The Hong Kong Stock Exchange has ushered in another "net red" company.
On April 8, Banana Holdings Limited (hereinafter referred to as "Banana") formally submitted a prospectus to the Hong Kong Stock Exchange for listing on the Main Board, with CICC and Morgan Stanley as joint sponsors.
Founded in 2013, the brand was originally positioned in the high-end professional sunscreen umbrella, taking the fashionable and high-value route, so it is also known as the "Hermès" in the sunscreen umbrella. Up to now, the brand has expanded its product matrix to clothing, umbrellas, hats, accessories, shoes and other categories, and the product portfolio covers different urban outdoor scenes.
If the listing is smooth, bananas may become the "first stock of China's urban outdoors".
Since its establishment, Banana has received less external financing and has introduced a total of three investors, including Sequoia China, Bee Qiao Capital and China Renaissance Capital. Before the IPO, Sequoia China held 19.37% of the shares, the largest institutional shareholder, Bee Qiao Capital held 6.96%, and China Renaissance Capital held 1.54%.
Stepping on the outdoor outlet of the female city, the annual revenue is 2.4 billion
In the past two years, under the normalization of epidemic prevention and control, urban outdoor activities with leisure, entertainment and social attributes are becoming the mainstream lifestyle of young people.
According to China Insights Consulting, the market size of China's leisure and sports shoes and apparel has reached 1.1 trillion yuan and 290 billion yuan in 2021, and it is expected to maintain a compound annual growth rate of 9.3% and 10.7% from 2021 to 2026. Benefiting from China's continuous consumption upgrades, coupled with the success of the recent Beijing Winter Olympics, people's enthusiasm for participating in various outdoor activities has ignited.
According to the prospectus, the performance of bananas is growing year after year. In 2019, 2020 and 2021, the revenue under the banana was 385 million yuan, 794 million yuan and 2.407 billion yuan respectively, with a compound annual growth rate of 150.1%. During the same period, the company's adjusted net profit was 0.20 billion yuan, 0.39 billion yuan and 136 million yuan respectively, with a compound annual growth rate of 162.6%. Gross profit margin was 50.0%, 57.4% and 59.1%, respectively.
In terms of business model, Banana adopts a combination of self-operated channels and distributors, which mainly focuses on the DTC (direct to customer) model, directly interacting with customers and achieving extensive customer reach.
Specifically, the online channels under banana mainly include brand online stores and e-commerce platforms such as Tmall, Taobao, and JD.com. By the end of 2021, the company also opened 66 offline stores in 23 cities in China.
According to the prospectus, the self-operated channels under the banana have contributed more than 80% of the company's revenue in the past three years. Among them, the Tmall flagship store, as one of the main sales channels under bananas, increased the total number of paid customers during the period from 1 million in 2019 to 3 million in 2020, and further increased to 7.5 million in 2021. In 2019, 2020 and 2021, the repurchase rate of Tmall flagship stores was 18.2%, 32.9% and 46.5%, respectively.
The rapid rise of brands is also inseparable from investment in marketing. It is understood that in terms of online marketing, the consumer-oriented marketing system, which is mainly composed of live broadcasting and evaluation, has built an online platform marketing matrix covering Tmall, Douyin, WeChat, Weibo, Xiaohongshu, etc., using short videos and live broadcast business to introduce consumer traffic and reach potential users. According to statistics, many head anchors of the three major live broadcast platforms of Jikuaitao have cooperated with Banana, in addition, many star artists have also brought goods for Banana.
According to the prospectus, in 2021, Banana worked with more than 600 KOLs (Key Opinion Leaders), of which more than 199 KOLs had more than one million followers, bringing 4.5 billion views to Banana. In 2019, 2020 and 2021, advertising and marketing expenses under bananas as a percentage of revenue were 9.6%, 15.0% and 24.4% respectively.
In terms of product research and development, the prospectus shows that the R&D team under banana is committed to transforming product solutions into its own core technologies, such as Airloop fabric, original yarn sunscreen technology and omnidirectional push-pull hive technology, L.R .C coating technology, silent hive technology and FlexCore lightweight sole technology. As of the latest practicable date, Banana has 123 patents in China and 72 patents are pending.
