U.S. Stock Market New Stock Preview: After a year and a half of preparation for a listing in the U.S., will this time a insurance company (UBXG.US) be successful?

In January 2022, U-BX Technology Ltd. (also known as "Youjia Insurance" or UBXG.US), headquartered in Beijing, officially submitted its F-1 document. Over the past year and a half, Youjia Insurance has updated its listing information multiple times in preparation for its IPO in the United States. Recently, Youjia Insurance received a notice of filing for its planned IPO in the United States. The company plans to issue up to 5 million shares of common stock for listing on the NASDAQ Stock Exchange. Boustead Securities LLC will be the underwriter, and Jiangsu Junjin will serve as the domestic lawyer for the IPO. This development signifies further progress in the IPO process. From the date of the notice of filing, Youjia Insurance has 12 months to complete the overseas listing. If the listing is not completed within this period, the company will need to update its filing materials if it wishes to proceed in the future. Will Youjia Insurance's path to a successful U.S. listing be achieved this time? Revenue relies on digital marketing, expected to turn a profit in the first half of 2023 Youjia Insurance was established in 2018 and has been focused on providing value-added services to insurance industry enterprises, including insurance operators and brokers, through AI-driven technology. Currently, the company's business mainly includes three services/products: 1. Digital marketing services, 2. Risk assessment services, and 3. Value-added bundled benefits. Among them, the digital marketing service helps its institutional clients gain visibility on various social media platforms and generate revenue based on consumer clicks, views, or promotional time through these channels. By using services and platforms provided by third parties, including content-based online platforms (such as Douyin and Kuaishou) and offline scene marketing platforms, Youjia Insurance tracks the progress of work, ensures compliance with client standards regarding promotional content, expected click-throughs, and views, analyzes the results of each promotion, and generates traffic reports for clients. Currently, digital marketing services account for over 70% of the company's business revenue, making it the main source of income. Youjia Insurance receives commissions from clients based on the number of user clicks and the promotional time of institutional clients on marketing channels. At the beginning of each month, clients develop monthly promotion budgets and reach an agreement with Youjia Insurance regarding specific promotion orders and content. After receiving confirmation from clients regarding the monthly promotional results, Youjia Insurance sends service invoices to clients in the second half of each month, with payment typically made at the end of each month. If delayed due to client-audited reports, payment will be extended to the beginning of the following month. In addition to digital marketing services, Youjia Insurance also provides risk assessment services. The company has developed an algorithm called "Magic Mirror," which calculates the risk of auto insurance claims for insurance companies, generating personalized risk reports based on factors such as vehicle brand, model, travel area, and age. Currently, Magic Mirror has 50 users. Furthermore, Youjia Insurance sells value-added bundled benefits to insurance companies, providing a range of vehicle maintenance services, such as car washing, automotive maintenance, driver services, and vehicle movement notification services, as part of its customer service package. Customers can use these services by presenting the provided service codes. To date, the company has approximately 300+ municipal property and auto insurance operators nationwide using its products and services for daily business operations. It also serves around 200,000 insurance brokers. In the past fiscal years of 2021, 2022 (fiscal year ending on June 30 each year), and the first six months of 2023 (ending on December 31, 2022), Youjia Insurance reported revenues of $72.3641 million, $86.6769 million, and $56.4751 million, respectively. The corresponding net profits were -$0.0096 million, -$0.049 million, and $0.1797 million. The company is projected to achieve profitability in the first half of 2023. Despite the preliminary turnaround in the first half of the 2023 fiscal year, it is worth noting that Youjia Insurance has consistently incurred net losses and negative cash flows from operating activities since its establishment. Even during the profitable first half of the fiscal year, the company's operating cash flow remained negative. As of December 31, 2022, the net cash used in operating activities over the past six months was $0.1119 million, compared to $0.8676 million for the same period in 2021. Youjia Insurance anticipates that in the foreseeable future, as the business continues to grow and attract new users, it will require investments in innovative technology infrastructure, further development of its brand and services, and increased brand awareness. Consequently, the company may experience significant capital investments and ongoing costs, which may prevent it from achieving or maintaining profitability or positive cash flow. In order to enhance its growth and consolidation capabilities, the company will continue to focus on its digital marketing services. Youjia Insurance believes that its current digital marketing services are still in the early stages, and it plans to strengthen its marketing team and expand its promotional channels from online to offline. This expansion aims to attract more potential institutional clients who will utilize its marketing services. Simultaneously, Youjia Insurance plans to further expand its business scope to include the life insurance and health insurance sectors. The company plans to establish a dedicated department focused on health insurance clients. In the short term, Youjia Insurance believes that the health insurance sector is on par with property insurance in terms of insurance sales strategies, marketing efforts and stages of development, as well as the purchasing habits of insurance buyers. Additionally, on a market level, the company plans to expand its operations in Southeast Asia and other international markets, providing online growth strategies to overseas clients. Currently, Youjia Insurance is recruiting recent graduates familiar with Southeast Asian languages and business culture to build an international business development team. The company plans to start operations in Vietnam and Indonesia next year and expects to achieve profitability in these regions in two years. From an industry perspective, the domestic insurance market in China grew from 2.4 trillion RMB in 2015 to 4.3 trillion RMB in 2019, with a compound annual growth rate of 15%.1%. It is expected that from 2019 to 2024, it will increase to 7.8 trillion yuan, with a compound annual growth rate of 12.9%, but the growth rate will slow down. According to a report by iResearch Consulting, in 2019, the total investment of participants in the Chinese insurance industry in technology reached 32 billion yuan, and it is expected to reach 56 billion yuan by 2023, with a not optimistic growth rate.Facing the current situation, Yoji Insurance has not yet achieved stable profitability in the property insurance track it belongs to, and the expected overall market space is difficult to provide sufficient momentum for the company. In the face of competition from leading companies that have already gained significant traffic advantages in life insurance, health insurance, and other insurance tracks, it is uncertain whether Yoji Insurance can emerge as the winner.