electric toothbrushes have become the "seaters" of many KOLs with goods, with prices of tens to hundreds, so that Many brands such as Usmile and Philips have sold more than 10,000 yuan per month.
In a market worth more than 50 billion yuan, Sushi Technology has run out of a certain scale with its back to the big tree of millet.
According to the prospectus, Sushi Technology's public offering of new shares does not exceed 10 million shares, accounting for no less than 25% of the total share capital after the issuance, and the amount of funds raised is about 775 million yuan, mainly for product upgrading, brand marketing and promotion, and research and development center construction.
If this listing is successful, Sushi Technology will take the lead in becoming the "first stock of electric toothbrush". And Lei Jun will also harvest another listed company from the Xiaomi ecological chain.
In 2019, the National Health Commission issued the "Healthy Oral Action Plan (2019-2025)", which set the caries rate of 12-year-old children in 2025 to be controlled within 30%, and the brushing rate of adults twice a day increased to 45% and other 5 indicators.
The program hopes to improve the brushing rate so that consumers pay more attention to oral health, on the one hand, let the personal care market see the huge market "cake" in the future, on the other hand, let the oral related industries smell the outlet.
Sushi Technology's seizure of the "first share of electric toothbrushes" will accelerate the development of the industry, or usher in an industry reshuffle.
Backed by the xiaomi ecological chain, how much is the sushi with annual sales of one million pieces? Who is the winner of the "Station of a Thousand Brushes" with many brands? Can Sushi Technology "capture" the heart of capital with electric toothbrushes?
And see the following disassembly.
The craze for electric toothbrushes: the lure of 50 billion
Electric toothbrushes have been available as early as the end of the last century, but until recent years, with the improvement of people's living standards, oral health problems have gradually attracted attention.
Oral problems such as bad breath, yellow teeth, caries, and calculus began to be consciously dealt with and gave birth to a subdivision of the economic track, and the oral economy was very hot.
Electric toothbrush belongs to the oral cleaning equipment track, after more and more professionals began to "popularize" scientific brushing methods, "technology", "effective", "affordable", "high value" and other keywords to aggregate the electric toothbrush has also become a single product sought after by the public, the same as the teeth cleaner and so on.
According to Tianyancha data, from January to April 2019, electric toothbrushes in third-tier cities and below increased by 228% compared with the same period in 2018, while in 2021, the increase rate was 325% over the same period in 2020.
Consumers are increasingly recognizing electric toothbrushes, and the market potential has risen from 1.2 billion in 2011 to 50 billion in 2021.
Similarly, electric toothbrush brands are also increasing.
According to the data of Tianyancha, as of January 12, 2022, there are more than 80,000 electric toothbrush-related enterprises in Chinese mainland, and Sushi Technology relies on the Xiaomi ecological chain to stand out from the crowd, and in the face of the huge market, it has raised 775 million yuan to accelerate the fast running, stabilize the market pattern, and have great ambitions.
So what does Sushi Technology rely on?
Revenue is good: but trapped in "millet dependence"
Founded in 2016, Sushi Technology has three major categories of business, including dental, hair and hairdressing, and has three private brands of "Sushi", "AIRFLY" and "Pinjing".
From 2018 to 2020 and the first six months of 2021, Sushi's revenue was 534 million yuan, 1.025 billion yuan, 1.371 billion yuan and 906 million yuan, respectively, with an average annual compound growth rate of 60.17%.
While revenue continues to rise, Sushi Technology has also ushered in a double rise in gross profit and net profit.
From 2018 to 2020 and the first six months of 2021, the net profit of Sushi was 46.5446 million yuan, 36.3759 million yuan, 69.8181 million yuan and 92.1567 million yuan, and the gross profit margin was 23.64%, 25.24%, 30.04% and 37.28% respectively.
As a member of the Xiaomi ecological chain, Sushi Technology is inevitably the same as the previous Yun mi technology, No. 9 company, and stone technology, suffering from a more serious "millet dependence".
