US stock new stock prospects | Weibus: "Custom charter service platform" born in Hangzhou, behind the sharp decrease in income of 70%, the pain of business transformation.

In 2024, the field of mobile travel has kicked off a wave of capital, with many companies embarking on the path to going public. For example, CHENQI TECH, Xiao Ma Zhixing, and Wen Yuan Zhixing. At the beginning of 2025, there are also companies in the one-stop customized charter industry heading to the capital market. Recently, Zhejiang Yuba Technology Co., Ltd. from Hangzhou, Zhejiang, with its substantial controlling shareholder WEBUS INTERNATIONAL LIMITED (hereinafter referred to as "Yuba") has updated its prospectus with the U.S. Securities and Exchange Commission (SEC), with the stock code WETO, and plans to list on the NASDAQ through an IPO in the United States. It previously submitted a confidential filing with the SEC in the United States on September 23, 2022, and then publicly disclosed the prospectus on February 10, 2023. There are reports that this company, which started out with "customized buses," may be rewriting the rules of global travel. What is its fundamental situation? Revenue decreased by about 70% Focus on "small and beautiful" growth According to the prospectus, Yuba adopts a "Mobility as a Service" (MaaS) business model, providing customized commuter bus services, charter and bus services, and group tour services for business and leisure travel for customers around the world through its integrated digital platform in different scenarios to identify and solve inefficient issues related to inflexible or low-quality mobility solutions. Yuba's online channels are diverse, including apps, official websites, WeChat, and Alipay mini-programs. These online channels make it convenient for users to book and inquire about services anytime and anywhere. In addition, Yuba has partnered with the three major online travel agencies in China, Ctrip, Fliggy, and Tongcheng, as well as establishing a certified partnership with Xiaohongshu. Through these partnerships, Yuba can better promote its services and attract more users. In addition to online channels, Yuba's offline channels are also very extensive. By strategic cooperation with more than 50 cities and counties in Zhejiang Province, Yuba is able to provide convenient travel services to local residents in various regions. Travel agencies, online bus booking platform gotobus, and service desks set up at transportation hubs such as Hangzhou high-speed rail stations, airports, etc. provide users with more booking and inquiry channels. Yuba has more than 11,000 dispatchable vehicles in China, providing strong service support. Whether for intra-city or inter-city travel, Yuba can quickly allocate vehicles to meet the needs of users. Overseas, there are about 8,000 drivers providing charter services, which expands Yuba's service coverage globally. In the past fiscal years of 2023 and 2024 (the fiscal year ending on June 30 of each year, hereinafter referred to as the "reporting period"), Yuba's revenues were 154 million yuan and 46 million yuan respectively, a decrease of 70%. Net losses were 17.63 million yuan and 4.0556 million yuan respectively, indicating continuous losses. In terms of business segments, revenue from package tours during the reporting period was 81.03 million yuan and 33.91 million yuan, a year-on-year decrease of 58.8%, mainly due to a decrease in the domestic market. Revenue from customized charter and bus services was 63.65 million yuan and 10.73 million yuan respectively, a year-on-year decrease of 83.1%; revenue from commuter bus services was 9.5071 million yuan and 1.8539 million yuan respectively, a year-on-year decrease of 80.5%. Overall, the business has shrunk, especially the significant decline in revenue in package tour services, which accounted for more than half of the revenue, resulting in a significant drop in total revenue. In addition, the shrinkage of the main business is behind the narrowing of the domestic market business scale. The company stated that for the purpose of optimizing long-term financial indicators and adjusting brand positioning, we have adjusted our business strategy to focus more on the higher-margin package tour services provided to the overseas market. It is gratifying that the gross profit margin of package tours has increased significantly, reaching 4.1% and 14.5% respectively, while the gross profit margin of customized charter services has grown even more significantly, from 5.4% in the fiscal year 2023 to 20.6% in the fiscal year 2024. The increase in gross profit margin has driven an improvement in the company's profitability. In addition to the improvement in profitability, the improvement in expenses has also led to a narrowing of Yuba's losses. The total operating expenses of the company during the reporting period were 27.4525 million yuan and 13.8978 million yuan respectively, a year-on-year decrease of 49.38%, including a 49% decrease in sales and marketing expenses to 7.4683 million yuan; a 51% decrease in general and administrative expenses to 5.0985 million yuan; and a 46% decrease in research and development expenses to 1.3898 million yuan. The effect of cost reduction is undoubtedly significant, with Yuba's net cash flow turning positive in the fiscal year 2024, at 55,000 yuan, compared to -4.759 million yuan in fiscal year 2023. Cash and cash equivalents during the period were 2.1511 million yuan and 2.7809 million yuan, showing a slight increase. By sacrificing business scale and focusing on "small and beautiful" growth, how long can Yuba's growth last? Optimistic outlook but competition pressure remains From the perspective of industry development assistance, the industry Yuba is in is mainly characterized by "opportunities and challenges". In recent years, the private group market has shown a strong growth trend and is expected to maintain a high growth rate in the coming years. With the continuous expansion of the Chinese outbound tourism market and the emergence of the middle and high-end consumer groups, private group travel is increasingly favored for its personalized and high-quality service characteristics. According to the "2023 Annual Tourism Consumption Report", private car tours account for 24% of the total number of bookings for travel products, with private car tour revenue reaching 1180 billion yuan in 2023, and is expected to increase to 1450 billion yuan by 2028. In addition, in the overseas market, in 2023, the estimated market size of Chinese overseas private group tours was about 8.7 billion US dollars. With the continuous growth of Chinese tourists' demand for outbound travel, the demand for tourism products that provide Chinese-language services is also increasing. Therefore, the market for Chinese overseas private group tours is expected to grow rapidly in the coming years. By 2028, the market size is expected to reach about 18.1 billion US dollars. For Yuba, this is the side of "opportunity", but it is also clearly an opportunity to seize the market with a low-price strategy for customized charter and group tours.The main reasons for the market share in the tourism industry.However, upon closer examination of its prospectus, the "challenges" facing WeBus in the fiercely competitive market landscape are also very obvious. Specifically, there are hundreds of online sharing travel service platforms in China, and the overall online sharing travel service market presents a fiercely competitive and highly fragmented structure. According to the prospectus disclosed earlier, as of the first half of 2022, WeBus ranked second in the market, and the total revenue of the top five online collective mobility service platforms was only 2.326 billion RMB, highlighting the high degree of fragmentation in this market. In addition, in the US market, WeBus also faces competition from local veteran competitors. Greyhound, a long-established American long-distance bus supplier founded over 100 years ago, was acquired by the German transportation app platform FlixMobility in October 2021, further penetrating the US market. As a result, WeBus stated in its risk disclosure that the company needs to compete with a large number of companies of different sizes, including subsidiaries or divisions of large companies, which may have more financial resources and a larger customer base than the company. If this competitive pressure leads to the company losing market share or declining profit margins, the company's business, financial condition, and operating performance may be significantly adversely affected. In summary, WeBus has chosen to reduce its revenue scale, focus on improving profitability, and thereby improve its financial data. However, concerns about its growth still persist due to the transformation pains behind the sharp decline in business scale and industry competitive pressures.