Financial reporter Zhang Tingwang
"Except for feelings, don't repair everything" home maintenance platform - woodpecker sprints Hong Kong stocks!
On January 29, Woodpecker Maintenance International Limited (hereinafter referred to as "Woodpecker") officially submitted an application for listing on the main board of the Hong Kong Stock Exchange on January 29.
According to CIC, Woodpecker is the largest home repair platform in China in terms of total transaction value for the nine months ended 30 September 2023. Judging by the prospectus, Woodpecker Maintenance has shown strong growth momentum over the past few years. In 2021, 2022 and the first nine months of 2023, the company recorded revenue of 401 million yuan, 595 million yuan and 735 million yuan respectively, and the corresponding profit for the same period was 33.431 million yuan, 6.204 million yuan and 102 million yuan.
Woodpecker has been looking for the best solution for home maintenance standardization, but this road does not seem to be as simple as the woodpecker's slogan suggests. Some media have reported that the company has problems with service quality and poor management of employees. These negative news not only affected the company's reputation, but also left investors skeptical about the company's future development.
In addition, on the complaint platform, there are not a few consumer evaluations who complain about woodpeckers' "indiscriminate charges" and "inflated prices".
Revenue for the first nine months of 2023 was 735 million
Woodpecker is a home repair platform that provides a convenient one-stop solution for a variety of home repair needs.
The services provided on Woodpecker's platform cover more than 300 major categories of home appliances and household facilities, including home appliance repair, home appliance cleaning, home appliance installation, water and electricity repair, pipe dredging, lock picking and replacement, waterproof leak repair, wall renovation, kitchen and bathroom remodeling, tile floor repair, door and window maintenance, furniture repair, and electronic products (such as mobile phones and laptops) repair.
Image source: Prospectus
For the nine months ended September 30, 2023, the total transaction value of the Woodpecker platform was approximately $1.79 billion, representing an increase of 65.7% over the same period in 2022. In 2022, the total transaction value of woodpeckers was approximately $1.46 billion, representing an increase of 47.5% over 2021.
Image source: Prospectus
The average number of monthly active engineers on the Woodpecker platform increased by 62.8% from 7,092 in 2021 to 11,546 in 2022 and by 67.3% from 11,015 in the nine months ended 30 September 2022 to 18,423 in the same period in 2023.
Image source: Prospectus
Woodpecker's revenue for the first nine months of 2023 was 735 million yuan, compared with 440 million yuan in the same period last year, gross profit was 623 million yuan, compared with 359 million yuan in the same period last year, and profit for the period was 102 million yuan, compared with 6.56 million yuan in the same period last year.
Woodpecker's adjusted profit in 2021 and 2022 was 23.63 million yuan and 42.846 million yuan, respectively, and the adjusted profit in the first nine months of 2023 was 148 million yuan, compared with 38.11 million yuan in the same period last year.
As of September 30, 2023, Woodpecker had cash and cash equivalents of $172 million.
According to a consumer survey conducted by CIC in January 2024, the Woodpecker brand still enjoys the highest user recognition and satisfaction among home repair platforms in China. During the Track Record Period, the company received a five-star rating in more than 90% of service orders. Among the consumers who participated in the CIC Consumer Survey and used the company's services, 99.6% of the consumers were willing to choose the company again or recommend the company to others.
Is home maintenance chaos difficult to solve?
In fact, China's home repair industry faces various challenges. Engineers face volatile order volumes and revenue fluctuations, resulting in high engineer turnover in the industry. The lack of high-quality, easily accessible training makes it difficult for them to keep up with increasingly complex repair needs. On the consumer side, the process of finding a qualified engineer is time-consuming, often resulting in long waits for consumers. The lack of standardized industry practices leads to inconsistent service quality and opaque prices, which ultimately reduces consumer trust and satisfaction.
In the concept of woodpecker home maintenance, "three fast and one accurate", "after-sales service guarantee commitment" and "door-to-door service specification" are often mentioned. The relevant staff of Woodpecker have also said in public many times that they will establish a one-stop digital full-process standard service system through digital empowerment, make the service more convenient and efficient, and strive to become a digital one-stop home maintenance service brand.
In 2018, Woodpecker officially announced the "Woodpecker Fixed Price" model, vowing to break the chaos of the industry's random charges in one fell swoop. In the following years, Woodpecker independently developed and realized the whole process digital platform, formulated industry standards for home maintenance, launched maintenance meters, and made many attempts.
Image source: Prospectus
In addition, Woodpecker also provides engineers with online and offline diversified skills training to help them improve service quality and broaden service skills. It is reported that Woodpecker has established more than 400 engineer stations across the country to provide diversified professional training, technology and supply chain support for cooperative engineers.
But even so, it seems that there is still a long way to go before the dream of "standardization" is realized.
Some media have reported that the company has problems with service quality and poor management of employees. These negative news not only affected the company's reputation, but also left investors skeptical about the company's future development.
In addition, searching for "woodpecker maintenance" on social platforms such as Weibo and Xiaohongshu, there are many consumer evaluations that complain about "indiscriminate charges" and "inflated prices". According to the black cat complaint platform, Woodpecker has received a total of 3,010 complaints, and there will be 14 in the past 30 days in 2024 alone, mainly involving cost disputes, poor maintenance conditions, etc.
Image source: Black Cat Complaint
It is worth noting that the emergence of offline chaos is, in the final analysis, because of the way online platforms operate. In most cases, online platforms adopt the so-called "crowdsourcing" mode of operation, and those who provide services on the platform are actually those who serve offline.
Image Credit: Woodpecker
Although the service is still the same, the price that consumers end up paying is not necessarily lower than that charged offline because the online platform requires a commission. In order to maintain their own profits, maintenance personnel will inevitably work on consumables.
Of course, the IPO is just a new starting point, and there are still many uncertainties about the future development of Woodpecker Maintenance. For example, the intensity of market competition, the constant change in consumer demand, the pace of technological innovation, etc., may have an impact on the company's performance.
As a company with rich service experience and professional team, as long as it can solve the current problems, there is still a lot of room and potential for the development of the woodpecker home repair platform in the future.