Reporter | Lu Yibei
Edit | Ya Han Xiang
1
According to the Hong Kong Stock Exchange, Banana Holdings Limited (hereinafter referred to as "Banana") formally submitted a prospectus on April 8 to be listed on the Main Board, with CICC and Morgan Stanley acting as joint sponsors and China Renaissance Capital acting as the exclusive financial adviser.
Founded in 2013, unlike the past such as the paradise umbrella and other domestic old umbrella companies have been deeply cultivating department store supermarket channels, in line with the rise of e-commerce at that time, Banana under the beginning of the opening of Tmall store, the first product is aimed at young women outdoor products market sunscreen double-layer small black umbrella. In 2017, the launch of the lightweight and portable capsule series of umbrellas really made bananas begin to have a certain degree of popularity, and also began to extend the product line to non-umbrella or accessory products such as sleeves, hats, sunscreen clothing, masks and so on.
Image source: Weibo @ Banana Beneunder
The prospectus cites a report by China Insight Consulting as saying that in terms of total retail sales and online retail sales in 2021, Banana xia is the largest sunscreen clothing brand in China, with a market share of 5% and 12.9% respectively. At the same time, its online retail sales of sunscreen clothing are more than 5 times that of the second largest brand.
In terms of financial data, from 2019 to 2021, the revenue under the banana was 380 million yuan, 790 million yuan and 2.41 billion yuan, respectively. During the same period, excluding the change in the fair value of the convertible redeemable preferred shares, the adjusted net profit under the banana was $19.68 million, $39.41 million and $140 million, respectively.
The reason for the significant increase in revenue under bananas between 2020 and 2021 may be that the company will expand its marketing and sales business to content e-commerce platforms including Douyin from 2020. According to the prospectus, online channels are the key to its success, and the revenue generated by its online stores and e-commerce platforms increased from about 286 million yuan in 2019 to about 628 million yuan in 2020, and further increased to 1.947 billion yuan in 2021.
However, bananas have not expanded offline. The prospectus shows that the number of offline retail stores has increased from 39 in 15 cities as of December 31, 2019 to 66 in 23 cities as of December 31, 2021, and has established cooperation with a number of well-known chain supermarkets, convenience stores and department stores in China.
In terms of products, the current product portfolio under the banana mainly includes clothing, umbrellas, hats, other accessories and shoes, and will continue to cover a wider urban outdoor scene. It excels at creating blockbuster pieces with certain highlights. At present, the shell hat with a brim large enough to cover the chin, a sunscreen mask that can only expose the eyes, etc., has become a frequent customer shared by social platforms such as Xiaohongshu and Douyin with gimmicks in design, rich colors, and frequent content marketing.
Image source: Banana Under Tmall flagship store
Behind these "blockbusters" is a unique product planning method under the banana.
According to the prospectus, Banana first conducts cross-category research, excavates potential product solutions that can solve consumer pain points in the same category and different product forms across categories, and reviews them through user product feedback. During the performance period disclosed in the prospectus, the revenue generated by the top 30 hot-selling selected items under the banana accounted for 99.8%, 88.6% and 74.1% of the total revenue.
However, gradually getting rid of the dependence on a single explosive category may also help bananas to achieve rapid growth.
According to the prospectus, since the second half of 2021, bananas have begun to expand non-sunscreen products, such as leggings, pants, coats, etc. From the perspective of product categories, umbrellas are the main source of income under the banana in 2019, accounting for 86.9%, and the revenue of other products such as hats and clothing accounts for less than 10%. By 2021, the proportion of umbrella revenue will drop to 20.8%, the proportion of clothing revenue will rise to 29.5%, and the proportion of income from sunglasses, masks and other accessories will also rise to 25.4%, and the distribution of various categories will gradually balance.
In the past three years, the gross profit under bananas has been 190 million yuan, 460 million yuan and 1.42 billion yuan, and the gross profit margin is 50.0%, 57.4% and 59.1% respectively.
However, the high performance growth under the banana is supported by high sales costs.
Banana under the very emphasis on content marketing, for online, banana marketing system by live broadcast, evaluation and advertorial and other forms of composition, but also built Tmall, Douyin, WeChat, Weibo, Xiaohongshu and other online platform marketing matrix. You can easily see li jiaqi and other anchors often help bananas to bring goods, but also find that Zhao Lusi and other stars, KOLs share banana products, on the Little Red Book, there have been more than 40,000 notes about bananas.
According to the prospectus, from 2019 to 2021, the company's distribution and sales expenses were 124 million yuan, 323 million yuan and 1.104 billion yuan, accounting for 32.4%, 40.7% and 45.9% of the revenue respectively. Among them, advertising and marketing expenditure was 36.917 million yuan, 119 million yuan and 586 million yuan respectively, of which 2021 increased by 392.43% compared with 2020, accounting for a quarter of the company's overall revenue; while e-commerce platform service charges were 27.82 million yuan, 96.893 million yuan and 227 million yuan, of which 2021 increased by 134.31% compared with 2020.
How to rely on products to drive growth after stopping the supply of traffic is a huge challenge at present. Its prospectus risk warning also indicates that the company has incurred significant costs in relation to various sales and marketing efforts, and its success depends in part on marketing activities, and if marketing activities do not attract customers in a cost-effective and efficient manner, the business, financial condition, performance and prospects of bananas may be significantly adversely affected.