Deep pickpocket prospectus: Cubs U rent and easy point cloud, who is bragging?

Image source @ Visual China

Text | Niu Dao Finance, author 丨 Fang Wen

The top two IT office leasing companies in China are only 1.5 months apart from submitting prospectuses on the Hong Kong Stock Exchange.

One is Shenzhen Bear U rent, the founder Hu Zuoxiong started in Huaqiang North to do computer assembly, can be called the Shenzhen version of Liu Qiangdong. The other is Yidianyun (formerly known as Yidian Rent), founder Ji Pengcheng's previous project was Huaqing Tianxia, renovating and leasing used computers.

An interesting phenomenon is that in the prospectus, the two companies invariably describe themselves as the first in the industry. These two are the same industry competition, the business is very similar, basically rent computers to make money for enterprises.

Xiao Xiong's U Leasing prospectus reads, "In terms of revenue in 2021, we are the largest enterprise-level DaaS (Equipment as a Service) supplier in China. ”

In terms of revenue, the number of service equipment and remanufacturing capabilities, we are the first and largest technology-enabled office IT service provider in China." ”

This expression is not surprising, in the field of second-hand cars, shared bicycles and other fields, many companies on the outlet have used similar expressions in order to show that they are stronger than their opponents to obtain brand and financing advantages, "far ahead", "the largest, the first" and so on.

And for The Bear U Rent and Easy Point Cloud, which is a little bigger, let's "fight counterfeiting". At the same time, we also followed the touch, IT equipment leasing, what kind of business is it?

01 Who is behind the first, the two companies make money differently

For The bear U rent and easy point cloud who have a larger volume, the main comparison is the following two data: revenue (including the proportion of revenue structure), quantity (equipment, customers, etc.).

From the perspective of income, the income of XiaoXiong U rental is mainly divided into three parts, namely equipment subscription service, IT technology subscription service and equipment recycling income.

In 2021, The revenue of Xiao Bear U rental reached 1.33 billion yuan, of which the income of equipment subscription services was 266 million yuan, the income of IT technology subscription services was 140 million yuan, and the income of equipment recycling was the largest source of revenue, reaching 924 million yuan in that year.

(Cubs U Rental Income Segment Data)

The revenue structure of Easy Point Cloud is similar to that of Xiao Xiong U Rent as a whole, but slightly different. The revenue of EasyPoint Cloud is mainly divided into three parts, namely on-demand office IT services, sales equipment and SaaS and other services.

The total revenue of E-Dian Cloud in the first nine months of 2021 was 838 million yuan, of which the on-demand office IT service was the most important source of revenue, reaching 715 million yuan in the first nine months of 2021, the sales equipment revenue was 110 million yuan, and SaaS and other services were the least, at 12.39 million yuan.

(E-Point Cloud Revenue Segment Data)

At the same time, since EasyPoint Cloud did not release the data for the fourth quarter of 2021, in order to compare who has more revenue from Bear U Rent and EasyPoint Cloud, we use the data of EasyPoint Cloud in 2020 for comparison.

In 2020, the revenue of E-Point Cloud was 813 million yuan, of which 643 million yuan was used and returned office IT services, 157 million yuan was sold equipment revenue, and SaaS and other services were 12.55 million yuan.

In contrast, the total revenue of Xiaoxiong U Rent in 2020 was 1.022 billion yuan, of which the revenue of equipment subscription service was 144 million yuan, the income of IT technology subscription service was 113 million yuan, and the income of equipment recycling was 765 million yuan.

According to the revenue calculation in 2020, the revenue of Xiaoxiong U Rental is 26% higher than that of Yidian Cloud, which is the enterprise with the highest income from IT leasing services in China according to revenue.

If you simply rank according to revenue, Yidian Cloud will definitely not be convinced, and there is a big difference in the revenue structure of the two companies.

The biggest source of revenue for Bear U Rent is equipment recycling income, while the biggest source of income for EasyPoint Cloud is on-demand office IT services.

The two companies used different statistical calibers in their prospectuses.

According to the report data in the prospectus of Xiao Bear U Leasing, The revenue of DaaS in 2021 is 1.33 billion yuan, and the comparison data can be inferred that the second-ranked enterprise is Yidian Cloud, and the revenue in 2021 is 1 billion yuan according to the definition of DaaS, which is basically in line with the revenue of Yidian Cloud in 2021.

(Little Bear U Rent Prospectus about DaaS ranking)

At the same time, according to the report in the prospectus of Yidian Cloud, in 2020, the office IT revenue paid by Yidian Cloud based on usage was 643 million yuan, and the income of the second-ranked enterprise was 225 million yuan.

(Ranking based on usage payment model in the prospectus of Yidian Cloud)

In other words, if the two main businesses are generally believed to be IT equipment leasing, then the market volume of EasyPoint Cloud is larger.

