Good News on Listing | Frost & Sullivan Assists MFS Management Co., Ltd. in Successfully Going Public in Hong Kong (2556.HK)

Mifos Management Co., Ltd. (hereinafter referred to as 'Mifos') was successfully listed on May 16, 2024, with a global issuance of 5,949,700 shares at a price of HK$43.60 per share, raising a total amount of HK$259 million.

During the Hong Kong listing process, 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 relevant parts of the prospectus (such as the overview, competitive advantages and strategy, industry overview, business, and other important sections), helping the issuer communicate with the Hong Kong Stock Exchange and investors, assisting investors in quickly understanding the market ecosystem and competitive landscape, and providing feedback on various industry-related issues from the Hong Kong Stock Exchange for the issuer.

The company is a leading SaaS provider for marketing and sales in China, with strong growth momentum;

The SaaS products provided by the company's powerful Marketingforce platform can meet various needs in different usage scenarios;

The company possesses strong R&D capabilities and leading proprietary technologies;

The company has a broad and diverse customer base, with tremendous growth potential;

The company has a customer-centric sales network and a comprehensive customer success system;

The company has a visionary and highly capable management team.

According to a report by Frost & Sullivan,

Based on its 2022 revenue, the company is the largest marketing and sales SaaS solution provider in China;

Compared with other companies' marketing and sales SaaS solutions, our company can commercially provide a SaaS solution covering the widest range of features across both marketing and sales stages on a large scale.

After decades of rapid economic development, China is becoming a high-quality economy and pays increasing attention to the development of the digital economy. Driven by the increased demand for remote work during the COVID-19 pandemic and favorable government policies promoting enterprise digital transformation, Chinese companies are considering digitization as one of their most important long-term strategic goals. As a result, many companies are adopting emerging technologies such as cloud computing. Software as a Service (SaaS), Platform as a Service (PaaS), and Infrastructure as a Service (IaaS) collectively constitute the public cloud market under cloud computing. Compared to locally deployed software, SaaS is an advantageous one-stop solution with flexible purchasing methods, lower startup costs, shorter time to go live, and convenient maintenance and upgrade options. In 2022, the SaaS market in China, measured by revenue, increased from 164 billion yuan in 2018 to 443 billion yuan, with a compound annual growth rate of 28.2% from 2018 to 2022. Driven by growing demand, increasingly improved product functionality, and favorable government policies in the digital economy, the market forecast for SaaS in China is expected to reach 1556 billion yuan by 2027, with a compound annual growth rate of 28.6% from 2022 to 2027.

Marketing and sales SaaS solutions refer to a cloud-based software product portfolio, where more powerful intelligent solutions are empowered by cloud computing, big data, artificial intelligence technology, and value-added services, aiming to help enterprises promote sales growth during the marketing and sales stages. Specifically, the marketing stage refers to business activities aimed at discovering new sales opportunities. The sales stage focuses on achieving sales growth, establishing sustainable relationships with customers, and expanding the customer base. Modern marketing and sales processes generally include six key areas: content and experience, advertising and promotion, social and relationship management, sales and delight, data and analytics, and strategy and management. Marketing and sales SaaS solutions are increasingly adopted by Chinese enterprises because they can solve pain points and bring value to marketing and sales activities:

• Content and Experience

Content and experience are the foundation of marketing and sales activities. Enterprises rely on various content forms to convey information through marketing and sales activities and provide a good experience for their audience. Nowadays, the audience is surrounded by a plethora of content platforms, websites, official accounts, and video accounts that provide rich information in text, images, and videos. Moreover, audiences often have high expectations for user experience when browsing information. Therefore, enterprises face the challenge of delivering higher-quality content more frequently. Marketing and sales SaaS solutions help to produce content intelligently and efficiently and enhance the customer experience.

• Advertising and Promotion

Enterprises purchase advertising space and traffic on various media platforms to display and distribute digital marketing content to their target audience. Advertising and promotion have become the most direct and established forms of marketing and sales activities. However, with the slowdown in overall traffic growth, the concentration of high-quality traffic on media platforms, and a significant increase in the price of acquiring traffic, the return on investment in marketing and sales has declined. Marketing and sales SaaS solutions can help companies manage advertising channels, monitor marketing performance, and optimize promotion strategies to improve return on investment.

