July 31, 2023, from Dongguan, GuangdongGuangdong Express E-commerce Co., Ltd.Substantial holding companyKK Group Company Holdings Limited(Hereafter referred to as “KK Group”) Submitted a prospectus on the Hong Kong Stock Exchange and proposed IPO listing on the Hong Kong Main Board. This is another form submission after it failed two times on November 4, 2021 and January 20, 2023.

Link to KK Group's prospectus:

https://www1.hkexnews.hk/app/sehk/2023/105583/documents/sehk23073101316_c.pdf

Main business

KK GroupIt focuses on the operation of trendy retail stores and directly provides end customers with a variety of unique products. According to the Frost & Sullivan report, in terms of GMV for 2022,KK GroupIt is one of the top three lifestyle consumer trend retailers in China, and is also the fastest growing trend retailer among the top ten market participants. The GMV compound growth rate from 2019 to 2022 was 88.6%.

Brands and stores

As of July 24, 2023,KK GroupIt has 4 self-incubating retail brands, namely:KKV,THE COLORIST,X11,KK HallIt has 696 stores, covering more than 190 cities in 31 provinces in China and 22 cities in Indonesia. The company's retail brand provides consumers with more than 20,000 SKUs of consumer goods across 11 major categories, coveringMakeup,Trendy fun,Food and drink,Household goods,stationeryand many other categories.

According to the Frost & Sullivan report, according to the GMV of 2022, the company's brands KKV and KK Pavilion ranked second in the boutique collection of Chinese lifestyle fashion retailers, with a market share of about 2.9%. THE COLORIST ranked third among fashion cosmetics and lifestyle retailers in China, with a market share of about 1.3%, and X11 ranked fourth among trendy toy retailers in China, with a market share of about 1.0%.

Revenue model

KK GroupRevenue is mainly obtained through the following channels:Sale of goods(mainly includes retail sales at own stores and sales to franchise stores),Revenue from sale-based management and consulting services.

Shareholder structure

According to the prospectus disclosure,KK GroupIn the equity structure before listing,

Mr. Wu Yuening, through MOGR, holds 24.0023% of the shares;

Mr. Guo Huibo holds 4.3842% of the shares through Starlight;

The shareholders mentioned above are co-actors and hold a total of 28.3865% of the shares, making them the single largest shareholder group.

Mr. Liang Jie, through KK Brother, holds 20.9956% of the shares;

Mr. Yu Yongfu's Redefine Capital holds 9.8786% of the shares through eWTP;

Jingwei Venture Capital Matrix, through Shanghai Weite, holds 7.5178% of the shares;

Mr. Li Ruigang's CMC Capital holds 6.2957% and 0.5163% of the shares respectively through CMC Krypton and CMC II, for a total of 6.8120% of the shares;

Shengxitai's Shenzhen Hongtai holds 4.0794% of the shares through Shanghai Chongyi;

Shen Yanjie's Hongtai International holds 0.1033% of the shares through STARWIN FUND SPC-SUNRISE FUND SP;

Five Mountains holds 3.3195% of the shares through Oriental Grow;

A representative of a restricted stock unit, holding 7.6325% of the shares;

Brilliant Tibet (55% Lin Haixu, 49% Huang Fei) holds a total of 1.0740% of shares through Bright Galaxy II Limited (0.7388%) and Bright Galaxy (0.3352%), respectively;

Bright Desun II Limited, holding 0.2103% of shares;

Millennium Investment Global Limited, holding 0.8414% of shares;

Yiwei Jiang holds 0.3586% of the shares through N5 Capital;

Yan Xubin holds 0.2404% of the shares through X Adventure;

Leo Sense Trust, the trust of Mr. Zheng Yule, holds 0.1145% of the shares through Lighthousecap, 0.0916% of the shares by Lighthouse Capital, and 0.0229% of the shares by the Lighthouse Fellows;

Shenzhen Venture Capital holds 1.1531% of the shares through Red Earth;

JP Gan holds 1.4889% of shares through INCE Capital;

Mana Ventures holds 0.3442% of shares through Kamet Thrive 3 Limited;

Harvest Fund holds 0.3442% of the shares through Harvest International;

Ge Zhihui, through ZUIKAKU CO., LIMITED, holds 0.1721% of the shares;

League of Nations Securities (01456.HK) holds 0.3442% of the shares through Guolian Securities;

Shanghai Yu Kuang, holding 1.7209% of the shares;

JD Group (09618.HK) holds 1.3767% of the shares through JD Angara;

Minsheng Bank (01988.HK) holds 0.1721% of the shares through Minsheng Commercial Bank International Holdings;

CITIC Securities (06030.HK) holds 0.5163% of shares through Pluto Connection Limited;

Hebert Kee Chan Pang holds 0.6884% of the shares through Redview Capital.

Directors and Executives

KK GroupThe board of directors consists of 9 directors, including 5 executive directors, 1 non-executive director, and 3 independent non-executive directors.

directorates(9 people)

executives(7 people)

Executives include Mr. Wu Yuening, Chairman of the Board, Executive Director and CEO Mr. Guo Huibo, Executive Director and Co-CEO, Ms. Shu Yanfang, Executive Director and Vice President, Ms. Peng Yao, Executive Director and Vice President, Mr. Chen Shixin, Executive Director and Business Systems Expert, Mr. Liu Peng, Supply Chain Director, and Mr. Zhang Liwei, Chief Financial Officer.

Company performance

According to the prospectus, in the past three months of 2020, 2021, 2022, and 2023,KK GroupOperating income was RMB 1,646 million, $3,524 million, $3,551 million and $1,446 million respectively; the corresponding net profit was RMB 2,017 billion, $5.681 billion, 62 million and $078 million respectively; the corresponding adjusted net profit was RMB -171 million, -304 million, -412 million and RMB 86 million, respectively.

Intermediary team

KK GroupThe main intermediary team for this IPO includes: Morgan Stanley and Credit Suisse as their co-sponsors; KPMG as its auditors; Haiwen and Jingtian Gongcheng as their company's Chinese lawyers; Pu Heng as their company's Hong Kong and US lawyers; Han Kun and Gao Weishen as their brokerage firm's Chinese lawyers and brokerage firm Hong Kong and US lawyers respectively; and Frost & Sullivan as their industry advisors.