China Times (www.chinatimes.net.cn) reporter Lu Xiao reports from Beijing
Entering its 17th year of establishment, ZBJ, a customized enterprise service e-commerce platform, is still on the road to listing.
On December 17, Zhu Bajie submitted a prospectus for the third time on the Hong Kong Stock Exchange. According to the prospectus, its joint sponsors are CITIC Securities and CCB International, and the fundraising will be used to expand the company's user base, improve the business ecology, and enhance commercialization capabilities in the next five years.
Founded in 2006 with the rise of the freelancer model (witkey), Zhu Bajie, who is a household name in Journey to the West, has crossed from the PC Internet era to the mobile Internet era in Zhubajie, and has become a new economic unicorn with a valuation of more than 10 billion yuan. However, as Internet giants have set foot in the potential market of small and medium-sized enterprise digitalization, and decentralization is becoming more and more popular, many companies in the same period as ZBJ.com are now silent, and it is not easy for ZBJ.com to continue to choose to be a large and comprehensive platform.
Prospectus submitted three times
Founded in Chongqing by Zhu Mingyue in 2006, Zhu Bajie once stood on the cusp from helping small and micro enterprises make money by designing trademarks to becoming a freelancer platform for sending tasks and taking orders. On December 18, a reporter from China Times logged on to the official website of ZBJ and saw that it currently has a number of corporate services such as industrial and commercial finance and taxation, intellectual property rights, brand design, government/state-owned enterprise procurement, and digital asset trading.
The newly submitted prospectus discloses the current operating conditions of this once star company.
According to the prospectus, the total GMV of ZBJ's in the first half of the year was 7.64 billion yuan, which was nearly 70% of last year's total, and the average customer unit price of nearly 76,000 yuan in the first half of this year was also 1.7 times that of last year.
But on the other hand, due to the impact of the epidemic and other reasons, its revenue scale and growth rate have declined. Zhu Bajie is not in his most glorious moment now.
In the first half of 2023, ZBJ's revenue decreased by 12.2% year-on-year to 252 million yuan, its annual revenue in 2022 decreased by 29.5% year-on-year to 540 million yuan, and the revenue of nearly 770 million yuan in 2021 only increased by 1.4% year-on-year. It should be mentioned that the revenue from government cooperative arrangements has accounted for more than 20% in the past three years, but this figure fell below 20% for the first time in the first half of this year. Correspondingly, in the first half of this year, more than 80% of its revenue from customer contracts was generated.
According to the reporter's understanding, ZBJ's customer contract revenue is divided into three parts: enterprise service platform business, smart enterprise service business and industrial service business, accounting for 22.4%, 44.2% and 15.2% of revenue respectively in the first half of this year. However, the gross profit of these three businesses all declined year-on-year in the first half of this year, of which the industrial service business declined the most, with a year-on-year decrease of 43.2%, which was mainly due to the decrease in revenue from entrepreneurship and innovation park services, according to the prospectus.
From the perspective of profitability, in the first half of this year, ZBJ's loss was 78 million yuan, which was narrower than the same period last year, and its total loss in the past three years was 865 million yuan. According to public information, Zhu Bajie announced that it would make a profit in 2016, and its revenue was about 1 billion yuan that year.
On December 18, a reporter from the "China Times" sent interview questions about IPO and performance to the PR email provided by the ZBJ's website, but has not received a reply as of press time. A former Zhubajie employee told reporters that as far as he knew, "now the brand department over there has been withdrawn, and the personnel have also been transferred." ”
Rushing to the market
Although it is not in the highlight moment, Zhu Bajie's heart to look forward to listing has not changed.
According to the prospectus, in 2011, it began to explore the possibility of overseas listing, and established ZBJ Holdings Limited in the Cayman Islands, as well as the establishment of a variable equity entity structure. In 2015, ZBJ.com gave up its overseas listing plan and instead planned to list on the A-share market. In July 2019, ZBJ.com submitted a listing guidance filing to the Chongqing Regulatory Bureau of the China Securities Regulatory Commission.
But then change is happening. Zhu Bajie said in the prospectus that since the listing timetable for A-share listing is uncertain and relatively long, while the timetable of the Hong Kong Stock Exchange is more reasonable and predictable, and considering that the latter will provide it with an international platform to access foreign capital and overseas investors, it decided to list on the Hong Kong stock market.
But this is also the third time that Zhu Bajie has submitted a prospectus in Hong Kong stocks. According to the reporter's understanding, Zhu Bajie has previously submitted listing applications to the main board of the Hong Kong Stock Exchange in October 2022 and April 2023 respectively, but they have expired due to exceeding the 6-month validity period.
For Zhu Bajie to submit the prospectus again on the Hong Kong Stock Exchange, some industry insiders believe that this is not a good time to go public in Hong Kong when communicating with reporters, in addition to the tepid environment of Hong Kong stocks, the fundraising and valuation of the industry's leading companies have also declined sharply, "Now investors are more cautious." ”
However, for investors in the past, especially in the later stages, listing is the most convenient way for them to cash out.
