We are China’s largest used vehicle transaction service provider in terms of transaction volume in 2022, according to CIC. As an intermediary that connects used vehicle buyers and sellers, we facilitate used vehicle transactions through our transaction platform in two auction formats, namely online-offline integrated auction and online auction. In 2022, approximately 160,000 units of used vehicles were transacted through our transaction platform, with a market share of 12.6% among China’s used vehicle transaction service providers. In 2023, approximately 176,000 units of used vehicles were transacted through our transaction platform. We also have the largest number of offline auction sites and broadest offline service geographic coverage among China’s used vehicle transaction service providers. As of December 31, 2023, we had 79 auction sites strategically located in 74 cities and offered offline services in 317 cities across China.
As an intermediary that connects used vehicle buyers and sellers, we make available a wide range of used vehicle related services to facilitate used vehicle transactions. Since our inception in 2014, we have been committed to transforming China’s used vehicle transaction process and driving China’s used vehicle industry toward standardization, efficiency and transparency for close to ten years, accumulating in-depth industry experience. Unlike new vehicles that have standard vehicle conditions and retail prices, every used vehicle is a non-standard and technical product in terms of its condition and valuation and usually lacks publicly accessible records of its condition and information, which makes it highly challenging for a typical consumer to appraise the value of, and determine the transaction price for, a used vehicle. Meanwhile, most used vehicle business participants are geographically dispersed, making it challenging for upstream sellers to effectively match the demand from a large poll of downstream buyers. As such, China’s used vehicle transactions typically lack standardization, are not sufficiently transparent to sellers and buyers, and are ultimately not efficient. We believe our transaction platform can adequately address these pain points. We primarily provide used vehicle auction services through online-offline integrated auction, which allows used vehicle buyers across China to participate in in-lane auctions either offline in person or online via our mobile application in real-time, meanwhile granting them access to the information and valuation of the used vehicles. With our online-offline integrated auction model, we offer end-to-end, highly standardized and reliable solutions for used vehicle transactions, helping our sellers (primarily 4S dealership stores) and buyers (primarily Professional Buyers) optimize their used vehicle transaction process and improve efficiency and profitability of their used vehicle operations. As of December 31, 2023, over 6,900 4S dealership stores had disposed of used vehicles through our platform. During the Track Record Period, over 16,000 of our buyers were Professional Buyers (i.e. purchased three or more used vehicles in any given year on our transaction platform).
To meet the varied and evolving needs of used vehicle sellers and buyers, we complement our online-offline integrated auction services with a full suite of value-added services (primarily including pre-acquisition inspection and appraisal, used vehicle acquisition assistance, provision of ADMS system and title transfer services offered to used vehicle sellers) and other services (primarily including arrangement for sale of used vehicles, exhibition related services, and other services) throughout the entire used vehicle transaction cycle for our used vehicles sellers and buyers. From vehicle sourcing and acquisition, inspection and appraisal, auction and title transfer to logistics, we connect sellers with buyers in a highly efficient manner and offer them a more streamlined, simple and consistent transaction experience.
Our operating and financial performance has further reinforced our industry leadership position. Our transaction volume was approximately 261,000 units, 160,000 units and 176,000 units in 2021, 2022 and 2023, respectively. Although our transaction volume decreased in 2022 primarily as a result of COVID-19 resurgences in various regions across China in 2022, which led to decreased willingness of our buyers to purchase used vehicles and a decrease in the number of used vehicles entrusted to us by upstream sellers, following the improvement of the COVID-19 situation in China in 2023, our transaction volume increased by 10.1% in 2023, showing the resilience of our business model in a fluctuating market. The number of vehicles put up for auctions on our transaction platform increased from approximately 359,000 units in 2021 to approximately 384,000 units in 2023, representing a CAGR of 3.4%. As such, in 2021, 2022 and 2023, our transaction success rate amounted to approximately 73%, 51% and 46%, respectively, reflecting the faster increase in the supply of used vehicles put up for auctions and that our upstream sellers were more inclined to utilize transaction platforms for the disposal of their used vehicles, while our downstream buyers remained relatively conservative in purchasing used vehicles. In 2021, 2022 and 2023, the gross transaction value of used vehicles transacted on our transaction platform amounted to RMB13,719.7 million, RMB6,747.0 million and RMB7,398.2 million, respectively. Our average revenue per vehicle under our used vehicle auction business increased from RMB1,280 in 2021 to RMB1,636 in 2023, representing a CAGR of 13.1%. Our gross profit margin was 62.8%, 60.9% and 63.5% in 2021, 2022 and 2023, respectively. Our profit for the year was RMB165.1 million, RMB69.0 million and RMB9.3 million in 2021, 2022 and 2023, respectively. Our profit for the year decreased from 2021 to 2022 primarily due to our decrease in gross profit in 2022, which in turn was due to (i) a significant decrease in the used vehicle transaction volume in 2022 due to the COVID- 19 resurgences, and (ii) an increase in our labor cost in connection with the additional auctioneers and condition inspectors we hired. Our profit for the year decreased from 2022 to 2023 primarily because we recorded losses of RMB75.0 million in fair value change of financial liabilities at fair value through profit or loss, in line with the increased valuation of our Company in anticipation of this Offering.
Source: Autostreets (02443) Prospectus (IPO Date : 2024/05/23) |