In the exploration of a new era of recycling, the popularity of the secondhand economy continues to rise.
On February 26, 2024, Shanhs Technology Co., Ltd. officially submitted its prospectus to the Hong Kong Stock Exchange, intending to list on the main board, with China Renaissance acting as the exclusive sponsor.
Established in 2016, Shanhs Technology is an industrial internet company that provides comprehensive reuse solutions for a wide range of smart devices. The company reshapes the value chain for manufacturers, mobile operators, retail channels, and end-users, boasting proprietary testing, grading, and pricing technologies, as well as strategic partnerships with upstream resource partners. It focuses on the consumer scenario of trading in old devices for new ones, providing a complete solution from sales, recycling, to resale.
Currently, Shanhs Technology operates two core enterprise brands, "Shanhs Recycling" and "Shanhs Quality Products." The former conducts offline recycling operations and is the primary brand for the company's upstream resource partners to recover second-hand consumer electronic products from individual consumers. The latter is the main brand through which Shanhs Technology sells purchased second-hand consumer electronic products on its own online platform and/or on third-party e-commerce platforms to customers.
Presently, Shanhs Technology has over 42,000 offline stores covering 31 provinces in China. In 2021, 2022, and the first three quarters of 2023, the supply of second-hand consumer electronic products provided to Shanhs Technology by its upstream resource partners exceeded 1 million units in each period. According to data from Frost & Sullivan, the total shipment volume of mobile phones from six mainstream consumer electronic brands that Shanhs Technology collaborated with in 2022 accounted for approximately 59.8% of China's total mobile phone shipments.
According to financial data released by Shanhs Technology, its revenue in 2021 and 2022 was CNY 750 million and CNY 919 million, with a year-on-year growth rate of approximately 22.6%. In the first three quarters of 2023, Shanhs Technology's revenue increased by approximately.
Shanhs, has consistently managed to sell approximately 85% of traded-in consumer electronic products within three days of delivery to its operational and testing centers in 2021, 2022, and the first three quarters of 2023. During the same periods, the total quantity of second-hand consumer electronic products sold through Shanhs’ online platform “Shanhs Quality Products” and its self-operated stores on multiple third-party e-commerce platforms were approximately 1,247,000 units, 1,254,000 units, and 1,085,000 units, respectively. The average return rate of second-hand consumer electronic products transacted on Shanhs’ online platform and its self-operated stores on third-party e-commerce platforms was approximately 3.3%, while the average return rate for the Chinese mobile phone recycling service industry was within 5% of sales.
According to Frost & Sullivan’s data, calculated from the total transaction volume of consumer-end recycling in 2022, Shanhs emerged as China’s largest offline trade-in mobile phone recycling service provider, and the third-largest mobile phone recycling service provider in China, with market shares of approximately 8.4% and 1.5%, respectively.
By the end of 2023, Shanhs will extend its cooperative and recycling transaction services to Hong Kong. In October 2023, Shanhs obtained a wireless e-commerce license in Hong Kong. Additionally, in September and December 2023, under the brand “Shanhs Youpin”, Shanhs opened its first and second offline retail stores in Shenzhen, offering second-hand consumer electronic product recycling and sales services.
Since its establishment, Shanhs has secured investments from institutions such as Xiaomi, Shunwei Capital, Cowin Capital, Shenzhen Smart City, and Zhuanzhuan, and has obtained comprehensive official cooperation qualifications from mainstream smartphone manufacturers such as Xiaomi, Samsung, Honor, Vivo, and Apple. It has also established deep partnerships with China Mobile, China Unicom, and China Telecom, the three major telecommunications operators in China.
In its IPO prospectus, Shanhs Technology stated that the net proceeds from the IPO fundraising will primarily be used to further strengthen strategic cooperation with upstream resource partners to continuously expand the scope of transaction services and national coverage, as well as consolidate its current market position in China’s offline trade-in mobile phone recycling service. Furthermore, it aims to enhance its technological research and development capabilities, increase marketing efforts, and explore new sales channels to stabilize sales volume and profit margins. Additionally, it plans to engage in strategic investments and/or potential acquisitions of businesses that complement its current offerings and align with its growth strategy, as well as for general corporate purposes and operational capital.