New Stock Research Report | Carrot (02549) starts listing today, introducing two cornerstone investors who collectively subscribe to approximately HK$313 million in shares.

Carote (02549) is a global kitchenware brand that has established a significant position in the online kitchenware sector in major markets such as China, the United States, Western Europe, Southeast Asia, and Japan since the launch of the "Carote (CAROTE)" brand eight years ago, becoming one of the fastest-growing kitchenware brands globally. Offering date: September 23-26 Listing date: October 2 Joint sponsors: Credit Suisse, CICC Receiving bank: CMB Wing Lung Bank Approximately 129 million shares will be offered, with approximately 90% allocated and approximately 10% publicly offered, with an additional 15% overallotment option. If the public offering is subscribed 15 times or more but less than 50 times, the public offering portion may increase from 10% to 30%; if subscribed 50 times or more but less than 100 times, it may increase to 40%; and if subscribed 100 times or more, it may go up to 50%. However, if the allocation is not fully subscribed and the public offering is fully subscribed, or if both are fully subscribed but the public offering is less than 15 times, the public offering portion can increase to a maximum of 20%, subject to lower pricing. The offering price per share is HKD 5.72 to HKD 5.78, raising approximately HKD 750 million, representing approximately 24.2% of the total market value, with an estimated listing cost of approximately RMB 62 million. Based on offering price of HKD 5.78, the market value is approximately HKD 30.953 billion, with a P/E ratio of approximately 11.6 times based on adjusted net profit of approximately RMB 242 million in 2023. As of end of March 2024, the average net asset value is approximately RMB 212 million. The business: Revenue for years 2021 to 2023 were RMB 675 million, RMB 768 million, and RMB 1.58 billion respectively, with revenue for the first three months of 2024 at RMB 502 million. Gross profit for years 2021 to 2023 were RMB 126 million, RMB 275 million, and RMB 565 million respectively, with gross profit for the first three months of 2024 at RMB 209 million. Net profit for years 2021 to 2023 were RMB 31.7 million, RMB 108 million, and RMB 236 million respectively, with net profit for the first three months of 2024 at RMB 88.5 million. Adjusted net profit for years 2021 to 2023 were RMB 31.7 million, RMB 108 million, and RMB 242 million respectively, with adjusted net profit for the first three months of 2024 at RMB 97 million (excluding listing cost). The company is headquartered in Hangzhou, China, and was founded in 2007. Originally, the company provided OEM services to overseas brands. In 2013, the company shifted focus to ODM business, designing, developing, and manufacturing customized kitchenware products for international brand owners and retailers based on market demand insights gained from ODM business. Leveraging the expertise gained from ODM business and insights into consumer preferences, the company strategically entered the online retail sector in 2016, launching its own kitchenware brand "Carote (CAROTE)". This move was a significant milestone, focusing on a business model that directly engages customers through online sales channels to reflect an understanding of market demands. This strategic initiative quickly positioned the company as a rapidly growing kitchenware brand. The company operates ODM business and brand business, with the latter being a strategic focus for future growth and development. The brand business achieved rapid growth, with revenue from this segment increasing significantly from RMB 283 million in 2021 to RMB 1.379 billion in 2023, representing a compound annual growth rate of 120.7%. For the three months ending March 31, 2024, brand business revenue reached RMB 450 million, an 82.6% increase from the same period in 2023. The company offers a variety of kitchenware products to consumers, from basic cookware to well-designed tableware and beverage containers, aiming to meet different needs in various kitchen scenarios and enhance customer cooking experience. The company's products emphasize utility and value, providing practical, well-designed, and affordable products to promote a modern cooking lifestyle. Around 35% of the funds raised will be used for seeking acquisition and investment opportunities; approximately 25% for product research and development; approximately 20% for expanding sales channels; approximately 10% for ESG-related investments; and approximately 10% for operating funds and other general corporate purposes. Pre-IPO financing: In July 2023, the company sold shares to Mr. Hartinger at a discount of approximately 96.7% from the midpoint price, with a 6-month lock-up period. After the global offering, he will hold approximately 0.76% of the shares. Mr. Hartinger has extensive experience in the kitchenware industry, and his experience is expected to contribute to the company from an investor's perspective. Cornerstone Investors: Two cornerstone investors subscribed a total of USD 40 million (approximately HKD 313 million) in shares, with David Su subscribing USD 20 million and Mr. Peng Zhijian subscribing USD 20 million, representing approximately 41.94% of the offering shares at the midpoint price, with a 6-month lock-up period. Major Shareholder Structure after Listing: Ms. Lv Yili and Mr. Zhang Guodong hold 74.69% of shares. Mr. Zhang Jincai, Ms. Meng Haifang, Mr. Xia Chenhao, and Ms. Xue Yuan'er collectively hold 0.3% of shares. Pre-IPO investor Mr. Hartinger holds 0.76% of shares. Other shareholders hold 24.25% of shares. Summary: Carote is a global kitchenware brand that has established a significant position in the online kitchenware sector in major markets such as China, the United States, Western Europe, Southeast Asia, and Japan since the launch of the "Carote (CAROTE)" brand eight years ago. Based on offering price of HKD 5.78, the market value is approximately HKD 30.953 billion, with a P/E ratio of approximately 11.6 times based on adjusted net profit of approximately RMB 242 million in 2023. Two cornerstone investors, with a total subscription of USD 40 million (approximately HKD 313 million) in shares, account for approximately 41.94% of the offering shares at the midpoint price, with a 6-month lock-up period. This article is provided by "CSC Financial".Author: Chen Bohao, Analyst of Guotai Junan Securities; GMTEight Editor: Chen Wenfang.I am going to the library to study for my exam.