According to the data, from 2018 to 2020 and the first six months of 2021, the related sales of Sushi Technology and Xiaomi were 393 million yuan, 628 million yuan, 831 million yuan and 511 million yuan, accounting for 73.52%, 61.31%, 60.60% and 56.40% of Sushi's revenue in the same period, respectively.
Even if the proportion of related party transactions from Xiaomi has declined, the proportion of revenue from more than half of a single customer has still attracted questions.
It can be found that the gross profit margin of procurement revenue from Xiaomi is much lower than that of its own brand.
According to the prospectus, the gross profit margin of electric toothbrushes supplied to Xiaomi in 2018-2020 and the first six months of 2021 was 22.94%, 17.04%, 13.67% and 17.56%, respectively; while the gross profit margin of its own brand "Sushi" electric toothbrush was 24.89%, 33.17%, 43.41% and 51.19%, respectively.
Nearly double the difference makes Sushi Technology is very "entangled", hovering between "quantity" and "profit" for a long time, this situation will continue in the future, Sushi Technology is difficult to abandon the millet tree on which to survive, but too low gross profit margin will pull down the company's overall revenue indicators.
Sushi Technology admitted, "If the amount of procurement from Xiaomi Group to the company in the future decreases significantly, the company's business and operating performance will be adversely affected." ”
Sushi Technology's "millet dependence" is not light.
The logic of the electric toothbrush: the fear and love of Sushi Technology
According to the prospectus of Sushi Technology, its business mainly comes from head care products, and more than half of its revenue comes from oral care products, of which the core SKU is electric toothbrush.
During the reporting periods from 2018 to 2020 and the first six months of 2021, sushi technology's revenue from oral care products (including electric toothbrushes, toothbrushes and peripheral products) was 330 million yuan, 607 million yuan, 813 million yuan and 526 million yuan respectively, accounting for 61.71%, 59.2%, 59.31% and 58.12% of the total revenue in the same period.
The good results are worth letting Sushi Technology run the IPO listing "running in the race" to increase the large amount of fundraising to expand the market share of electric toothbrushes, but we should also pay attention to the competitive pressure that cannot be ignored.
According to the data released by Shengang Securities in July 2020, the market share of Sushi Technology is 1.8%, compared with Oralb's 13.2% and Usmile's 5.2%.
On the product side, electric toothbrushes have entered the stage of product homogenization, philips, Oralb, Usmile and other products that occupy half of the domestic electric toothbrush share, in addition to function, it is difficult to have differentiated functions.
This means that the electric toothbrush industry is in urgent need of technological innovation, but Sushi Technology is not good at it. It can be known from the prospectus of Sushi Technology.
Sushi Technology's R&D expenditure is less than a quarter of its sales expenditure.
In 2018, 2019, 2020 and the first half of 2021, Sushi's R&D expenditure was 19.9341 million yuan, 50.038 million yuan, 45.9308 million yuan and 32.2526 million yuan, accounting for 3.73%, 4.88%, 3.35% and 3.56% of the revenue, respectively.
Sales expenses for the same period were 43.5628 million yuan, 135 million yuan, 261 million yuan and 185 million yuan.
The marketing expenditure of Sushi Technology is mainly: cooperation with anchors such as Li Jiaqi, traffic star endorsement marketing expenses, and finally pull Sushi's online achievements to today's status.
According to the prospectus, in June 2021, Sushi electric toothbrush ranked 11th in the trading index of the Tmall platform, ranked 3rd in the toothbrush, ranked 5th in electric shaver, and ranked 6th in hair dryer.
In addition to facing foreign brands Philips and Oralb, Sushi is also facing a situation in which Worms, Roman, usmile, Shuker, Bayer, Fupai and other brands, as well as Huawei and oppo, compete in smart devices.
The pressure on Sushi Technology is not small.
Looking at the entire oral health market, it is currently in a stage of full competition: the number of enterprises is large, the entry threshold is low, and the homogenization of products is obvious.
At a time when the online traffic dividend is gradually decreasing and the cost of customer acquisition is increasing, Sushi Technology, which is mainly for the younger generation, also needs to have more "black technology".
Sushi rushed to run the "first stock of electric toothbrushes" should seek more "stability" rather than "fast".