Consumer Discretionary Author: Yijuan Li May 20, 2022 02:24 PM (GMT+8)

As competition in selling learning products grew fiercer, the brand tried to be listed for the third time


Readboy (Chinese: 读书郎), one of the largest manufacturers specializing in electronic learning products in China, submitted an application for a listing on the Hong Kong Stock Exchange on May 18. The company didn't disclose the amount it plans to raise.

According to Readboy, the proceeds from its future IPO will be used mainly to reform the distribution network, strengthen its geographical expansion, develop information technology and infrastructure, improve teaching materials, and further diversify digital teaching resources.

Established in 1999, Readboy aims to develop and manufacture smart learning devices, including digital teaching and learning resources, for primary and secondary school students, parents, and teachers.

But Readboy's road to a public offering was bumpy, and this is the third time for the company to file for IPO. Last year, the electronic device producer sought to be listed in Hong Kong in April and November of 2021, but neither made progress.

According to its new prospectus, Readboy posted a revenue of CNY 669 million (USD 9.955 million), CNY 734 million, CNY 813 million, and a profit of CNY 69.435 million, CNY 92.013 million, and CNY 821.46 million in 2019, 2020, and 2021, respectively. 

Specifically, the company's revenue came mainly from student tablets, including device sales, digital teaching materials and services. Tablet-related income accounted for 80.8%, 90.6%, and 86.7% of Readboy’s total revenue from 2019 to 2021, respectively.

Meanwhile, the student tablet sector faces fierce competition. Both traditional players, such as Bubugao (002251) (Chinese: 步步高) and YouXuePai (Chinese: 优学派), and education technology companies such as Yuanfudao (Chinese: 猿辅导), Zhangmen Education (ZME: NYSE) and New Oriental (EDU: NYSE) have targeted this field.

In April 2020, Huawei also released a Huawei MatePad, aiming for the learning and education market.

To differentiate its products, Readboy targeted the lower-tier market. It has a total of 4,523 sales outlets in 344 cities nationwide. Outlets located in third-tier and lower-tier cities and towns accounted for approximately 68.6%, 69.7% 70.9%, respectively, from 2019 to 2021. However, its distribution system is deeply dependent on third-party distributors, posing a significant risk to its sales.