US Stock IPO Outlook | Under the dividends of the home appliance trade-in policy, JRWP.US (JRWP.US) accelerates its IPO in the US

Beginning in 2025, the National Development and Reform Commission and the Ministry of Finance issued the “Notice on Strengthening the Expansion and Implementation of Large-scale Equipment Renewal and Consumer Goods Trade-In Policies in 2025”, which included mobile phones, tablets, and smart wearable devices in the scope of subsidies, while continuing to carry out trade-in subsidy activities for home appliances. Furthermore, this year's two conferences announced 300 billion dollars of special treasury bonds, continuing to increase the two new countries' consumption stimulus policies, and adding dishwashers, water purifiers, microwave ovens, and rice cookers to the household appliances category to the national supplement list.

According to relevant statistics, among the categories participating in the subsidy, retail sales of range hoods, gas stoves, dishwashers, etc. in the online market surged by more than 50% year on year in February; retail sales of categories such as air conditioners, range hoods, gas stoves, dishwashers, water purifiers, and built-in micro-steamers in the offline market all exceeded 100% year on year. At a time when the home appliance industry is very popular, the enthusiasm of companies in the industrial chain to go public has once again been ignited.

The Zhitong Finance App learned that recently, Chinese home appliance retailer Jingrui Wangpu (JRWP.US) submitted an initial public offering (IPO) application to the US Securities and Exchange Commission (SEC). It plans to issue 1.3 million shares at a price of 4 to 6 US dollars each, raising 6 million yuan (US dollars, same below). Based on the midpoint of the proposed issue price range, the market value of Jingrui Wangpu will reach 106 million US dollars.

What are the highlights of Jingrui Wangpu in this listing? Let's look for answers in its prospectus.

The business structure was optimized and adjusted, and net profit was steadily improving

According to the Zhitong Finance App, Jingrui Wangpu is headquartered in Hangzhou. It was founded in 2002. It is a wholesale and retailer of electrical appliances. Its products include air conditioners, refrigerators, televisions, washing machines, dryers, dishwashers, range hoods, electric kettles, food processors, and rice cookers. Up to now, the company has opened 9 retail stores and developed 20 wholesale distributor customers.

According to the prospectus, in fiscal year 2023 and fiscal year 2024 (“reporting period”) ending March 31, the company's revenue was 9.4037 million yuan and 10.6521 million yuan, respectively, an increase of 13.28% over the previous year. In the first half of fiscal year 2025, the company's revenue further increased to 6.1641 million yuan, an increase of 25.4% over the previous year.

Looking at the breakdown, the company's business is mainly divided into electrical appliance sales, electricity-related services and leasing services.

Among them, sales of electrical appliances mainly sell various electrical products to customers, which is the company's main source of revenue. In fiscal year 2023, fiscal year 2024, and the first half of fiscal year 2025 (“reporting period”), the electrical appliance sales business achieved revenue of 8.82 million yuan, 9.47 million yuan and 5.44 million yuan, but while revenue continued to grow, the revenue share of this business declined. It was 93.8%, 88.9%, and 88.3% respectively during the period.

The Zhitong Finance App notes that the decline in the revenue share of the electrical appliance business is mainly due to the increase in the share of revenue from the electrical-related service business.

According to the prospectus, electricity-related services include after-sales maintenance and repair services and consulting services for electrical products. During the reporting period, revenue from this service was 570,000 yuan, 1.17 million yuan, and 720,000 yuan respectively. The revenue share increased from 6.0% in fiscal year 2023 to 11.0% in fiscal year 2024, and further increased to 11.6% in the first half of fiscal year 2025.

While revenue is improving, the company's profitability continues to increase. During the reporting period, the company's gross margins were 22.4%, 26.2% and 25.5% respectively; net profit was 995,500 yuan, 1,078,600 yuan, and 5210,000 yuan, respectively.

