Preview of US stocks| Declining performance exacerbates liquidity risks, Marcelle small and "not beautiful"

Engage in designing shoes and clothing, one-stop home decoration services, customized travel products... Nowadays, customized consumption is becoming increasingly popular, with more diverse consumption scenarios and expanding market size. This reflects the trend of consumer upgrades, with people's personalized, diverse, and quality-oriented consumption demands, and also reflects the acceleration of digital transformation in production and distribution enterprises, innovative business models, to make supply and demand matching more precise. According to Frost & Sullivan, the growth of small-batch customized consumer goods in China in recent years is mainly attributed to the rise of fashion and designer brands driven by personalized demand, as well as investments from small and medium-sized enterprises. The market size of small-batch customized consumer goods has increased from 6.3 billion yuan in 2017 to 10.2 billion yuan in 2023, with a compound annual growth rate of 8.2%. In addition, the demand for personalized consumer goods will continue to accelerate in the future, and it is expected that from 2024 to 2028, the market for mass customized consumer goods in China will grow from 10.9 billion yuan to 16.1 billion yuan, with a compound annual growth rate of 10.2%. With the increasingly active track, there are naturally players entering the field. On February 18, Shanghai-based customized consumer goods manufacturer MaxsMaking Inc. (referred to as "Maxis Company") submitted an updated prospectus to the U.S. Securities and Exchange Commission (SEC), planning to apply for listing on the U.S. Nasdaq IPO under the stock code "MAMK". The company originally submitted a confidential application to the SEC on February 7, 2024, and on July 8, 2024, it received a notice of overseas issuance and listing registration from the International Cooperation Department of the China Securities Regulatory Commission. Maxis Company plans to issue 2 million shares of Class A stock at a price of $4 to $5 per share, with an expected fundraising amount between $8 million and $10 million. Significant decline in performance Liquidity concerns arise According to the prospectus, for the six months ended April 30, 2023, and April 30, 2024, the company achieved revenues of $15.38 million and $9.73 million, respectively, a year-on-year decrease of 36.7%; and achieved net profits of $0.98 million and $1.24 million, respectively, a year-on-year decrease of 20.59%. It can be seen from this that the company's recent revenue and net profit have both shown a certain downward trend. The declining growth and the lack of economies of scale have made Maxis' financial pressure seem more acute. According to the prospectus data, as of April 30, 2024, Maxis had approximately $3.64 million in outstanding short-term bank loans, mostly from four banks: Bank Of Ningbo, Zhejiang Mintai Commercial Bank, Zhejiang Yiwu Rural Commercial Bank, and Zhejiang Yiwu Rural Commercial Bank. In addition, the company also received about $420,000 in outstanding loans from third-party individuals, but these loans are interest-free and have no repayment conditions. At a time of high debt levels, the company's cash flow is not particularly strong - as of April 30, 2024, Maxis had about $230,000 in cash, with the main sources being the company's operations, bank loans, related party loans, and third-party loans. During the same period, the company's net cash used in operating activities was about $1.7 million, mainly due to a decrease in accounts receivable of about $1.7 million resulting from reduced income; IPO-related professional expenses decreased by about $650,000; and customer advances decreased by about $380,000 due to a decrease in sales. Currently, Maxis mainly relies on operating cash flow, debt financing, and financial support from major shareholders or investors to improve liquidity and capital sources. If additional funds cannot be raised when needed, or if there is a lack of sufficient funds to expand the business or capitalize on other business opportunities, the company's business, operating performance, financial condition, and cash flow will be adversely affected. Niche track soaring POD customization market leverages growth through collaboration? With the three major trends of "e-commerce, environmental protection, and personalization" in place, POD customization has shown high market attractiveness and flow potential among young consumer groups. In terms of specific category demands, clothing and accessories occupy a significant share of the POD market at 39.6%, while home decorations is the fastest growing sub-category. Lightweight products based on customized pet images continue to be in high demand on major platforms. In addition, personalized customized jewelry and digital accessories are gradually becoming new choices for young people to showcase their personalities and tastes. The POD (Print on Demand) industry is witnessing a surge in popularity, not only meeting the self-expression needs of young consumers but also leading innovation in various categories. With short development times, low inventory risk, high average customer spending, and flexible operations, POD demonstrates unique competitive advantages. Coupled with the maturity of digital intelligence and manufacturing technology, personalized clothing and customized home decorations have become the most sought-after products on major platforms. According to Frost & Sullivan's report, most orders in the Chinese customized consumer goods industry come from large enterprises. With a focus on corporate culture construction, the Chinese customized consumer goods market has been growing rapidly. From 2017 to 2023, the market size of customized consumer goods in China has grown from 138.7 billion yuan to 217.3 billion yuan, with a compound annual growth rate of 7.8%. It is expected that the industry will maintain a high growth rate, and from 2024 to 2028, the market size is expected to increase from 236.2 billion yuan to 343 billion yuan, with a compound annual growth rate of 9.8%. However, the competition in the niche track where Maxis operates in the customized consumer goods industry is also very intense. Specifically, the types of participants in the customized product industry are diverse, including large enterprises, medium-sized enterprises, small enterprises, and studios. Maxis belongs to the "small and beautiful" segment of the customized track. While the company is able to flexibly meet customers' unique needs and provide distinctive products, it may face shortcomings in production capacity, supply chain management, and brand promotion due to its small scale, and it also needs to cope with competition from medium and large enterprises in terms of resources, technology, and funding. Given this, in order for Maxis, with its weak fundamentals, to achieve economies of scale, it may need to enhance its competitive strength from multiple dimensions.