, 100 million US dollars and 400 million US dollars. Some of Shell’s existing shareholders and third-party investors have agreed to subscribe for at least US$800 million in ADS. In terms of market subscription, Futu data shows that as of 15:00 on August 11, the number of people who subscribed for shells through Futu Securities has exceeded 23,000.
The most concerned thing about shells going to the U.S. is “Bleeding on the Market.” In 2017, 2018, and 2019, Shell recorded net losses of 538 million yuan, 428 million yuan, and 2.18 billion yuan respectively. It is worth noting that Shell has always had high equity costs, that is to say, excluding this For part of the cost, Shell has achieved profits in the past three years, which are 62 million yuan, 46 million yuan, and 780 million yuan respectively.
Compared with Redfin, an online real estate brokerage company listed on NASDAQ in 2017 and still losing money, Shell’s profit advantage is even more obvious.
The updated prospectus shows that Shell’s net profit in the first half of 2020 increased by 188.6% year-on-year to 560 million yuan. When split, Shell’s net profit in the second quarter was 2.838 billion yuan, a year-on-year increase of 478%.
At the same time, Redfin’s fiscal 2020 mid-year report released on July 30 showed that the net loss attributable to the parent in the first half of the year increased by 14.78% year-on-year to US$68.012 million, of which the net loss attributable to the parent in the second fiscal quarter was 661.1 Million US dollars, an increase of 47.64% year-on-year.
Redfin’s model is similar to Shell, not only has the traffic attribute under the platform model, but also provides real estate agency services. Since the epidemic this year, Redfin has launched virtual inspections and free virtual decoration packages. Year-to-date, Redfin’s stock price has risen by more than 90%, which is 2.7 times higher than the initial issue price of $15.
According to Berry Research’s previous report data, Shell’s IPO pricing corresponds to the highest company valuation of approximately US$21 billion, corresponding to a revenue of 46 billion yuan in 2019, and its PS (market-to-sales ratio) is 3.17 times. In terms of comparable company valuations, Nasdaq’s Redfin and Shell business models are similar, with a historical average of 3.17 PS, which has risen to 4.92 times PS due to the strong growth of US real estate sales in the past six months. In the case of better profitability than Redfin, Shell’s current valuation is not in the overestimated range. This may also be the confidence of major investment banking institutions to implement the green shoe mechanism and follow the investment.
In addition, in the post-epidemic era, Shell’s advantage lies in the launch of “VR listings” in 2018, which can be used as an effective supplement for offline viewing on the platform.
As a result, Shell is likely to become one of the most sought-after companies in China’s concept stock IPOs this year when it is benchmarked against Redfin in its entire business and shows stronger profitability.