Wang Min of Leju Finance
On June 27, according to Hong Kong Stock Exchange documents, Saihui Group Holdings Limited (hereinafter referred to as “Saihui Group”) submitted a listing application to the main board of the Hong Kong Stock Exchange. Agricultural Bank International is the sole sponsor.
According to the prospectus, Saihui Group is committed to providing comprehensive one-stop clothing supply chain management solutions for clothing brands. These solutions cover all stages of the supply chain, including product development, product execution, logistics, and customs clearance after customer orders are confirmed.
According to Euromonitor International, based on revenue generated in 2022, Saihui Group ranked fifth in the Hong Kong apparel supply chain management market, with a market share of 2.5%.
In terms of performance, in fiscal year 2020/21, FY2021/22 and FY2022/23, Saihui Group recorded revenue of HK$1,718 billion, HK$2.180 million and HK$2,067 million respectively, with gross margins of HK$267 million, HK$305 million and HK$326 million respectively. Profits obtained during the year were approximately HK$86.66 million, HK$40263 million and HK$73.347 million.
According to the prospectus, in the 2020/21 fiscal year, 2021/22 fiscal year and 2022/2023 fiscal year, the revenue generated by Saihui Group's clothing supply chain management solutions accounted for 94.2%, 95.6% and 96.8% of total revenue, respectively, while the revenue generated by D2C logistics services accounted for 5.8%, 4.4% and 3.2% of total revenue for the corresponding fiscal year, respectively.
The gross margin of its apparel supply chain management solutions fell from 15.3% in the 2020/21 fiscal year to 13.8% in the 2021/22 fiscal year; the gross margin of D2C logistics services fell from 19.8% in the 2020/21 fiscal year to 17.8% in the 2021/22 fiscal year.
Saihui Group has served more than 25 customers in the past. The main customers include clothing brands that focus on selling outdoor clothing, functional clothing or sportswear and have e-commerce elements. It's worth mentioning that the company's biggest customer, Duluth, is an American loungewear, workwear, and accessories with more than 60 stores and online businesses.
It is worth noting that Saihui Group is highly dependent on partnerships with major customers. In the 2020/21, 2021/22 and 2022/23 fiscal years, the revenue from the company's top five customers was HK$1,569.6 million, HK$1,872.9 million and HK$1,823.1 million, respectively. Together, they accounted for 91.4%, 85.9% and 88.2% of the company's total revenue for the relevant financial year.
In particular, revenue from Duluth (an American casual wear, workwear and accessories company with more than 60 stores and online businesses) was HK$1,094.8 million, HK$1,327.5 million, and HK$1,399.4 million, respectively, accounting for 63.7%, 60.9% and 67.7% of the company's total revenue for the relevant financial year.
In fiscal year 2020/21, fiscal year 2021/22 and fiscal year 2022/23, Saihui Group's five major suppliers accounted for a total of 37.8%, 35.0% and 37.5% of total purchases, respectively, while the largest suppliers accounted for 10.6%, 10.2% and 10.9% of total purchases in the relevant fiscal year, respectively.
Furthermore, during the business record period, almost all of Saihui Group's customer headquarters were located in the US. In fiscal year 2020/21, fiscal year 2021/22 and fiscal year 2022/23, Saihui Group's revenue from US-based customers was HK$1,715.4 million, HK$2,180.4 million and HK$2,067.1 million, respectively, accounting for 99.8%, 100.0% and 100.0% of the company's revenue for the relevant fiscal year.