IPO Update: Yi Po International (YBZN) Finalizes Proposed IPO Terms

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A Quick Take On Yi Po International

Yi Po International (YBZN) has filed to lift $20 million in gross proceeds from the sale of its frequent stock in an IPO, in line with an amended registration assertion.

The firm gives parking zone operators in China with techniques to handle and optimize their operations, and operates parking tons for its personal account.

Given that Yi Po operates primarily two companies, it’s tough to find out an inexpensive valuation.

Accordingly, I’m on Hold for Yi Po’s IPO, though the low nominal value of IPO shares will in all probability entice day merchants searching for volatility.

Yi Po International Overview

Nanjing, China-based Yi Po was based to develop a parking administration expertise platform for parking zone operators who want to improve the effectivity and choices for his or her car proprietor clients.

Management is headed by Chairman and CEO Weiming Jin, who has been with the agency since August 2018 and was beforehand Chairman and CEO of Lanzhou Kangzheng Hengxin Automobile Sales Co.

The firm’s major choices embody:

  • Automatic car login

  • Entrance and exit authentication

  • Vehicle monitoring

  • Charging administration

  • Navigation steering

  • Parking house search

Yi Po has booked truthful market worth funding of $340,000 as of December 31, 2021, from traders together with Chairman and CEO Weiming Jin and others.

Yi Po – Dealer Acquisition

The agency seeks relationships with area sellers to promote its techniques to parking zone operators.

Yi Po focuses its efforts on main verticals, together with the transportation, property administration and concrete planning industries.

Selling and Marketing bills as a proportion of whole income have risen barely as revenues have elevated, because the figures beneath point out:

Selling & Marketing

Expenses vs. Revenue

Period

Percentage

2021

0.6%

2020

0.2%

(Source – SEC)

The Selling and Marketing effectivity charge, outlined as what number of {dollars} of extra new income are generated by every greenback of Selling and Marketing spend, was 77x in the latest reporting interval. (Source – SEC)

Yi Po’s Market & Competition

According to a 2021 market research report by Mordor Intelligence, the worldwide parking administration market was an estimated $3.5 billion in 2020 and is forecast to develop to $6.5 billion by 2026.

This represents a forecast CAGR of 10.3% from 2021 to 2026.

The primary drivers for this anticipated development are elevated urbanization leading to rising automobile parking demand and a want from operators for larger efficiencies in operation.

Also, expertise enhancements in offering parking zone standing, capability and different transportation associated companies will add to operator demand.

Major aggressive or different trade members embody:

  • Beijing Yuechang Technology

  • Shenzhen Jieshun Technology Industrial Co.

  • Jiangsu Wuyang Parking Industry Group Co.

  • Xiamen Ketuo Communication Technology Co.

  • Others

Yi Po International Holdings’ Financial Performance

The firm’s current monetary outcomes will be summarized as follows:

  • Growing topline income, however from a small base

  • Increasing gross revenue and gross margin

  • Growing working revenue

  • Reduced money move from operations

Below are related monetary outcomes derived from the agency’s registration assertion:

Total Revenue

Period

Total Revenue

% Variance vs. Prior

2021

$ 5,277,517

89.4%

2020

$ 2,786,853

Gross Profit (Loss)

Period

Gross Profit (Loss)

% Variance vs. Prior

2021

$ 4,260,139

103.1%

2020

$ 2,097,352

Gross Margin

Period

Gross Margin

2021

80.72%

2020

75.26%

Operating Profit (Loss)

Period

Operating Profit (Loss)

Operating Margin

2021

$ 2,014,927

38.2%

2020

$ 652,883

23.4%

Net Income (Loss)

Period

Net Income (Loss)

Net Margin

2021

$ 1,948,612

36.9%

2020

$ 480,230

9.1%

Cash Flow From Operations

Period

Cash Flow From Operations

2021

$ 1,115,730

2020

$ 1,356,334

(Glossary Of Terms)

(Source – SEC)

As of December 31, 2021, Yi Po had $332,083 in money and $14 million in whole liabilities.

Free money move in the course of the twelve months ended December 31, 2021, was $762,093.

Yi Po’s IPO Details

YBZN intends to promote 4 million shares of frequent stock at a proposed midpoint value of $5.00 per share for gross proceeds of roughly $20.0 million, not together with the sale of customary underwriter choices.

