On February 26, 2024, Flashback Technology Co., Ltd. ShanH Technology Limited (“Flashback Technology”) from Anji County, Huzhou, Zhejiang submitted a prospectus on the Hong Kong Stock Exchange to be listed for an IPO in Hong Kong.

Flashback Technology prospectus link:HKEXNEWS.hk/app...

Main business

As a Chinese company that provides aftermarket trading services for consumer electronics products, Flashback Technology is in a leading position in the Chinese mobile phone recycling service market. The company has strategic cooperation with mainstream consumer electronics brands and their designated distributors, large Chinese consumer electronics product merchants, large mobile network operators, etc., and is committed to providing integrated comprehensive solutions, mainly starting recycling and promoting sales of new devices through trade-in methods, and standardized resale of purchased used mobile phones.

According to Frost & Sullivan, based on total recycling transactions from the consumer side in 2022, Flashback Technology is China's largest mobile phone recycling service provider focusing on offline trade-in. It is also the third largest mobile phone recycling service provider in China, with market shares of about 8.4% and 1.5%, respectively.

Flashback Technology mainly obtains the supply of used consumer electronics products through trade-in transactions at offline and/or online stores of upstream resource partners of its own recycling system “Flash Recycling”, and to a lesser extent through idle recycling. Individual consumers (final suppliers) buy new consumer electronics devices at a discount by trading in their used consumer electronics products as part of payment. Afterwards, Flashback Technology's testing and operation center used proprietary testing, grading and pricing technology to process purchased used consumer electronics products, and mainly sold related electronic products through the company's online platform “Flashback Products” and its own online stores operated on multiple third-party e-commerce platforms. Flashback Technology has also been involved in corporate recycling and corporate sales, processing consumer electronics products in batches, and providing value-added and after-sales services to upstream and downstream value chain participants.

Flashback Technology's revenue mainly comes from selling used consumer electronics products (mostly mobile phones) purchased by the company from various supply channels to second-hand market buyers through the Flashback Products online platform and the company's own online stores operated on third-party e-commerce platforms. The company also sells some purchased consumer electronics products in bulk through offline sales, and also provides them with various value-added and after-sales services.

Shareholder structure

According to the prospectus, in the pre-listing shareholder structure, Flashback Technology

Mr. Liu Jianyi holds 31.71% of BVI's shares through ShanHuiShou;

MGY Wisdom BVI (Mr. Liu indirect 80%, Ms. Yu Hairong indirect 20%), holding 10.72% of the shares;

Mr. Liu holds 40.29% of the above total beneficial interests.

Ms. Yu Hairong holds 2.92% of the shares through MGY Alliance BVI;

Mr. He Xiaomin holds 2.44% of BVI's shares through Flash Recycle;

Mr. Lin Lexin holds 1.79% of BVI's shares through Lightning Recycle;

Mr. Luo Yuanshun holds 0.71% of the shares through Recycle Lifestyle BVI;

Mr. Xie Siyin holds 1.28% of the shares through SHS Blooming BVI;

Mr. Yin Xuejun holds 0.57% of the shares through SHS Flash BVI

Mr. Ge Dong holds 0.38% of BVI shares through SHS Prosperity

Ms. Yuan Shuying's Flexman (HK) holds 3.05% of the shares through Barryspace BVI;

Lei Jun's spouse, owned by Shunwei Technology and Hangzhou Shunying, holds 3.90% of the shares through Shanghai Wenwei;

Xiaomi (01810.HK) holds 6.83% of the shares through Shanghai Jiaozheng;

Tongchuang Weiye (832793.OC) took back 8.50% of the shares through Shanghai Embroidery;

Transforming its Clockwork Times, holding 4.42% of the shares through World Circulation BVI;

Mr. Duan Liping holds 2.93% of the shares through ShanHS Sword BVI;

Shenzhen Smart City Investment (22.85%, GP, under the Shenzhen State-owned Assets Administration Commission) and Huang Junyong (77.15%) hold 1.64% of the shares;

Ms. Zhu Yongmei (partner of Guohao Law Firm), holds 5.12% of shares through Yuntouhang BVI;

Mr. Chen Jiangao holds 1.46% of the shares through SHS Thunder BVI;

Mr. Gao Zibin holds 4.34% of the shares through SHS Glory BVI;

Mr. Wang Shujia holds 1.07% of BVI shares through SHS Lightning;

Mr. Hu Qinghe and Mrs. Peng Xiaomei hold 1.89% of the shares through Long Shining BVI;

Anji Guorong BVI, ultimately controlled by the Anji County Finance Bureau, holds 2.33% of the shares.

Management

The board of directors of Flashback Technology consists of 8 directors, including 4 executive directors (Mr. Liu Jianyi, Ms. Yu Hairong, Mr. He Xiaomin, Mr. Lin Lexin), 1 non-executive director (Mr. Jiang Wen), and 3 independent non-executive directors (Mr. Hou Siming, Ms. Liang Jianchang, and Ms. Wen Zhuyun).

In addition to the executive director, senior executives include the Chief Financial Officer, Ms Pan Jianhong.

Company performance

According to the prospectus, in the past nine months of 2021, 2022, and 2023, Flashback Technology's revenue was 750 million yuan, 919 million yuan, and 836 million yuan respectively, with corresponding net losses of 487.08 million, 99.084 million yuan, and 99.114 million yuan respectively. The corresponding adjusted net profit was 7.7 million yuan, -2 million yuan, and -1.9 million yuan, respectively.

Intermediary team

Flashback Technology's intermediary team for this IPO mainly includes: Zinko Capital as its sole sponsor; KPMG as its auditor; Han Kun and Fangda are the company's Chinese lawyers and the company's Hong Kong lawyers respectively; Deheng and Detong are its Chinese lawyers and Hong Kong lawyers respectively; and Frost Sullivan is its industry advisor.