New Stocks Preview | Autohome.com: Accident Car Auction Leader Autohome.com Races for Hong Kong Stocks Again: Hidden Worries and Challenges Under the Halo.

On September 30, the Hong Kong Stock Exchange disclosed that Boche Holding Limited (Cayman) (hereinafter referred to as "Boche Net") has once again submitted an application for a main board listing, with CITIC SEC and FOSUN INTL Capital as joint sponsors. It is worth noting that this is Boche Net's second attempt to list on the Hong Kong Stock Exchange this year, with its first prospectus submitted on February 21. As a leader in the Chinese accident car auction industry, Boche Net has attracted widespread market attention with its unique business model and market share. However, its continuous losses and potential industry risks have added uncertainty to this IPO. Profit dilemma under the halo of the industry leader According to the report from Burnaby Consulting, Boche Net is the largest accident car auction platform in China, with a market share of 31.4% in 2024, ranking first in the industry. At the same time, the company is also the third largest B2B used car auction platform in China, with a market share of approximately 12.0%. This dual role highlights the critical position of Boche Net in the automotive aftermarket industry chain. The company's core business is to connect upstream car source providers and downstream buyers through the integrated auction platform of Wuxi Online Offline Communication Information Technology Co., Ltd. In the field of accident cars, the upstream mainly consists of insurance companies, while the downstream consists of certified repair shops and licensed car dismantling plants; in the used car field, the company serves various vehicle suppliers and car dealers. By 2024, China's car ownership had reached 350 million vehicles, providing a vast development space for Boche Net in the world's largest automotive market. Despite its industry-leading position, Boche Net cannot escape its profit dilemma. Financial data shows that from 2022 to 2024, Boche Net's revenue was 388 million yuan, 518 million yuan, and 526 million yuan. Behind the superficial growth curve lies a worrying trend - the impressive performance of a 33.5% year-on-year revenue growth in 2023 sharply slowed down to just 1.5% in 2024. This cliff-like decline clearly reflects the growth bottleneck the company is facing. A closer analysis reveals that Boche Net's core business - accident car auctions and related services (accounting for 52.5% of revenue in 2024) - has experienced a typical "increasing volume but decreasing price" phenomenon. In 2024, the number of accident car auctions reached 117,000, up 72% from 68,000 in 2022, but the average price per unit dropped from 42,700 yuan to 37,600 yuan, further declining to 37,300 yuan in the first seven months of 2025. This trend suggests that the company may be maintaining market share through a strategy of lowering prices, the sustainability of which is questionable. Boche Net's profit situation presents a contradictory twofold. During the reporting period, the company reported losses of 180 million yuan, 122 million yuan, 36 million yuan, and 56 million yuan, accumulating a total loss of 394 million yuan over three years and seven months. It is worth noting that the loss for the first seven months of 2025 has exceeded that of the entire year of 2024, with the loss widening again, a worrying trend. The company attributes these losses mainly to non-cash factors such as changes in financial instrument fair values and amortization of intangible assets acquired through acquisitions, emphasizing that its "adjusted net profit" has been good, reaching 11 million yuan, 42 million yuan, 51 million yuan, and 27 million yuan, respectively. Another indicator worth noting is the fluctuating decline in gross profit margin. During the reporting period, the company's gross profit margins were 44.4%, 49.9%, 46.4%, and 39.2%, showing a clear downward trend. In particular, it dropped to 39.2% in the first seven months of 2025, a decrease of over 10 percentage points from the peak in 2023. Boche Net's balance sheet also exposes multiple risks. As of July 31, 2025, the company's net current liabilities reached 1.721 billion yuan, further climbing from 1.646 billion yuan in 2022. Behind this abnormal data is the financial instruments issued to preferred shareholders being classified as liabilities, with a book value of 1.663 billion yuan as of the end of July 2025. This financial structure makes the success or failure of the company's listing a matter of life or death - if the listing is successful, these liabilities will be converted into equity; if the listing fails, it may trigger redemption obligations and lead to a serious liquidity crisis. This "either succeed or perish" capital structure adds significant uncertainty to investment decisions. While Boche Net has indeed established a leading market position in the accident car auction field, this position has not been effectively translated into sustained profitability and healthy financial conditions. With multiple issues like slowing growth, profit difficulties, and liquidity pressure intertwined, this IPO seems more like a "fight for survival" than a "path to development." The scale bonus and growth challenges of the billion-dollar track Against the backdrop of rapid development in the Chinese automotive industry, the sub-sector of accident car auctions is showing immense market potential. According to industry data, the volume of accident car auctions in China grew from around 206,000 vehicles in 2019 to 345,000 vehicles in 2023, with a compound annual growth rate of 13.8%. However, compared to the US market, where the volume of accident car auctions in 2023 is close to 7 million vehicles, about 20 times that of China, and with a similar number of cars registered in both countries (around 290 million each), this significant difference highlights the huge growth space in the Chinese accident car auction industry. It is estimated that by 2028, the total volume of accident car auctions in China will reach 867,000 vehicles, with a compound annual growth rate of 20.2% from 2023 to 2028. In this rapidly growing market, as the industry leader, Boche Net has taken a leading position with its unique competitive barriers. However, it also faces multiple challenges. The Chinese accident car auction industry presents a clear hierarchical competitive landscape. In 2023, the largest single participant held more than 30% of the market share, with the top five participants collectively owning about 56% of the market share, while the rest of the individual participants held less than 2% of the market share. This structure is similar to the US market, which is dominated by two giants, Copart and IAA, holding about 70% of the market share. As a leader in the industry, Boche Net ranked first with a market share of 31.3% in 2023. This leading position has brought significant advantages, but how to maintain market share while achieving high-quality growth remains a core issue for the company. Furthermore, the rapid popularization of new energy vehicles has brought profound changes to the accident car auction industry. New energy vehicles have significant differences in accident rates, repair costs, and residual value assessment compared to traditional fuel vehicles, requiring platforms to quickly adapt and establish professional capabilities. In particular, the professional technical thresholds related to battery safety, motor maintenance, etc., require the platform to invest a large amount of resources in capability building. While Boche Net has started to layout, the uncertainty remains as to whether it can keep up with the pace of technological change. In my view, Boche Net is facing a dilemma of increasing revenue without increasing profit. While transaction volumes continue to increase, a downward trend in per-vehicle revenue reflects the company's failure to find the optimal balance between scale expansion and profit improvement. From an investment perspective, the race track in which Boche Net operates has a clear growth outlook, with the company enjoying significant competitive advantages as a leader in the industry. Against the backdrop of an industry compound annual growth rate of 20.2% from 2023 to 2028, the company is expected to benefit from the industry dividend and achieve sustained growth. However, investors also need to be aware of the challenges the company faces, including increased competition, the transition to new energy, profitability, and pressure. Especially in the current capital market environment, investors are more concerned about a company's profitability and sustainability. The ability of Boche Net to translate its market position into sustainable profitability will directly affect its performance in the capital market.