• Socializing and Relationships

In addition to traditional media platforms, more and more enterprises choose social media platforms to disseminate content in order to reach their audience, establish relationships with customers, and generate private domain traffic. The rapid growth of social networks and their relationship with media have become areas that enterprises need to pay special attention to. However, with the rapid development and increase of social media platforms, customer relationship management and private domain traffic operation scenarios have become diversified, making the formulation and implementation of customer management strategies more complex. Marketing and sales SaaS solutions are crucial for enterprises to overcome these related difficulties, integrating a series of features that help enterprises apply specific strategies in an intelligent and efficient manner.

• Sales and Happiness

Enterprises achieve sustainable revenue growth through continuous customer conversion, repeat purchases, and referrals. Sales and delight are the ultimate goals and outcomes of marketing and sales activities. Since customers have a variety of products and services to choose from, leading to strong personalized preferences, sales conversion has become challenging today. Marketing and sales SaaS solutions provide enterprises with digital tools to manage their sales teams, select and execute sales strategies, and delight their customers.

• Data and Analysis

By accurately, comprehensively, and timely obtaining and applying data generated in the above four areas, enterprises can better analyze and optimize overall marketing and sales efficiency. Data and analytics provide enterprises with in-depth insights and scientific evaluations of marketing and sales activities. Developing and applying advanced data and analytics technologies is costly and fraught with difficulties, whereas marketing and sales SaaS solutions offer easy-to-use data-related features at low cost to enterprises.

• Strategy and Management

Enterprises need to select appropriate marketing strategies based on their industry characteristics, business models, and development stages, in order to manage marketing and sales personnel and execute marketing and sales activities more effectively in the above five areas. It is often difficult for enterprises to accurately assess and identify their own characteristics and needs and choose effective methods. In addition, the internal management of marketing and sales teams and budgets is crucial for the success of marketing and sales activities. Therefore, strategic and management functions are closely related to marketing and sales SaaS solutions. Marketing and sales SaaS solutions provide enterprises with a series of strategic and internal management functions, enabling enterprises of different industries, business models, and scales to select and implement appropriate marketing and sales strategies as well as internal management functions with advanced marketing concepts and practices.

The marketing and sales SaaS solution market grew from RMB 7.3 billion in 2018 to RMB 20.6 billion in 2022, with a compound annual growth rate of 29.7% from 2018 to 2022. The market scale of marketing and sales SaaS solutions is expected to reach RMB 745 billion by 2027, with a compound annual growth rate of 29.3% from 2022 to 2027. The marketing and sales SaaS solution market demonstrated strong resilience during the COVID-19 pandemic, and its growth rate from 2021 to 2022 was faster than the growth rate of the entire SaaS market during the same period.

The potential market size of marketing and sales SaaS solutions is expected to grow from RMB 1,546.6 billion in 2022 and a penetration rate of 1.3% to RMB 4,254.5 billion in 2027 and a penetration rate of 1.8%. Although the current market size of marketing and sales SaaS solutions is relatively small, there is a trend among Chinese enterprises to subscribe to SaaS solutions. Looking ahead, as marketing and sales SaaS solutions offer flexible subscription plans, high scalability, ease of implementation, and minimal maintenance needs, more and more Chinese enterprises are expected to adopt such solutions.

Based on its revenue for 2022, Maimai is China's largest marketing and sales SaaS solution provider, with SaaS business revenue amounting to RMB 5.299 billion, accounting for 2.6% of the market share.

At the same time, compared to peers, one of the important competitive advantages of MFS is its ability to commercially scale and provide SaaS solutions that cover the widest range of features across both marketing and sales stages.

Precise marketing can be defined as an online advertising technology used to send relevant advertisements to targeted audiences in order to acquire and retain potential and existing customers. Precise marketing aims to maximize marketing results and returns through effectiveness and display. There are various types of participants entering the precise marketing market, including advertisers, advertising service providers, media platforms, audiences, and third-party technology providers. Advertising service providers (such as our company) occupy a major position in the industry chain. They can act as principals, planning online advertising campaigns for advertisers and placing ads on different media platforms, or as agents, providing intermediary services by selling advertising inventory purchased from online media platforms to distributors without having to plan or execute advertising campaigns or be responsible for the results.

The precision marketing market increased from RMB 517.2 billion in 2018 to RMB 1,028.7 billion in 2022, with a compound annual growth rate of 18.8% from 2018 to 2022. Looking ahead, driven by the importance of online marketing, rising costs of online traffic, and the long-term popularity of more advanced precision marketing solutions, the precision marketing market is expected to reach RMB 1.7285 trillion in 2027, with a compound annual growth rate of 10.9% from 2022 to 2027.