Ruqi Travel (09680.HK) announced that the company intends to offer 30,004,800 shares globally, 3,000,500 shares in Hong Kong, China, and 27,004,300 shares in the international offering, and the IPO will be held from June 28 to July 5, 2024, with an expected pricing date of July 8, and the offer price will be HK$34.00-45.40 per share, with CICC, Huatai International and ABC International as joint sponsors; Trading in the Shares is expected to commence on the Main Board of the Stock Exchange on 10 July 2024.
Ruqi Travel has entered into a cornerstone investment agreement, pursuant to which the cornerstone investors have agreed to subscribe for a total purchaseable amount of US$102 million to US$105 million (or approximately HK$799 million to HK$820 million) at the Offer Price, subject to the satisfaction of certain conditions.
Assuming an offer price of HK$39.70 (i.e. the median of the indicative offer price range set out in this prospectus), the total number of Offer Shares to be subscribed for by cornerstone investors will be 20,657,300 Offer Shares. Cornerstone investors include GAC Industries, Pony.ai, Voyager (controlled by Didi Global Co., Ltd.), and WeRide.
Synthesis | Company Announcement Prospectus Edit | Arti
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According to Frost & Sullivan, in terms of transaction volume in 2023, Ruqi Travel ranked second in the Greater Bay Area. By the end of 2023, the number of registered users of the mobility service platform has reached 23.8 million, and the operating income from 2021 to the end of 2023 will be 1.014 billion yuan, 1.368 billion yuan and 2.161 billion yuan (RMB, the same below), with a compound annual growth rate of 46%.
According to the prospectus, Ruqi Travel was jointly founded by GAC Group and Tencent, and then introduced Pony.ai, a provider of automated driving solutions, as a strategic shareholder. GAC Group is supporting the development and growth of the company's mobility business, Tencent is empowering the company's market development and providing traffic portals, and Pony.ai is providing technical support in the early stage of autonomous driving commercialization.
By connecting automakers, internet companies and autonomous driving solution providers, Ruqi Mobility has quickly penetrated the market, focusing on nine cities in the Greater Bay Area. According to the Frost & Sullivan report, by the end of 2023, the company's user penetration rate in the Greater Bay Area exceeded 45%, ranking second, with a transaction volume of 2.741 billion yuan for mobility services (including ride-hailing, ride-hailing and Robotaxi), 97.7 million orders, and an average of 1.05 million monthly active users.
As of the end of 2023, the number of registered users of the mobility service platform reached 23.8 million, and the operating income from 2021 to the end of 2023 was 1.014 billion yuan, 1.368 billion yuan and 2.161 billion yuan, respectively, with a compound annual growth rate of 46%.
However, the Company's revenue growth could not fully cover the various costs and expenses incurred during the financial reporting period. Financial data show that the company's net profit loss from 2021 to the end of 2023 will be 685 million yuan, 627 million yuan and 693 million yuan respectively, and the cumulative loss in three years will reach 2 billion yuan. The largest loss of net profit mainly comes from sales and marketing promotion, as well as R&D expenses. The two accounting items add up to $380 million, $330 million and $340 million respectively from 2021 to 2023.
Ruqi Travel admitted in its financial report that it expects to continue to generate net losses and net operating cash outflows in 2024, 2025 and 2026. Therefore, the company has also developed a profitable roadmap: to expand the scale of the business and promote revenue growth; improve gross margin; improve the efficiency of operation and management; Improve the current net debt position.
It is worth mentioning that from 2021 to the end of 2023, the gross profit margin of Ruqi Travel will be -24.2%, -10.7%, and -7% respectively. Net liabilities were $152 million, $0.75 billion and $1.43 billion respectively.
According to the prospectus, Ruqi Travel is committed to research and development, and has established a strong technical advantage in intelligent travel. The company's self-developed AI algorithm model generates intelligent routes and matching schemes for drivers and passengers, forming the basis for a travel service platform that takes into account efficiency, reliability and safety.
For Robotaxi scenarios, Ruqi's open Robotaxi operation technology platform features three core modules: Vehicle Management System (VMS), Operation Supervision Platform (OMP) and Robotaxi Data Platform (RDP), which can realize remote management and control of Robotaxi through cloud technology to improve vehicle operation efficiency and service quality.
For autonomous driving solution providers, OEMs and governments, the company has created autonomous driving data solutions, such as artificial intelligence data and model solutions, high-definition maps and intelligent transportation solutions. In the company's technical services, the company's own AI perception algorithm basic model has an AI pre-labeled recall rate and accuracy rate of more than 95% in the driving dataset, and is applied to the company's artificial intelligence data and model solutions.
According to the prospectus, Ruqi Travel has received 3 rounds of financing since its establishment. Before the IPO, GAC and Tencent were the first and second largest shareholders of Ruqi Mobility, respectively. GAC Group, through its wholly-owned subsidiary, Zhonglong, holds a 19.89% stake in Ruqi Mobility, GAC Industries, the controlling shareholder of GAC Group, holds 15.31% of Ruqi Mobility, Tencent holds 18.41%, Guangzhou Public Transport Group holds 5.68%, and Pony.ai holds 5.34%.
According to Frost & Sullivan, in October 2022, Ruqi Bank launched the world's first travel platform with the commercial hybrid operation of drivered ride-hailing and Robotaxi services, marking a great stride towards commercialization of Robotaxi.
It is reported that the funds raised by Ruqi Travel through the IPO will be mainly used for the research and development of autonomous driving and Robotaxi operation services, the upgrading of travel service products and the improvement of operational efficiency, the expansion of user base and market penetration, and the strengthening of brand awareness. Among them, Robotaxi will be an important direction for the future development of Ruqi Travel.
In 2021, Ruqi Mobility began to promote the development and commercialization of Robotaxi, and successively cooperated with Qingzhou Zhihang, WeRide, and Pony.ai. In the Robotaxi scenario, Ruqi provides AI data and model solutions, high-definition maps and other technical services to automobile manufacturers and autonomous driving solution providers.
By the end of 2023, Ruqi's Robotaxi service has been in operation for more than 20,000 hours, covering 545 stations, and completing about 45.07 kilometers of safe trial operation, and a total of 281 vehicles have been connected to the company's Robotaxi operation technology platform, of which 35 are owned by Ruqi Mobility, and the rest are owned by partners such as Pony.ai and GAC R&D Center.
As the most promising application of autonomous driving technology, Robotaxi is expected to reshape the mobility industry by providing safer and more affordable mobility services. According to Frost & Sullivan, the total global market size of Robotaxi is expected to reach 810.4 billion yuan by 2030.
For subsequent development, Ruqi Mobility expects Robotaxi to achieve large-scale commercialization around 2026, and it expects that the cost per kilometer of Robotaxi will be lower than that of manned ride-hailing services, and the target group is individuals who currently use private cars or public transportation. "Initially, Robotaxi was expected to enter the smart mobility market and expected widespread adoption of Robotaxi worldwide by 2030." Ruqi travel said.