US Stock New IPO Outlook | Under the benefits of the home appliance trade-in policy, Jingrui Wangpu accelerates its IPO in the US

At the beginning of 2025, the National Development and Reform Commission and the Ministry of Finance issued a notice on the implementation of a large-scale equipment renewal and old-for-new policy for consumer goods in 2025, which includes subsidies for mobile phones, tablets, and smart wearable devices, while continuing the old-for-new subsidy activities for home appliances. In addition, this year's Two Sessions announced a special government bond of 300 billion yuan, further enhancing the consumption stimulus policy for new national subsidies, with the category of home appliances expanding to include dishwashers, water purifiers, microwave ovens, and rice cookers in the national subsidy list.

According to relevant statistics, in the categories participating in the subsidy, the retail sales of range hoods, gas stoves, dishwashers, and other products in the online market increased by more than 50% year-on-year in February; in the offline market, the retail sales of air conditioners, range hoods, gas stoves, dishwashers, water purifiers, and embedded microwave ovens all saw year-on-year increases exceeding 100%. With the high enthusiasm in the home appliance industry, the listing enthusiasm of various enterprises in the industrial chain has been reignited.

According to Zhitong Finance APP, recently, Chinese home appliance retailer Jingrui Wangpu (JRWP.US) submitted its initial public offering (IPO) application to the U.S. Securities and Exchange Commission (SEC), planning to issue 1.3 million shares at a price of $4 to $6 per share, raising $6 million (USD). Based on the midpoint of the proposed issuance price range, Jingrui Wangpu's market value will reach $106 million.

What are the highlights of this listing for Jingrui Wangpu? Let's find the answer from its prospectus.

Business Structure Optimization and Steady Revenue and Profit Growth

According to Zhitong Finance APP, Jingrui Wangpu is headquartered in Hangzhou and was established in 2002. It is a wholesaler and retailer of electrical appliances, with products including air conditioners, refrigerators, televisions, washing machines, dryers, dishwashers, range hoods, electric kettles, food processors, and rice cookers. As of now, the company has opened 9 retail stores and developed 20 wholesale distributor clients.

According to the prospectus, for the fiscal years ending March 31, 2023, and 2024 (referred to as the "reporting period"), the company's revenue was 9.4037 million yuan and 10.6521 million yuan, respectively, a year-on-year increase of 13.28%. In the first half of the 2025 fiscal year, the company's revenue further increased to 6.1641 million yuan, a year-on-year increase of 25.4%.

In terms of segmentation, the company's business is mainly divided into appliance sales, electrical-related services, and rental services.

Among them, appliance sales primarily involve selling various electrical products to customers, which is the company's main source of revenue. In the fiscal years 2023, 2024, and the first half of 2025 (referred to as the "reporting period"), the appliance sales business achieved revenues of 8.82 million yuan, 9.47 million yuan, and 5.44 million yuan, respectively. However, while revenue continued to grow, the revenue share of this business declined, accounting for 93.8%, 88.9%, and 88.3% during the reporting period.

Zhitong Finance APP noted that the decline in the revenue share of the appliance business was mainly due to the increase in the revenue share of electrical-related services.

According to the prospectus, electrical-related services include after-sales maintenance and repair services for electrical products as well as consulting services. During the reporting period, revenue from this service was 570,000 yuan, 1.17 million yuan, and 720,000 yuan, with the revenue share increasing from 6.0% in the fiscal year 2023 to 11.0% in the fiscal year 2024, and further increasing to 11.6% in the first half of the fiscal year 2025 While revenue is improving, the company's profitability continues to enhance. During the reporting period, the company's gross profit margins were 22.4%, 26.2%, and 25.5%, respectively; net profits were CNY 995,500, CNY 1,078,600, and CNY 520,100.