According to the Zhitong Finance App, changes in the gross margin of Jingrui Wangpu are related to the company's product portfolio. Among them, the company's gross margin of retail sales of electrical products is higher than the gross profit margin of wholesale products. According to the prospectus, the gross margin of the company's retail sales of electrical products generally remains in the range of 15% to 20%, while the gross margin of wholesale sales to distributors is about 10%. In fiscal year 2024, in order to improve the company's profitability, Jingrui Wangpu focused more on retailing appliances to customers. While driving retail revenue growth of 12.3%, the company's profitability also increased.

The home appliance industry is fiercely competitive

Looking at the industry, in the past ten years, China's home appliance industry has experienced a profound transformation from incremental expansion to inventory competition.

The Zhitong Finance App learned that the three years of the epidemic have had a huge impact on our national electronics market. With the release of the epidemic, the trend of recovery in the home appliance market is not significant, mainly due to high ownership in the home appliance market, some consumer categories have become optional, consumption frequency is low, and demand for upgrading is not urgent. Data show that in 2023, the size of China's electronics market reached 849.8 billion yuan, returning to 95.4% of retail sales before the epidemic, an increase of 3.6 percentage points over the previous year. It can be seen that under various factors, the home appliance industry is showing a slow recovery trend.

In 2024, the addition of national supplements brought about significant changes in the cycle and market logic of China's home appliance industry.

According to data from the “2025 White Paper on Home Appliance Retail and Innovation in China”, retail sales in the home appliance market (excluding 3C) fell 3.6% year on year in the first eight months of 2024, while in September-December they increased 23.8% year on year. It can be seen that the implementation of the trade-in policy became a clear watershed for the home appliance market in 2024, bringing a structural rebound to the industry. It is worth noting that

Some analysts pointed out that although the “national subsidy” policy has driven a sharp rise in the volume and price of some products, an increase in retail traffic, and an improvement in consumer demand, in the medium to long term, due to various factors such as consumption, real estate, and population, the industry is currently facing the main challenges of “difficult customer acquisition, transformation, and innovation.”

According to the forecast of Aowei Cloud Network, considering factors such as the demand for some household appliances that have been overdrawn in 2024, consumer interest in home appliance subsidies may gradually decline, and the high retail base of home appliances stimulated by the “national subsidy” policy in the second half of 2024, although the “national subsidy” policy continues in 2025, the retail scale of all categories of domestic home appliances is expected to increase only slightly year-on-year in 2025.

Furthermore, judging from market competition, Jingrui Wangpu is facing fierce market competition, especially in the electrical appliance sales and maintenance service market. Among them, in the Chinese electrical appliance sales market, the company's competitors include wholesalers and retailers of various electrical appliance brands, while the maintenance service market faces competition from competitors such as 58.com and Woodpecker Maintenance. Jingrui Wangpu admits that some of the company's large competitors have a wider range of products or services and have more working capital to support sales and marketing expenses.

It is worth noting that Jingrui Wangpu is also facing price pressure brought about by online retailers.

Driven by the digital wave, online shopping has gradually become an important channel for consumers to buy products. According to data from the National Bureau of Statistics, in 2024, the country's online retail sales reached 15.52 trillion yuan, an increase of 7.2% over the previous year. It has been the largest online retail market in the world for 12 consecutive years. Among them, online retail sales of physical goods were 13.08 trillion yuan, an increase of 6.5% over the previous year, accounting for 26.8% of total retail sales of social consumer goods. The growth rate was 3 percentage points higher than the zero sales rate of social goods.

However, up to now, Jingrui Wangpu has not started online sales. The company's home appliance sales still rely on physical stores and only provide appliance maintenance and repair services through online channels. Among risk factors, the company admits that if the company is unable to compete with existing online retailers in terms of price and service, its business and revenue will be adversely affected.

Taken together, in the highly competitive home appliance sales market, Jingrui Wangpu's advantage is not obvious. In the short term, the company achieved an increase in revenue and profitability by adjusting the business structure, but in the long run, Jingrui Wangpu, which has not developed an online platform and has a relatively small business scale, wants to gain recognition from the capital market.