Two post-80s engineering men, from selling sunscreen umbrellas to support an IPO
Although it is a brand that focuses on female consumers, the story of Bananas began with two post-80s engineering men.
Ma Long, founder and CEO of Banana, graduated from East China University of Science and Technology with a bachelor's degree in polymer materials and engineering, and later developed in Hong Kong. Being in the most diverse cities, Shanghai and Hong Kong, allows Ma Long to see the changes in people's lifestyles up close.
Ma Long found that at that time, Hong Kong women's participation in various emerging activities such as night running and city cycling was already a very common thing, and in the choice of clothing, they began to deliberately choose some niche brands to emphasize their personality through functional differences. But at that time, few brands in the mainland could meet the multiple needs of female consumers for product appearance, function and brand at the same time. Based on this insight, Malone began to plan a business.
First of all, Ma Long found Lin Ze, a fellow with an engineering background, and the two officially founded the banana brand in 2013 through nearly half a year's planning. It is understood that within the group, Malone is mainly responsible for product research and development, supply chain and brand management, and Linze is mainly responsible for marketing and sales.
At the beginning of its establishment, banana under the high-end sunscreen umbrella as the entry point, and in the same year launched the first sunscreen product double-layer small black umbrella, it is understood that the product to "double umbrella surface + L.R.C coating" as a feature, just launched on the market will be a hit. In 2016, Banana went from e-commerce platforms to offline channels, opened a number of stores, and also launched the "classic double-layer three-fold small black umbrella" and "capsule mini five-fold umbrella", the former focusing on sunscreen, the latter focusing on convenient carrying. In the following three years, Banana maintained the speed of launching 2-3 new products per month, and expanded the product category to hats, sunscreen clothing, shoes and so on. In the winter of 2021, bananas also launched wool leggings, heat scarves, down jackets and other warm clothing.
Up to now, Banana has built a product matrix including clothing, umbrellas, hats, other accessories and shoes, and the scene has also expanded from sun protection to the entire urban outdoor scene.
It is worth noting that as the brand entry point and flagship product under the banana, the proportion of revenue is decreasing year by year, from 86.9% in 2019 to 20.8% in 2021. In contrast, the revenue of other categories such as clothing, hats, accessories, and shoes has shown rapid growth, and the category layout has gradually balanced.
According to China Insight Consulting, in terms of total retail sales and online retail sales in 2021, Banana ranks first among Sunscreen apparel brands in China, with a market share of 5.0% and 12.9% respectively, of which online retail sales exceed 5 times that of the second largest brand. In addition, among the emerging brands in China's footwear and apparel industry with annual retail sales of more than 1 billion yuan, according to the retail sales in 2021, Banana also ranked first and grew the fastest.
Behind the achievements, bananas have also attracted the attention of capital. In November 2015, it received millions of dollars in Series A financing by Sequoia China, in April 2021, the company introduced Bee Qiao Capital, and in February 2022, it obtained a new round of financing, and the investor was China Renaissance Capital.
When talking about the reasons for investing in bananas, Chang Xin, founding partner of Bee Qiao Capital, said that a very important point is the market and the company's entry point.
"Outdoor, health must be the future direction, the outdoor brands on the market in the past are almost all male-oriented, emphasizing professionalism, limits, a female positioning of the outdoor brand market gap is very obvious, women's outdoor will pay more attention to fashion, urbanization, scene is also different from the traditional outdoor scene."
From the point of entry, just as basketball is to Nike, yoga is to lululemon, sun protection is the first step for the vast number of Asian women outdoors, and it is most appropriate to use this as an entry point. ”
Before the IPO, Sequoia China held 19.37% of the shares under banana, which was the largest institutional shareholder, with Bee Qiao Capital holding 6.96% and China Renaissance Capital holding 1.54%. At the same time, Ma Long, founder and CEO of Banana, holds 29.07% of the company's shares, and another founder, Lin Ze, holds 27.91%.