Reading Lang landing in the Hong Kong Stock Exchange: On the first day of listing, the issue price fell below the issue price, and investors called it "gambling loser"

On July 12, Reading Lang Education Holdings Co., Ltd. (hereinafter referred to as "Reading Lang", HK: 02385) was listed on the Hong Kong Stock Exchange. This time, the issuance of Reading Lang's issuance is HK $ 7.60/share, and it is planned to issue 52 million shares. The net fundraising amount is about 365 million Hong Kong dollars.

On the first day of the listing, the read Lang fell below the IPO issuance price. According to Berto Finance, Reading Lang's opening reported at HK $ 5.40/share on July 12, 2022, a decline of 28.95%, but then narrowed. As of the afternoon, the stock price of Reading Lang temporarily reported to HK $ 6.69/share, a decline of about 11.97%.

According to this calculation, the total market value of Reading Lang was approximately HK $ 2.355 billion, a decrease of about 320 million Hong Kong dollars when it was listed. It is understood that when Reading Lang introduced eight cornerstone investors during the IPO, it will subscribe for a total of 28.1966 million shares (approximately HK $ 214 million) at the selling price of HK $ 7.60, which will be issued. The offering of equity has not been exercised).

This means that the total book losses of the eight cornerstone investors of Reading Lang are approximately HK $ 25.62 million. According to the prospectus, the eight cornerstone investors are Zheng Changping, Gui Chunfang, Azure Telecommunication, Jin Shunlong, TOWER Lead, Dongfangyuan, Yang Xiaodi and Jin Tao.

Regarding the performance of the first day of the listing of Reading Lang, some investors commented in the community that "not losing is to lose Lang." Some investors also claim to read the Lang Lang as "gambling loser", and some investors said that "carrying leeks to the school." According to Berto Finance, this comes from "Xiao Erlang" sung by Zhuo Yiting. Among them, the lyrics mentioned "Xiao Mu Children, carrying the schoolbag to the school."

The lyrics of "Xiao Erlang" also wrote: I'm not afraid of the sun, nor are they afraid of the storm, I'm afraid that the gentleman scolds me laziness. Seeing my father and mother, I am afraid that my husband scolds me laziness, and I do n’t learn to see my father and mother ...

The prospectus shows that the revenue of Reading Lang in 2019, 2020 and 2021 was about 670 million yuan, 734 million yuan and 813 million yuan, respectively, with an average annual compound growth rate of 10.16%; net profit (annual profit and total comprehensive income). They were 69.435 million yuan, 920.13 million yuan, and 82.146 million yuan, of which 10.72%of them were year -on -year in 2021.

Under the measurement of non -Hong Kong Financial Report Guidelines, the adjustment of the adjustment of net profit in 2019, 2020, and 2021 was 69.435 million yuan, 920.13 million and 770.03 million yuan, respectively. 9.5%. Among them, the adjustment of net profit in 2021 decreased by 16.31%year -on -year.

Regarding the decline in the scale of profit, Reading Lang stated in the prospectus that it is mainly because the gross profit decreases due to the increase in raw material costs. At the same time, the company generated additional expenses on this listing in 2021, and because the gross profit margin decreased due to the increase in raw material costs, Reading Lang Lang Lang Lang The net profit margin of education dropped from 12.5%to 9.5%.

Correspondingly, the gross profit margin of Reading Lang fell sharply in 2021. The prospectus shows that in 2019, 2020 and 2021, the gross profit margin of Reading Lang was 26.0%, 27.5%, and 20.8%, respectively, of which the gross profit margin in 2021 decreased by about 6.7 percentage points year -on -year.

It is worth mentioning that the personal tablet gross profit margin of the students who contributed to the main income and gross profit of Reading Lang has fallen significantly, and it has fallen for two consecutive years. During the reporting period, the revenue from the student's personal tablet was 541 million yuan, 665 million yuan, and 705 million yuan, respectively, and the gross profit margin was 28.2%, 27.5%and 20.0%, respectively.

Although it is known as the "intelligent learning equipment service provider", the R & D expenses of Reading Lang are not high. The prospectus shows that the R & D expenditure of Reading Lang in 2019, 2020, and 2021 is R & D and development expenditure of 36.428 million yuan, 30.211 million yuan and 43.87 million yuan, accounting for 5.4%, 4.1%and 5.4%of the total revenue, respectively.

As of the end of the actual feasible date, Reading Lang has obtained 212 patents in China. According to smart bud data, there are 702 patent application information in Reading Lang and its subsidiaries, most of which are invention patents and practical new models. It can be seen through algorithm analysis that its patent layout is mainly focused on scanning pens, cameras, smart table lamps, smart watches, display screens and other technologies.

As far as the industry is concerned, Reading Lang quoted Fhstrisana in the prospectus that in 2021, according to the total retail market value, Reading Lang ranked second among China ’s intelligent learning equipment service providers; The equipment shipment meter ranked fifth among China's intelligent learning equipment service providers.

The Fhstan Sands report also showed that in 2021, according to the total retail market value, the retail market value of step -by -step height was approximately RMB 9.5 billion, and the market share was 28.9%. During the same period, the retail market value of Reading Lang was 2 billion yuan, and the corresponding market share was 6.1%, which was lower than the step -by -step height.

As far as the shipment of the retail market in 2021 is concerned, the high shipping volume is as high as 7.7 million units, and the operational gangs, Youxue World, and 360 are 1.8 million units, 1.7 million units, and 1.3 million units.700,000 units, far behind the top four participants.From this point of view, the competition faced by Reading Lang is very fierce and the advantage is not obvious.In the future, Reading Lang will not only strengthen the efficiency of internal operations, but also find its own positioning in market development, and seek differentiated competition in order to have the opportunity to highlight the surrounding of competition.

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