Tianyan check shows that since 2007, Zhu Bajie got 5 million yuan in angel round financing from Yi Yitian, and has carried out multiple rounds of financing, and in 2015, it received a total of 2.6 billion yuan of financing from Cybernaut Investment and other institutions, and public information shows that its valuation exceeded 10 billion yuan that year.
The latest prospectus discloses that there are currently 23 investors in Zhubajie, including Duilong Gaolaozhuang held by Zhu Mingyue. Among them, Zhu Mingyue and his concerted actors are the largest shareholders with a total shareholding ratio of 30.55%, Liangjiang Industrial Group, which has a state-owned background, is the second largest shareholder with a shareholding ratio of 17.45%, and the third largest shareholder is Chongqing Boen, which holds 15.51% of the shares.
In multiple rounds of financing, the fluctuation of investment prices also reflects the changes in the valuation of ZBJ.
Taking Zhu Mingyue's Duilong Gao Laozhuang as an example, the prospectus shows that until 2016, the investment cost per share of its investment in Zhu Bajie was still 0.07 yuan, but in 2021, its investment cost per share became 5.59 yuan, about 80 times that of 2016. In March 2022, when Duilong Gao Laozhuang invested in ZBJ, the investment cost of 33.83 yuan per share was 483 times that of 2016.
Judging from the prospectus, the highest price of ZBJ's past financing occurred in November 2020, when Hanjiang Fund and Changjiang Fund respectively invested in ZBJ, with an investment cost of 41.67 yuan per share. For example, when Liangjiang Industrial Group invested in ZBJ, its investment cost per share was 19.86 yuan, but when it reinvested in August 2022, its investment cost per share was 12.4 yuan, a decrease of 37.5% from the previous investment.
After August 2022, no new financing was disclosed in ZBJ's prospectus.
Fight hard to serve the rivers and lakes
ZBJ.com is oriented to the B-end market dominated by small, medium and micro enterprises.
According to the reporter's understanding, when Zhu Bajie was established in 2006, the "freelancer" business model was prevalent, that is, netizens took over service tasks such as designing websites, drawing logos, and writing copywriting through the Internet platform to help others solve problems and earn commissions. Not only Zhubajie, but also a large number of similar websites such as K68 and Freelancer China sprung up at that time, but now most of these websites have changed their names or cannot be opened.
Regarding the silence of these websites, Internet analyst Ding Daoshi told the "China Times" reporter that due to the non-standard service, there are many problems in the actual operation process, and the business model is not clear, and the entire freelancer industry has not been done.
In this process, Zhu Bajie was forced to transform into an enterprise service. According to the newly disclosed prospectus, on June 30, 2023, enterprises and employers can purchase more than 810 kinds of enterprise services on the ZBJ.com platform, with a cumulative number of registered users of 34.6 million, of which the cumulative number of corporate employers will reach 26.9 million and the cumulative number of service providers will reach 7.7 million. Dan Ding Taoist said in an exchange with reporters, whether it is corporate finance, taxation, design or human resources, there are countless traditional enterprises doing every enterprise service, "the first competition in this industry is very fierce, the second is very scattered, and a particularly large enterprise has not yet been formed." ”
Although it has "survived" the old opponents in the past, new opponents such as 58.com are also pouring out. With the prevalence of decentralization, ZBJ's new opponents in enterprise services are more diversified. Just like Zhu Bajie once used Full Bang as its benchmark company in the prospectus, and the matching of cars and goods provided by the latter is only a vertical track in corporate services.
In the face of these new opponents, Zhu Bajie, who has been in the industry for 17 years, has no obvious advantage.
According to iResearch's report, in 2022, China's customized enterprise service e-commerce market accounted for about 5.2% and about 4.5% of the market share of China's customized enterprise service market and China's overall enterprise service market, respectively. Among them, in terms of GMV in 2022, ZBJ.com ranked second in China's customized enterprise service e-commerce market with a share of 2.4%, while in terms of GMV and revenue, ZBJ's market share in China's customized enterprise service market in 2022 was about 0.12% and 0.006%, respectively.
Zhu Bajie has also spent more effort on marketing in recent years. In the first half of 2023, ZBJ's sales and marketing expenses were 49.3%, nearly 5 percentage points more than the same period last year and 3.8 percentage points more than the whole of 2022. In 2020 and 2021, neither of these figures exceeded 40%.
Internet analyst Ding Daoshi told the "China Times" reporter that Zhubajie, located in the southwest, has not kept up with the changes in the industry in the era of mobile Internet, and in addition, it is too difficult for Zhubajie to be a platform in a niche non-standardized market, "There are only a few companies in China that can do a platform." ”
Yang Siliang, a partner of Zhou Zhan Consulting, also believes that as an online enterprise service e-commerce platform, ZBJ.com exists like Taobao, but its main income is agency bookkeeping, intellectual property services, etc., rather than the transaction service fee of the e-commerce platform.