Shansong, identified by its stock ticker FLX, successfully launched its IPO on Nasdaq. Through this offering, the company sold 4 million American Depository Shares at $16.5 each, securing a total of $66 million in funds. The share price initially surged over 23%, peaking at $21.95 before closing at $18.01, valuing the company at approximately $1.28 billion.
The company plans to utilize the funds to expand its customer base, enhance market penetration, build brand recognition, and invest in technology and research. Early investors have benefitted considerably from this IPO. SIG Asia Investments holds a 9.7% stake with 3.2% voting rights, making it the largest institutional investor. CDH Investments follows with an 8.9% stake and 2.9% voting rights, while Shunwei Capital holds 7.8% of shares with 2.6% voting rights.
Founder, Chairman, and CEO Peng Xue is the controlling shareholder with a 22.7% stake and 74.6% voting rights, valued at around $290 million based on the IPO's closing market capitalization. Co-founder and Executive President Hongjian Yu holds a 1.6% stake, and Director Haibo Ru holds a 4.8% stake.
Positioned in the fast-growing instant delivery sector in China, Shansong focuses on one-on-one delivery mode rather than bulk delivery. The number of registered couriers increased from 1.1 million in early 2021 to 2.7 million by mid-2024, while registered users grew from 31.1 million in 2021 to 88.9 million in 2024. During the first half of 2024, each active courier averaged 9.3 orders per day.
From 2021 to 2023, Shansong's revenue rose from ¥3.04 billion to ¥4.529 billion, with gross profit climbing from ¥189 million to ¥395 million and gross margin improving from 6.2% to 8.7%. Revenue in the first half of 2024 reached ¥2.284 billion, reflecting a 7.6% increase, with gross profit up 40% to ¥257 million, yielding an 11.3% gross margin.
Courier wages account for the largest share of Shansong's revenue costs. These expenditures were ¥2.551 billion, ¥3.614 billion, ¥3.975 billion, and ¥1.951 billion from 2021 through the first half of 2024, with the percentage of total revenue decreasing from 90.5% to 85.4% over the same period.
Operational expenses, including sales, administrative, and R&D costs, have been reduced significantly from ¥490 million in 2021 to ¥384 million in 2023, and further down to 7.7% of revenue in the first half of 2024. With effective cost management and growing revenue, Shansong turned profitable in 2023, achieving net profits of ¥110 million and ¥124 million in 2023 and the first half of 2024, respectively.
