Good News on Listing | Frost & Sullivan Assists Lianmeng Technology Group Co., Ltd. to Successfully List on the Hong Kong Stock Exchange (2405.HK)

Liumeng Technology Group Co., Ltd. (hereinafter referred to as 'Liumeng Technology') successfully listed on March 31, 2023. The company plans to issue 200,000,000 shares globally, of which 90% will be international offerings and 10% will be Hong Kong public offerings, with an additional 15% being underwritten options. The issue price per share is HK$0.7, raising a total amount of approximately HK$96.8 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), facilitating communication between the issuer and the Hong Kong Stock Exchange and investors, helping investors quickly understand 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 is a leading cross-border digital marketing service provider in China, with an advantage in serving the cross-border e-commerce industry. It can provide a full-link digital marketing solution based on SaaS;

The company offers diversified solutions oriented towards customer needs, cultivates a complete marketing main network, and promotes business development;

The company's SaaS-based Adorado platform and Powershopy platform can provide customers with a one-stop intelligent cross-border solution, bringing better synergy to the company's business;

The company has a wide and high-quality global media network, as well as favorable cooperation models;

The company has a management team with forward-looking vision and rich industry experience.

According to the Frost & Sullivan report, in terms of total billings for 2021, the company:

Ranked fourth in the cross-border digital marketing service market in China;

Ranked third in the cross-border digital marketing service market for e-commerce in China;

Ranked third in the SaaS-based cross-border digital marketing service market in China.

Cross-border digital marketing refers to the corporate marketing orientation aimed at conducting cross-border marketing activities through digital channels targeting overseas potential users. The core value of cross-border digital marketing is to help marketers reach overseas consumers through internet advertising technology and digital media platforms.

As domestic companies expand into overseas markets, the cross-border digital marketing service industry in China has grown rapidly over the past few years. The cross-border digital marketing service industry increased from $4.8 billion in 2016 to $22.3 billion in 2021, with a compound annual growth rate of 36.0%. It is expected that the cross-border digital marketing service industry in China will grow in line with technological innovation and the growth in demand from Chinese companies. The estimated market size will reach $616 billion by 2026, with a compound annual growth rate of 22.5% from 2021 to 2026.

By media category, Media Publisher A and Google are the two major media publishers for cross-border digital marketing in China. It is industry practice to collaborate with approximately one to two media publishers as cross-border digital marketing service providers. The vast majority of Chinese cross-border marketers prefer top media publishers with large media traffic, such as Media Publisher A and Google. In 2021, Chinese marketers' total billings on Media Publisher A and Google platforms accounted for 46.6% and 33.6% of the total billings in the Chinese cross-border digital marketing service industry, respectively.

As of 2021, the top five media publishers in China's cross-border digital marketing industry by industry ranking are Media Publisher A, Google, Amazon, TikTok, and Snapchat, accounting for a total of 97.7% of the total billings in China's cross-border digital marketing industry. Media Publisher A still holds a dominant position among media publishers, and there have been no other existing or new media publishers challenging its dominance to date.

For the e-commerce and online gaming industries, China's cross-border digital marketing service market is also dominated by Media Publisher A. Media Publisher A is the primary media publisher for e-commerce marketing. The average monthly active users on Media Publisher A's largest media platform increased from 2.5 billion in 2019 to 2.96 billion in 2022, ranking first among all social media platforms during the relevant period. Media Publisher A holds a dominant position as a user traffic provider and social media publisher and is unlikely to be replaced in the near future.

According to Frost & Sullivan's data, as of December 31, 2019, 2020, 2021, and 2022, as well as the latest practicable date, Media Publisher A has a total of 9, 10, 11, 11, and 11 distributors in China. Media Publisher A has numerous distributor and agency levels in the cross-border digital marketing market in China partly because Media Publisher A does not have any business operations in China, while Chinese marketers need to contact intermediaries to implement marketing activities on Media Publisher A's platform.

