Device-as-a-service (DaaS) provider Bear Rental’s parent company, LX Technology, passed a hearing before the Hong Kong Stock Exchange on Oct. 7, with Haitong International Securities Group acting as exclusive sponsor.
Founded in 2004, LX Technology began as a computer assembly service provider and used PC dealer. It launched short-term and long-term computer rental projects and provided IT technical services to companies in 2008 and 2013 respectively. In 2017 work began on setting up sub-supplier and customer networks for obsolete devices. In 2018, the company introduced SaaS-based device management services and a new brand called Bear Rental.
Bear Rental currently offers a suite of digital DaaS solutions including device subscriptions, IT technology subscriptions, SaaS-based device management services and device recycling.
From 2019 to 2021 and the first half of 2022, the number of registered enterprise customers of LX Technology was 801, 2,152, 4,638 and 6,611, respectively.
From 2019 to 2021, LX Technology’s revenue was 500 million yuan (US$70 million), 1.022 billion yuan and 1.330 billion yuan, respectively, while Adjusted EBITDA was 37 million yuan, 165 million yuan and 224 million yuan, respectively. In the first half of 2022, revenue grew 59.1% year-on-year to 854 million yuan, while Adjusted EBITDA rose 15.4% year-on-year to 128 million yuan.
Since its inception, LX Technology has received investment from JD.comTencent, Lenovo, Fortune Capital, Oriental Fortune Capital, Great Wall Fund and Shenzhen Hightech Investment. Before the IPO, JD.com and Tencent held 13.22% and 1.88% of the shares in LX Technology, respectively. Li Jing, Vice President of JD.com and President of JD Retail’s Enterprise Business Unit, served as a non-executive director of LX Technology.
As companies continue to invest in IT equipment and deepen office flexibility, the device lifecycle management market in China is expected to witness faster growth in the coming years, which will grow to 138.2 billion yuan by 2026 an annual growth rate of 32.0% from 2021 to 2026. according to China Insights Consultancy. In addition, the market size of the appliance recycling business in China in terms of revenue has increased from 1.8 billion yuan in 2017 to 6.8 billion yuan in 2021, and is expected to reach about 26.1 billion yuan in 2026 .
SEE ALSO: Fuel cell system maker SinoHytec files for Hong Kong IPO
Hu Zuoxiong, the founder of LX Technology, said in an interview with the 21st Century Business Herald that the company’s recycling business is relatively stable because of large companies like Tencent and Alibaba have high demands on the use of the equipment. Their devices are typically retired about every four years, while ByteDance’s is about three years. Subscription services will be aimed at small and medium-sized businesses, which will gradually overtake recycling.
Comments are closed.