On the evening of May 2, Beijing time, Xinxue Technology officially landed on Nasdaq. The opening price was reported at US$16.50, which was 20% higher than the issue price of US$13.80. At the close, New Oxygen Technology rose 31.88% to $18.20, with a market capitalization of $1.823 billion.
In the case that the underwriters did not exercise the over-allotment option, the total amount of funds raised was approximately $179.4 million. The previously updated prospectus shows that the new oxygen plan to issue 13 million American depositary shares or 10 million shares of Class A common stock (15% over-allotment option), the issue price range is set at 11.8-13.8 US dollars per share, the initial fundraising is expected. It is 1.53-1.79 billion US dollars.
Not a medical beauty industry disruptor, is an information service provider
The previously submitted prospectus disclosed some of the business data. New oxygen has been profitable since 2017. In 2016, the new oxygen loss reached 81.036 million yuan; in 2017, the net profit reached 17.02 million yuan; the net profit in 2018 was 55.08 million yuan, a year-on-year increase of 220%.
In terms of revenue, total revenue in 2018 reached 617 million yuan, a year-on-year increase of 138%. The income mainly comes from two aspects: information service is 415 million yuan, accounting for 67.3% of total revenue; booking service is 202 million yuan, accounting for 32.7%. Among them, the growth rate of service income is higher than the predetermined service income.
New oxygen's main business includes three parts: original content, that is, writing articles on various content platforms; UCG community, user-generated content; online medical appointment service.
In the online medical beauty booking service, New Oxygen will charge a 10% subscription service fee from the order paid by the consumer, which is the source of income for the booking service. Information services, that is, advertising revenue, are mainly derived from the first two businesses. As can be seen from the data, advertising revenue accounts for the majority of revenue. In addition, the advertising revenue of new oxygen has come not only from medical service providers, but also from a wide range of consumer medical services.
In the cost of new oxygen 2018, sales and marketing expenses exceeded 306 million yuan, far exceeding the administrative expenses of 75 million yuan and research and development expenses of 95 million yuan. On the other hand, sales and marketing expenses increased by 140.4% compared with 127 million in 2017. The prospectus shows that most of this cost is used for marketing and acquisition of users.
“Venus hopes that the new oxygen in the future will not only solve the basic problems of information asymmetry for the industry, but also become an indispensable infrastructure for the entire industry.” In the new self-positioning of oxygen, this is a commitment to change. A technology company in the medical beauty industry.
However, new oxygen's current business has little to do with technology in terms of both revenue and cost spending-revenue comes mainly from content advertising and transit fees, and spending is mainly spent on marketing and customer acquisition rather than technology research and development. At least for now, the new oxygen is still in the phase of burning money to get traffic and users, and it's a long way to go before technology upends the dream.
According to the prospectus, the main purpose of the offering is to retain talented employees through equity incentives and to receive additional funding. New oxygen plans to invest 30 percent of its net proceeds in technology and R & D; 20 percent brand promotion and user acquisition; 20 percent horizontal and vertical expansion; 10 percent enhanced content delivery; and business operations and potential investments and acquisitions.
New oxygen is willing to continue to invest in research and development, but the reason for listing should not only be here.
According to Frost & Sullivan, the total income of China's medical service industry in 2018 reached 121.7 billion yuan, and is expected to reach 3601 billion yuan by 2023. As the scope of new oxygen revenue sources expands, we need to extend our horizons to a broader consumer healthcare sector. In 2018, China's consumer medical services industry generated revenues of RMB 560.7 billion ($81.6 billion).
Industry prospects are broad, but the new oxygen in the cake is not much. As the market expands, new oxygen is facing more and more competitors.
In July 2018, more beautifully announced the completion of the $50 million D1 round of financing, and the opponents in the vertical field were Yuemei and United Lige. Other domestic Internet giants have gradually entered the market. The US group established the Beauty Division, and also held the medical and beauty industry summit in January this year; Ali Health and Ailjian signed a strategic agreement to launch a digital medical and aesthetic consumer education and consulting platform.
Compared with these enterprises, new oxygen also has its own advantages: early entry time, high user recognition, professional accumulation. According to official data, New oxygen has covered nearly 6000 consumer medical service providers in more than 300 cities in China; in the first quarter of 2019, the number of monthly active users of New oxygen mobile reached 1.93 million, and the number of paying customers reached 127300.