No present or probably new shareholders have indicated an curiosity to buy shares on the IPO value.

Assuming a profitable IPO on the midpoint of the proposed value vary, the corporate’s enterprise worth at IPO (excluding underwriter choices) would approximate $58 million.

The float to excellent shares ratio (excluding underwriter choices) shall be roughly 28.6%. A determine below 10% is mostly thought of a ‘low float’ stock which will be topic to vital value volatility.

Per the agency’s most up-to-date regulatory submitting, it plans to make use of the web proceeds as follows:

Proposed Use Of Proceeds

Proposed Use Of Proceeds (SEC EDGAR)

(Source – SEC)

Management’s presentation of the corporate roadshow is just not obtainable.

Regarding excellent authorized proceedings, aside from a labor continuing settlement totaling $98,000, administration says there are not any different materials authorized proceedings in opposition to the agency.

The sole listed bookrunner of the IPO is Boustead Securities.

Valuation Metrics For Yi Po

Below is a desk of the agency’s related capitalization and valuation metrics at IPO, excluding the consequences of underwriter choices:

Measure [TTM]

Amount

Market Capitalization at IPO

$70,000,000

Enterprise Value

$58,000,000

Price / Sales

13.26

EV / Revenue

10.99

EV / EBITDA

28.79

Earnings Per Share

$0.13

Operating Margin

38.18%

Net Margin

36.92%

Float To Outstanding Shares Ratio

28.57%

Proposed IPO Midpoint Price per Share

$5.00

Net Free Cash Flow

$762,093

Free Cash Flow Yield Per Share

1.09%

Debt / EBITDA Multiple

0.00

CapEx Ratio

3.16

Revenue Growth Rate

89.37%

(Glossary Of Terms)

(Source – SEC)

Commentary About Yi Po

Yi Po is searching for U.S. capital market funding to fund continued growth of its parking zone administration techniques and to amass extra parking tons for in-house administration.

The firm’s financials have produced rising topline income, however from a small base, rising gross revenue and gross margin, larger working revenue however lowered money move from operations.

Free money move for the twelve months ended December 31, 2021, was $762,093.

Selling and Marketing bills as a proportion of whole income have risen barely as income has elevated and its Selling and Marketing effectivity a number of rose sharply to 77x in 2021.

The agency presently plans to pay no money dividends on its capital stock within the foreseeable future.

The firm’s CapEx Ratio is 3.16, which signifies it’s spending materially on capital expenditures as a proportion of its working money move.

The market alternative for parking zone administration techniques within reason massive and is anticipated to develop at above 10% CAGR over the approaching years.

Like different Chinese companies searching for to faucet U.S. markets, the agency operates inside a VIE construction or Variable Interest Entity. U.S. traders would solely have an curiosity in an offshore agency with contractual rights to the agency’s operational outcomes however wouldn’t personal the underlying belongings.

This is a authorized grey space that brings the chance of administration altering the phrases of the contractual settlement or the Chinese authorities altering the legality of such preparations. Prospective traders within the IPO would wish to issue on this vital structural uncertainty.

Additionally, the Chinese authorities crackdown on IPO firm candidates mixed with added reporting necessities from the U.S. facet has put a severe damper on Chinese IPOs and their post-IPO efficiency.

Boustead Securities is the lead underwriter, and IPOs led by the agency over the past 12-month interval have generated a median return of 4.9% since their IPO. This is an upper-tier efficiency for all main underwriters in the course of the interval.

The major dangers to the corporate’s outlook are the unpredictable nature of Chinese regulatory insurance policies on the agency’s enterprise operations or presumably on its U.S. stock itemizing standing, given the continued dispute over entry to auditor data by the PCAOB.

As for valuation, administration is asking IPO traders to pay an EV/Revenue a number of of round 11x. While the corporate is rising topline income rapidly, it’s from a small base.

Also, on condition that Yi Po operates primarily two companies, one a parking zone operator and one other for the sale of parking zone administration techniques, it’s tough to find out an inexpensive valuation.

Accordingly, my outlook for Yi Po is on Hold, though the low nominal value of IPO shares will in all probability entice day merchants searching for volatility.

Expected IPO Pricing Date: To be introduced



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