Hoson on the Hong Kong Stock Exchange

China’s e-  (EC) -related company, Hoson Electronic Commerce, which is listed on NASDAQ in the United States, is planning to be listed on the Hong Kong Stock Exchange .

According to a prospectus submitted by the company to the US Securities and Exchange Commission (SEC) on September 16, it will issue 40 million new shares to raise up to HK $ 4,156 million. The funds obtained from the duplicate listing will be used for expanding the customer base, strengthening digital marketing and logistics functions, and agile M & A (merger / acquisition).

Hoson Densho’s business is characterized by specializing in services that support EC such as major brand companies, so to speak, it is a black child in the Chinese EC industry. Specifically, it provides technical solutions, operates online stores, digital marketing, inventory management of products, and delivery agency. There are many customers of foreign brands such as Nike and Microsoft.

When it was founded in 2006, it started with services for member stores of Taobao, the largest online shopping company of Alibaba Group, but now it is the second largest group of Keito Group and the emerging major Pinduoduo Deploy services on multiple EC platforms such as Pinduoduo. We have also entered the service to support live commerce (demonstration sales by live online video) of the Chinese domestic version of the short video application TikTok and rival Kuaishou.

In the two years from 2017 to 2019, Hoson Densho’s sales increased more than 1.7 times from 4.15 billion yuan (about 64.3 billion yen) to 7.278 trillion yuan (about 112.8 billion yen). Net profit also increased from 210 million yuan (about 3.3 billion yen) to 280 million yuan (about 4.3 billion yen). As of June 2020, the number of customers of brand companies will reach 250.

Hoson Densho issues two types of shares with different numbers of voting rights per share. Alibaba’s largest shareholder is Alibaba, which holds 14% of the outstanding shares, but its voting rights are only 8.6%. Softbank, the second largest shareholder, holds 10.6% of the shares and 6.5% of the voting rights. On the other hand, Mr. Wen-Ai, the founding leader, holds only 5.5% of the shares, but holds 30.7% on a voting rights basis.

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