In addition, according to the number of equipment and the number of customers, the volume of the two companies also has a large difference.

The number of subscription equipment data rented by Bear U will reach 455,000 units in 2021, the number of long-term equipment subscription customers is 10,030, in addition, the number of refurbished equipment is 1.375 million units, and the number of equipment recycling customers is 1,101.

According to The data of Yidian Cloud, as of the end of September 2020, the number of customers was 37,000, the number of service equipment was 1.09 million, and the number of remanufactured equipment was 397,000 units.

(Number of customers and equipment in the prospectus of Yidian Cloud)

Now it can be seen that the business focus of Little Bear U Rent and Easy Point Cloud is similar but different. The number of recycled equipment rented by XiaodiU is 3.5 times that of yidian cloud remanufacturing equipment, and the number of equipment leased by Yidian cloud is 2.4 times that of Xiaodiyun.

If calculated according to the traditional itat equipment rental market, the number of easy point cloud equipment, revenue and customers are much higher than that of Xiao Xiong U rent, ranking first in the market.

But recycling businesses are clearly more profitable than IT leasing.

According to the Bear U Rental Prospectus, the average income of each equipment recycling customer is 840,000 yuan, while according to the data of 2021, the income of each customer who subscribes to the equipment for a long time is only 217,000 yuan. According to the data of the first 9 months of 2021, the average customer income of EasyPoint Cloud is 193,000 yuan.

Specific to each device, Xiao Xiong U rents 672 yuan per refurbished equipment, and Yidian Cloud earns 278 yuan per remanufacturing equipment (sold equipment).

Specific to a single device, Xiao Xiong U rents 583 yuan per rental equipment (including long-term and short-term subscriptions), and Yidian Cloud earns 655 yuan per rental equipment.

Xiao Xiong U rent is to focus on the revenue on equipment recycling, and the equipment sales business after easy point cloud remanufacturing is weak, which also leads to a large difference in the revenue of the two companies.

02 Behind IT leasing, the cost pressure of borrowing money

IT equipment leasing is a heavy asset business, rent equipment out of a month to earn hundreds of yuan, which means that they have to invest tens of thousands of blocks of money first, provided that the equipment will not have problems, or a year in vain.

Hu Zuoxiong, who rented by Xiao Xiong U, was so pitted, a customer in Guangzhou rented hundreds of computers, a device earned 100 yuan a month, and finally found that this customer rented the computer and sold it.

For Bear U Rent and Easy Point Cloud, how to operate these devices is a "technical work".

For these two companies, there are two methods, one is financial leasing, which transfers the cost of assets, and the other is to recycle and refurbish equipment.

Let's start with financial leasing.

This part of the financing is mainly from banks and other fixed-rate borrowings. While using financial leasing to transfer the cost of money, the two companies also bear huge financing interest costs.

According to the financial report data of Xiao Xiong U Leasing, from 2019 to 2021, the borrowings were 176 million yuan, 304 million yuan and 541 million yuan, respectively, corresponding to the interest expense of the loans of 10.2 million, 17.39 million and 34.76 million yuan. The prospectus also discloses that the annualised percentage rate (APR) of Bear U Rent ranges from 5.6% to 15.5%, 5.4% to 15.5% and 5.2% to 12.8% respectively.

(Financing costs in the Cubs U Lease Prospectus)

The prospectus discloses that from 2019 to 2021 (the first nine months), the borrowing amount is 850 million yuan, 1.24 billion yuan and 1.32 billion yuan, respectively, of which bank borrowings are 340 million yuan, 590 million yuan and 500 million yuan, other financial institutions borrow 510 million yuan, 650 million yuan and 820 million yuan, and the interest on borrowings is 74.5 million, 87 million and 70.1 million yuan, respectively.

(Financing costs in the prospectus of Yidian Cloud)

In addition, compared with the comprehensive interest rate of the two borrowings, Yidian cloud in 2019 and 2020 is significantly higher than the bear U rent, which means that the former's "money" cost is higher. However, the financing cost of EasyPoint Cloud will be significantly reduced in 2020 and 2021, and in 2021 (the first 9 months), the borrowing cost of EasyPoint Cloud will even be lower than that of Little Bear U Rent, while the financing cost of Little Bear U Rent in 2021 will increase significantly.

It is also worth noting that a large part of The E-Point Cloud's loans are secured loans, while the proportion of Bear U's leased loans is less than 1/3.

(Calculated according to the bear U rent and easy point cloud prospectus, of which the 2021 data of easy point cloud is the first 9 months)

03 Leasing business supported by recycling and refurbishment machines

Mortgage and borrowing are one of the ways to reduce cost pressures, but for the two companies specializing in leasing, recycling and refurbishing machines is a proprietary technical work.