According to Zhitong Finance APP, the fluctuation in Jingrui Wangpu's gross profit margin is related to the company's product mix. Among them, the retail gross profit margin of the company's electrical products is higher than the wholesale gross profit margin. The prospectus shows that the retail gross profit margin of the company's electrical products usually remains in the range of 15% to 20%, while the gross profit margin for wholesale sales to distributors is about 10%. In the fiscal year 2024, to improve the company's profitability, Jingrui Wangpu is focusing more on retailing electrical products to customers, which has driven a 12.3% increase in retail revenue while also enhancing the company's profitability.

Intense Competition in the Home Appliance Industry

From an industry perspective, over the past decade, China's home appliance industry has undergone a profound transformation from incremental expansion to stock competition.

Zhitong Finance APP learned that the three years of the pandemic have had a significant impact on China's home appliance market. With the lifting of pandemic restrictions, the trend of recovery in the home appliance market is not significant, mainly due to the high ownership of home appliances, some consumer categories have become optional, low consumption frequency, and non-urgent demand for upgrades. Data shows that in 2023, the scale of China's home appliance market reached CNY 849.8 billion, recovering to 95.4% of the pre-pandemic retail scale, with a year-on-year growth of 3.6 percentage points. It can be seen that under multiple factors, the home appliance industry is showing a slow recovery trend.

In 2024, the introduction of national subsidies has brought significant changes to the cycle and market logic of China's home appliance industry.

According to the "2025 China Home Appliance Retail and Innovation White Paper," data shows that in the first eight months of 2024, the retail sales of the home appliance market (excluding 3C) fell by 3.6% year-on-year, while from September to December, it grew by 23.8% year-on-year. This indicates that the implementation of the old-for-new policy has become a clear watershed for the home appliance market in 2024, bringing structural rebounds to the industry. It is worth noting that

some analyses point out that although the "national subsidy" policy has driven a rise in both volume and price for certain products, increased retail foot traffic, and improved consumer demand, in the medium to long term, the industry still faces major challenges of "difficulty in customer acquisition, conversion, and innovation" due to various factors such as consumption, real estate, and population.

According to Aowei Cloud Network's forecast, considering that part of the home appliance demand for 2025 has been overdrawn in 2024, consumer interest in home appliance national subsidies may gradually decline, and the high base of home appliance retail stimulated by the "national subsidy" policy in the second half of 2024, even though the "national subsidy" policy will continue in 2025, the retail scale of all home appliance categories in 2025 is expected to see only a slight year-on-year increase In addition, from the perspective of market competition, Jingrui Wangpu faces intense market competition, especially in the appliance sales and repair service market. In the Chinese appliance sales market, the company's competitors include wholesalers and retailers of various appliance brands, while the repair service market faces competition from rivals such as 58.com and Woodpecker Repair. Jingrui Wangpu admits that some of its large competitors have a broader range of products or services and more working capital to support sales and marketing expenditures.

It is worth noting that Jingrui Wangpu is also facing price pressure from online retailers.

Driven by the wave of digitalization, online shopping has gradually become an important channel for consumers to purchase goods. According to data from the National Bureau of Statistics, the national online retail sales reached 15.52 trillion yuan in 2024, a year-on-year increase of 7.2%, maintaining its position as the world's largest online retail market for 12 consecutive years. Among them, the online retail sales of physical goods amounted to 13.08 trillion yuan, a year-on-year increase of 6.5%, accounting for 26.8% of the total retail sales of consumer goods, with a growth rate 3 percentage points higher than that of total retail sales.

However, as of now, Jingrui Wangpu has not yet started engaging in online sales, and the company's appliance sales still rely on physical stores, only providing appliance maintenance and repair services through online channels. The company admits in its risk factors that if it cannot compete with existing online retailers in terms of price and service, its business and revenue will be adversely affected.

Overall, in the fiercely competitive appliance sales market, Jingrui Wangpu's advantages are not obvious. In the short term, the company has achieved revenue and profitability improvements by adjusting its business structure, but in the long term, it has not yet developed an online platform, and with its relatively small business scale, it is not so simple for Jingrui Wangpu to gain recognition from the capital market