On January 31, 2024, KK Group Company Holdings Limited (hereinafter referred to as “KK Group”), the actual holding company of Guangdong Express E-Commerce Co., Ltd. from Dongguan, Guangdong, submitted a prospectus on the Hong Kong Stock Exchange to be listed on the Hong Kong Main Board. This is another submission after three consecutive filing invalidations on November 4, 2021, January 20, 2023, and July 31, 2023.
Link to KK Group's prospectus:
Main business
KK Group, focusing on the operation of trendy retail stores, directly provides unique products to end customers. According to the Frost & Sullivan report, according to the 2022 GMV, KK Group is one of the top three lifestyle consumer trend retailers in China, with an offline-driven non-grocery retail market share of 1.6% in China.
Brands and stores
As of January 23, 2014, KK Group has 4 self-incubated retail brands, namely KKV, THE COLORIST, X11, and KK Hall. It has 800 stores, including 680 own stores and 120 franchised stores, covering more than 200 cities in 31 provinces of China and 34 cities in Indonesia. As of October 31, 2013, the company's retail brands provided consumers with consumer goods spanning more than 20,000 SKUs in 11 major categories, covering various categories such as beauty, fashion, food and drink, household goods, and stationery.
According to the Frost & Sullivan report, the company's brands KKV and KK Hall ranked second in China's offline-driven non-grocery retail market in 2022, with a market share of about 2.5%, THE COLORIST ranking third, with a market share of about 1.1%. X11 ranked fifth among trendy Chinese toy retailers, with a market share of about 0.7%.
Revenue model
KK Group mainly earns revenue through the following channels: product sales (mainly including retail sales at its own stores and sales to franchisees), and revenue from sales-based management and consulting services.
Shareholder structure
According to the prospectus, in the pre-listing shareholding structure of KK Group,
Mr. Wu Yuening, through MOGR, holds 24.0023% of the shares;
Mr. Guo Huibo, through Starlight, holds 4.3842% of the shares;
The shareholders mentioned above are concerted 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, through eWTP, holds 9.8786% of the shares;
Jingwei Venture Capital Matrix, through Shanghai Weili, holds 7.5178% of the shares;
Mr. Li Ruigang's CMC Capital holds 6.2957% and 0.5163% of the shares through CMC Krypton and CMC II, respectively, for a total of 6.8120%;
Shengxitai's Shenzhen Hongtai holds 4.0794% of the shares through Shanghai Chongyi;
Shen Yanjie's Hongtai International holds 0.1033% of shares through STARWIN FUND SPC-SUNRISE FUND SP;
Wuyue World, through Oriental Grow, holds 3.3195% of the shares;
The nominee of the restricted share unit, holding 7.6325% of the shares;
Tibet Brilliant (55% Lin Haixu, 49% Huang Fei) held 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 the shares;
Millennium Investment Global Limited holds 0.8414% of the shares;
Yiwei Jiang holds 0.3586% of shares through N5 Capital;
Yan Xubin holds 0.2404% of shares through X Adventure;
Mr. Zheng Xuanle's trust Leo Sense Trust holds 0.1145% of the shares through Lighthousecap, 0.0916% of Lighthouse Capital's shares, and 0.0229% of Lighthouse Fellow's shares;
Shenzhen Venture Capital holds 1.1531% of shares through Red Clay;
JP Gan holds 1.4889% of shares through INCE Capital;
Mana Ventures holds 0.3442% of its shares through Kamet Thrive 3 Limited;
Harvest Fund holds 0.3442% of shares through Harvest International;
Ge Zhihui holds 0.1721% of the shares through ZUIKAKU CO., LIMITED;
League of Nations Securities (01456.HK), holding 0.3442% of shares through Guolian Securities;
Shanghai Yu Kuang holds 1.7209% of the shares;
JD Group (09618.HK) holds 1.3767% of shares through JD Angara;
Minsheng Bank (01988.HK) holds 0.1721% of 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
The board of directors of KK Group consists of 9 directors, including 5 executive directors (Mr. Wu Yuening, Mr. Guo Huibo, Ms. Shu Yanfang, Ms. Peng Yao, Mr. Chen Shixin), 1 non-executive director (Mr. Liang Jie), and 3 independent non-executive directors (Mr. Yu Jianfeng, Ms. Shi Meng, and Mr. Ying Kejing).
In addition to the executive directors, executives include Mr. Liu Peng, Director of Supply Chain; Mr. Zhang Liwei, Chief Financial Officer; Mr. Zhao Yanchao, Director of Human Resources; and Mr. Huang Zhaohui, Director of Information Technology.
Company performance
According to the prospectus, in the past ten months of 2020, 2021, 2022 and the first ten months of 2023, KK Group's operating income was RMB 1,646 billion, $3,524 million, $3,551 billion and RMB 4.769 billion respectively; the corresponding net profit was RMB -2.017 billion, -5.681 billion, 0.62 million and 209 million yuan respectively; the corresponding adjusted net profit was RMB -171 million, -304 million, -412 million yuan and 230 million yuan, respectively.
Intermediary team
KK Group's intermediary team for this IPO mainly includes: Morgan Stanley as its sole sponsor; KPMG as its auditor; Haiwen and Jingtian Gongcheng as its Chinese lawyers; Pu Heng as the company's Hong Kong and US lawyers; Han Kun and Gao Weishen as their Chinese lawyers and Hong Kong and US lawyers respectively; and Frost Sullivan as their industry advisors.