On May 26, 2024, Easou Technology Holdings Limited (“Yisou Technology”) from Shenzhen, Guangdong submitted a prospectus to the Hong Kong Stock Exchange to be listed on the Hong Kong Main Board. It was submitted three times: February 27, 2023, September 29, 2023, and April 22, 2024.
On April 22, 2024, Yisou Technology received the Overseas Issuance Listing Filing Notice from the International Cooperation Department of the China Securities Regulatory Commission (2024) No. 847), and plans to issue no more than 120 million shares of overseas listed common shares.
Link to Yisou Technology's prospectus:
Yisou Shenzhen, the domestic agreement controlling entity of Yisou Technology, was listed on the New Third Board on March 9, 2017. The stock code is 870926, and it was delisted from the New Third Board on June 19, 2019. On September 26, 2019, the company submitted a listing application on the Science and Technology Innovation Board of the Shanghai Stock Exchange, but it was voluntarily withdrawn in 2020. As early as 2014, the company planned to go public on the New York Stock Exchange in the US and submit a listing application to the SEC, then withdrew the listing application.
Main business
Yisou Technology, founded in 2005, is committed to applying various “data and human connection” scenarios based on artificial intelligence recommendation technology. The company uses the proprietary intelligent recommendation engine Yisou recommendation engine to collect, analyze, match or predict the needs of user accounting customers, and provide various data such as digital reading, digital marketing, online games, and other digital content.
Yisou Technology operates four business lines, covering digital reading platform services, digital marketing services, online game distribution services, and other digital content services
Digital reading platform service
The company uses the iSearch recommendation engine to analyze user behavior and willingness to pay for digital reading. We recommend suitable online literature content to users through two services: paid reading and advertising reading. Under the paid digital reading service, users who subscribe to the company's premium membership can enjoy ad-free services. In terms of digital reading services that include advertisements, the company mainly uses the proprietary advertising platform Easy Push to provide data support, assist in formulating marketing strategies, and display appropriate advertisements to users using free reading resources to generate revenue for advertisers, and users do not subscribe to the company's premium membership. Easy Push mainly uses traffic from the Yisou series reading app, the Yisou Novel Quick Reading App, and the Yisou H5 page's exclusive platform. According to Yiguan, in the Chinese digital reading market, the company's Yisou Novel App ranked fifth in 2023 in terms of the average number of monthly active users. In terms of average number of monthly active users in 2023, the Yisou Novel App ranked fourth in the Chinese digital reading market in terms of daily usage time per person.
As of December 31, 2023, the total number of registered users of the Yisou series of reading apps was 44.7 million. Over the period of track record, user activity on the company's platform has continued to increase. The average number of monthly active users of the Yisou series of reading apps increased from 21.1 million in 2020 to 23.9 million in 2021, and further increased to 25.6 million in 2023. In 2023, the average monthly revenue per paid user of the Yisou series of reading apps was RMB 42.1.
digital marketing
Collect, analyze, and predict user preferences for ad content, and match advertisers' needs to achieve accurate ad delivery on appropriate third-party advertising channels. The company's proprietary intelligent advertising platform, Easy Push, is the core platform that connects advertisers' needs with suitable advertising slots for partner media. Easy Push consists of an algorithm strategy system, which is based on advertisers' needs and partner media ad slot characteristics, and is based on multiple artificial intelligence recommendation algorithm models.
Companies generally work with advertisers under relevant framework agreements to generate advertising revenue and charge fees based on CPC Benchmarks, CPM Benchmarks, CPA Benchmarks, or other baselines.
Online game distribution
The company cooperates with game content providers to distribute and recommend game content to users based on analysis of user behavior and game categories or content preferences. The company has successfully launched several online games to the market in the past, such as “Emperor Century” launched in 2016, “Love Jiangshan More Beautiful People” launched in 2019, “School Flower Dream Factory”, “My Tank, My Team”, and “Civilization” launched in 2022.
The company usually charges for users to purchase virtual items within the game and then shares part of the revenue with third party game content providers.
Other digital content
Telecom operators' value-added services, including various types of digital content such as music and ringback tones, are recommended to help them reach target users. The Company and cooperating third party value-added content providers will settle the relevant revenue according to the agreed proportion after receiving the user's revenue settlement.
Shareholder structure
According to the prospectus, in the pre-listing shareholder structure of Yisou Technology,
Mr. Wang Xi holds 34.02% of the shares through Growth Value;
Shenzhen Yijiujiu, an employee incentive platform, holds 11.01% of shares through Eason Union;
Mr. Zhao Lei holds 2.63% of the shares through Full Ocean;
Mr. Lu Jin holds 1.31% of the shares through Sunbird International;
Mr. Chen Jun holds 0.66% of the shares through Skymobi;
Suzhou Kunyu holds 7.46% of the shares;
Estate Success, holding 6.66% of the shares;
Shanghai Shanda holds 6.27% of the shares;
SoftBank holds 5.08% of shares and 3.16% of shares through SBCVC Fund III and Bluesky Holding, respectively;
Jinhe Capital holds 4.98% of the shares;
Qianhai Hairun holds 3.58% of the shares;
Houju No. 3 holds 3.36% of the shares;
Houju No.1 holds 0.13% of the shares;
Ventech China II SICAR, holding 3.05%;
Jin Jinchang Co., Ltd., which holds 2.86% of the shares;
Yuanzhi Venture Capital holds 1.07% of the shares;
Shenzhen Lihe partnership, holding 0.96% of the shares;
Lihe Science and Technology Innovation (002243.SZ) held 0.91% of shares through Shenzhen Lihe;
Nanrun Wanxin invests, holding 0.72% of the shares;
Mr. Ding Ding holds 0.14% of the shares.
Directors and Executives
The board of directors of Yisou Technology consists of 9 directors, including:
3 Executive Directors: Mr. Wang Xi (Chairman of the Board and CEO), Mr. Chen Jun (Chief Financial Officer and Joint Company Secretary), and Mr. Zhao Lei (Chief Operating Officer);
3 non-executive directors: Mr. Luan Ling, Mr. Zhuge Qingchen, and Mr. Gan Minggao;
Three independent non-executive directors: Mr. Zhu Jianfeng, Mr. An Yingchuan, and Ms. Meng Xue.
Company performance
According to the prospectus, in the past 2021, 2022 and 2023, Yisou Technology's revenue was RMB 433 million, RMB 456 million and RMB 559 million, respectively, and the corresponding net profit was RMB 50.11 million, 44.448 million and RMB 2.5011 million, respectively.
Intermediary team
Yisou Technology's intermediary team for this IPO mainly includes Bank of China International as its sole sponsor; Ernst & Young as its auditor; Global and Mayer's Hong Kong lawyers respectively; Jingtian Gongcheng and Morgan Lewis are its Chinese lawyers and Hong Kong brokerage lawyers respectively; and Yi Guan is its industry consultant.