China’s first listed bike-sharing firm surges in Shanghai debut
The company warns of the risk from the competition from apps such as Mobike and Ofo
China’s first listed bike-sharing firm surged to its 44 per cent debut limit on Thursday, the first day of trading in Shanghai after it raised 644.4 million yuan (US$96 million) in a public offer.
Shares of Changzhou Youon Public Bicycle System, the Jiangsu province-based company closed the day at 38.66 yuan, up 11.81 yuan from its IPO price of 26.85 yuan.
The company’s revenue reached 474.5 million yuan in the first six months this year, up 43.4 per cent compared with the same period last year. Net profit increased 21 per cent to 61.4 million yuan, according to its listing prospectus filed on the Shanghai stock exchange.
Youon’s main bike-sharing business is based on a government-invested sharing-lock bike service. It differs from “QR code scan”, no-pole model adopted by popular bike-sharing companies Ofo and Mobike, which allows users to rent and return a bike whenever and wherever they want through mobile devices without poles restriction.
Youon has 7.5 million users and offers its bike services across 210 Chinese cities, mainly in China’s third-tier cities and their surrounding towns and counties.
They contributed to almost 90 per cent of its recent revenue in the past three years, according to the prospectus.
Although the company expects the profit for the first three quarters this year “will be good”, it warned of the risk from the competition from Ofo and Mobike who have aggressively expanded their services.
“No-pole bike sharing service is likely to threaten our business if they heavily spread their service in the third or fourth-tier cities [the main regions that Youon covers],” Younon said in the prospectus.
The company has started to operate its dock-less bike sharing business in late 2016. It has deployed 50,000 bikes so far, which only accounts less than one per cent of its revenue.