Good News on Listing | Frost & Sullivan Assists Baimang Co., Ltd. to Successfully List on the Hong Kong Stock Exchange (6657.HK)

Baiwang Co., Ltd. (hereinafter referred to as 'Baiwang Shares') successfully listed on July 9, 2024. The company plans to issue 9.26 million H shares, of which 90% will be international offerings and 10% will be Hong Kong public offerings, with an additional 15% being underwriters' rights. The issue price per share is set at HK$36.00, raising approximately HK$229 million in net proceeds.

During the process of listing in Hong Kong this time, Frost & Sullivan mainly undertook the following tasks: helping the issuer accurately and objectively understand its positioning in the target market, using objective market data to discover, support, and highlight the issuer's competitive advantages, assisting the issuer, investment banks, and other intermediaries in completing the relevant parts of the prospectus (such as the overview, competitive advantages and strategy, industry overview, business, and other important chapters), helping the issuer complete communication with the Hong Kong Stock Exchange and investors, assisting investors in quickly understanding the market ecosystem and competitive landscape, and assisting the issuer in completing feedback on various industry-related issues from the Hong Kong Stock Exchange, etc.

The company's independently developed BAWANG Cloud platform has become a leading provider of enterprise digital solutions in the industry;

The company's comprehensive solutions empower enterprise transactions, compliance management, and business decision-making;

The company has a diversified customer base;

The company has strong R&D and technological innovation capabilities;

The company has an experienced and visionary management team.

According to a report by Frost & Sullivan:

Based on 2023 revenue, the company ranks first in the digital market for cloud-based fiscal and tax-related transactions in China;

Based on the number of invoice processing requests processed through cloud solutions in 2023, the company ranks first among digital solutions providers for fiscal and tax-related transactions in China;

Based on the volume of VAT invoices issued through cloud solutions in 2023, the company ranks second among digital solution providers for fiscal and tax-related transactions in China;

Based on 2023 revenue, the company ranks second in the big data analysis market related to financing for small and micro enterprises in China.

Enterprise digital solutions are digital solutions that improve the level of business decision-making, digitization, and automation of business processes. Enterprise digital solutions can be categorized by business functions into: (1) Transaction digitization, (2) Commerce and marketing digitization, and (3) Internal operations digitization. Transaction digitization solutions enable full-cycle management of transactions between enterprises and their customers and suppliers, covering supplier management, product and service procurement to order management, invoicing, and transaction compliance management. Commerce and marketing digitization solutions enable enterprises to manage marketing activities, identify sales opportunities, and manage customer relationships, thereby achieving customer and sales growth. Internal operations digitization solutions enable enterprises to digitize their internal daily operational activities (such as resource planning and management, as well as human capital management). The following diagram illustrates the business functions of various enterprise digital solutions.

Enterprises are increasingly recognizing the benefits brought by digital solutions, including increased efficiency, cost savings, and improved compliance. This has driven the continuous growth of the digital market in Chinese enterprises. In terms of revenue, the digital market in Chinese enterprises has increased from RMB 482.4 billion in 2019 to RMB 775.1 billion in 2023, with a compound annual growth rate of 12.6%. It is expected that it will further reach RMB 1.3 trillion in 2028, with a compound annual growth rate of 10.9% from 2023 to 2028.

The large number of enterprises in China, the volume of enterprise transactions, and the demand for digitalization have driven the growth momentum of China's transaction digitization market. In terms of revenue, the market size increased from RMB 128.3 billion in 2019 to RMB 214.4 billion in 2023, with a compound annual growth rate of 13.7%. It is expected that by 2028, it will further increase to RMB 392.6 billion, with a compound annual growth rate of 12.9% from 2023 to 2028. Transaction digitization solutions consist of digital payment solutions, tax and finance-related transaction digitization solutions, and various other types of solutions (such as contract management solutions).

The digital solutions for fiscal and tax-related transactions enable enterprises to manage their finances and taxes based on transaction data (including invoices, documents, and other types of digital vouchers involved in business transactions). The digital solutions for fiscal and tax-related transactions (divided by functionality) mainly include bill compliance management solutions, fiscal and tax management solutions, and supply chain collaboration solutions. The scale of the digital market for fiscal and tax-related transactions in China increased from RMB 5.1 billion in 2019 to RMB 72 billion in 2023, with a compound annual growth rate of 9.2%. It is expected to reach RMB 343 billion by 2028, with a compound annual growth rate of 36.5% from 2023 to 2028.

China's digital solutions for fiscal and tax-related transactions include cloud and local deployment solutions. The scale of China's cloud-based fiscal and tax-related transaction digital market, measured by revenue, increased from RMB 1.4 billion in 2019 to RMB 3.1 billion in 2023, with a compound annual growth rate of 22.1%. It is expected to reach RMB 219 billion by 2028, with a compound annual growth rate of 47.8% from 2023 to 2028. By revenue, the proportion of China's cloud-based fiscal and tax-related transaction digital market in the overall fiscal and tax-related transaction digital market increased from 27.5% in 2019 to 43.0% in 2023, and is expected to reach 64.0% by 2028.

The digital market for fiscal and tax-related transactions in China is relatively fragmented, with the top five market participants accounting for 21.4% of the total market share in 2023 based on revenue. By revenue, Baisigong Co., Ltd. ranked second in the digital market for fiscal and tax-related transactions in China, accounting for 4.9% of the market share in 2023.

Among China's providers of digital solutions for cloud-based fiscal and tax-related transactions, Baiscope Co., Ltd. ranked first by revenue in 2023, with a market share of 7.1%. In addition, in 2023, Baiscope completed approximately 700 million invoice processing requests through cloud-based solutions, and issued approximately 2.6 billion value-added tax invoices, ranking first and second respectively among China's providers of digital solutions for fiscal and tax-related transactions.

Big data analysis solutions provide insights generated from data to identify and associate hidden patterns based on massive amounts of data. In terms of revenue, China's big data analysis market for financing small and micro enterprises increased from RMB 8.8 billion in 2019 to RMB 282 billion in 2023, with a compound annual growth rate of 33.7%. It is expected to reach RMB 789 billion by 2028, with a compound annual growth rate of 22.9% from 2023 to 2028.

The big data analysis market related to financing for small and micro enterprises in China mainly utilizes fiscal and tax-related data generated from enterprise transaction information to optimize the efficiency of financial services provided to Chinese small and medium-sized enterprises. Since transactions directly reflect the operating performance of enterprises, analysis results based on transactions can accurately and timely reflect the business conditions of enterprises and reveal their financial performance.

In terms of revenue, Baimang Co., Ltd. ranked second in the Chinese big data analysis market related to financing transactions for small and micro enterprises in 2023.