Many people are curious, where does the equipment of IT equipment rental companies come from? Isn't it cheap? Bear U rent and easy point cloud do have a bit of a doorway.

According to the prospectus data of Easy Leasing, the total assets of service equipment are 1.09 million yuan, while the total assets of leased computer equipment are 1.66 billion yuan, and the average value of each equipment is only more than 1500 yuan, except for some equipment because of depreciation and other reasons, the low purchase price is also one of the reasons.

The recycling business of Xiao Bear U Rent and the remanufacturing business of Easy Point Cloud are both aimed at reducing the purchase cost and selling the discontinued equipment to reduce costs.

The equipment recycling business of Xiao Xiong U rent refers to the purchase of obsolete IT equipment from enterprise users (including the discontinuation of their own rental equipment) and use it for rental services after refurbishment, or sell it through external/own e-commerce platforms.

There are two important points of information here:

1. Part of the leased equipment comes from recycling equipment, and Xiao Xiong U rents for leasing after renovation;

2. After the equipment leased by the own platform is discontinued, it is resold through its own recycling equipment.

This shows that one is to purchase rental equipment at a low price as possible, and the other is to re-sell the obsolete equipment to recover costs as high as possible.

Little Bear U Rent mentioned in the financial report that it has cooperated with more than 1/2 of the top 30 Internet giants in device subscription services and recycling. In addition, the number of leased equipment for large customers was 201,000, accounting for 44%.

Combing through the cycle path of the equipment rented by Little Bear U, that is:

1, computer purchase: manufacturers buy new computers, cooperative enterprises recycle computers;

2. Refurbished machine flow direction: for leasing, external e-commerce sales, and self-owned platform sales.

IT leasing has a positive effect on the circulation of the entire industry chain, which is why the e-commerce platform JD.com and IT manufacturer Lenovo have invested in Xiaoxiong U rent.

The prospectus discloses that the strategic shareholders have provided customers and supply chain resources for Xiaoxiong U Leasing, such as Xiaoxiong U Leasing has settled in JD.com Enterprise Purchase and Enterprise Leasing, and is also a business partner of Tencent Co-working Space.

Lenovo sees Bear U Rent as "a biggest customer, a best partner" because it can directly sell computers to the latter.

It is worth noting that in 2020, Xiao Bear U Rent purchased 334 million yuan from supplier F, accounting for 30.7% of the total procurement of that year, and by 2021, the supplier fell out of the top 5 suppliers of Xiao Bear U Rent, and the supplier is also the only supplier who has purchased more than 30% of Xiao Bear in the past 3 years.

Easypoint Cloud also has the problem of supplier concentration. The prospectus discloses that there are two suppliers whose procurement accounted for a relatively high proportion, suppliers A and D accounted for 32.4% and 16.7% of the procurement in 2020, respectively, and 35.6% and 27% in the first nine months of 2021, accounting for more than 60% of the total, and the proportion of supplier A exceeded 30% for two consecutive years.

IT equipment recycling plays an important supporting role for both companies. Bear U Lease's equipment recycling revenue in 2021 is 895 million yuan, but the gross profit is only 29 million, which means that the equipment is recycled from the enterprise and re-injected into the leasing cycle, or directly sold without a high price difference, but the huge number of inexpensive equipment can support the leasing business.

Similarly, The remanufacturing business of EasyPoint Cloud can reduce the cost of the leasing business through low-cost equipment maintenance and refurbishment.

A comparable data is that the gross profit of the device subscription service rented by Little Bear U is only 23.2%, while the easy point cloud can reach 53.6%.

According to the data disclosed by Yidian Cloud, in the first nine months of 2021, the number of remanufactured devices reached 397,000 units.

Of course, the remanufacturing business of Yidian Cloud is similar to that of Xiao Xiong U Rent, but the final sales channel is its own B2B auction platform Yipai Machine. In contrast, the total amount of equipment sold by EasyPoint Cloud is not much, and the total amount of equipment sold in the first nine months of 2021 is 110 million yuan, far lower than the 895 million yuan rented by Little Bear U.

epilogue

An interesting phenomenon is that Little Bear U Rent and Easy Point Cloud depict different industry prospects for investors in the prospectus.

The report on the adoption of Xiaoxiong U Rent conveys to investors the market size of DaaS and its own volume advantages, while Yidian Cloud shows the scale of enterprise IT equipment consumption and the current penetration rate of only 3%.

This shows two different ways of thinking about the enterprise. Little Bear U Rent emphasizes how the billion and ten billion plates work, and Yi Dianyun emphasizes the prospects of the market of 100 billion trillion.

Obviously, the two enterprises represent the different styles of enterprises in Shenzhen and Beijing, one is pragmatic and the other is far-reaching.