Cross-border online store SaaS solution providers offer online store creation tools and services for independent online stores engaged in cross-border e-commerce business. These services are integrated online with specific SaaS platforms. E-commerce businesses serve directly on the platform, eliminating the need for local data computation or storage. The cross-border online store SaaS solution enables marketing automation and artificial intelligence on the platform, ultimately allowing data to be stored.

In addition to third-party e-commerce platforms where multiple online suppliers list their products and services, independent online stores are the official online platforms where e-commerce merchants launch and provide their products. Through independent online stores, e-commerce businesses can offer a range of services such as order booking, payment, and delivery to overseas customers. There are limited industry participants who can provide SaaS online store setup tools and services as well as cross-border digital marketing features.

According to a Frost & Sullivan report, as one of the modern tools for establishing independent online stores in cross-border e-commerce businesses, the cross-border online store SaaS solution industry has increased over the past few years with the growth of cross-border e-commerce business. The Chinese cross-border online store SaaS solution industry increased from $100 million in 2016 to $590 million in 2021, with a compound annual growth rate of 42.6%. In 2021, there were approximately 100 cross-border online store SaaS solution providers in China. In 2021, the Chinese cross-border online store SaaS solution market was relatively concentrated, with the top five participants accounting for about 73.4% of the market share. In 2021, the Group's revenue was approximately $30,000, accounting for 0.01% of the market share in 2021.

It is expected that the cross-border online store SaaS solution industry will grow in the future with technological advancements, the prevalence of social media, and government policy support. It is estimated that the Chinese cross-border online store SaaS solution industry will reach $2.41 billion by 2026, with a compound annual growth rate of about 32.5% from 2021 to 2026. At the same time, in 2021, the penetration rate of cross-border independent online stores in China was about 7.5% based on GMV, and it is expected to grow to 9.0% by 2026.

In 2021, there were approximately 1,000 cross-border digital marketing service providers in China. The top five cross-border digital marketing service providers accounted for about 49.8% of the market size. In 2021, the Group's total billings for cross-border digital marketing services amounted to $600 million, ranking fourth and accounting for about 2.7% of the market share in China's cross-border digital marketing service industry.

In 2021, in terms of cross-border digital marketing services for the e-commerce industry in China, the market share of the top five participants accounted for approximately 78.3%. The group's total billings were about $430 million, ranking third and accounting for approximately 6.2% of the cross-border digital marketing service market share in China's e-commerce industry.

• Comprehensive service capabilities

• Brand reputation and awareness

• Talent requirements

Frost & Sullivan has extensive research experience in the communications, media and technology industries. It has assisted well-known enterprises in successfully listing on capital markets. Successful listings include Ohmyhome (NASDAQ:OMH), Kingsoft Cloud (3896.HK), HaoDun Technology (2440.HK), Duoxiangyun (6696.HK), Xuanwu Cloud Technology (2392.HK), Huitongda (9878.HK), Innoventive Intelligence (2121.HK), SenseTime (0020.HK), Qinhuai Data (NASDAQ:CD), Mingyuan Cloud (0909.HK), Century Group (1849.HK), Weimeng Group (2013.HK), WanKaiYilian (1762.HK), AsiaInfo Technology (1675.HK), Hong Kong Asia Holdings (1723.HK), Aurora Mobile (NASDAQ:JG), Kingguan Holdings (8606.HK), Qiyi Technology (1739.HK), Weixin Jinko (2003.HK), Hefu Tianxia (1806.HK), Atlinks (8043.HK), Zioncom (8287.HK), ISP Global (8487.HK), Vobile (3738.HK), iBos Technology (2708.HK), iClick (NASDAQ:ICLK), Shengye Capital (6069.HK), Anling International (8410.HK), Anke Systems (8353.HK), Junmeng International (8062.HK), Feisida (8342.HK), Future Data (8229.HK) and Yasy Backup (8290.HK).