The Tsinghua Group welcomes an IPO. It is the robotics company with the highest revenue in the Hong Kong stock market.
In the 10th year of entrepreneurship, Zheng Yong finally led Geek+ to go public on the Hong Kong Stock Exchange, becoming the world's first listed company in the AMR warehouse robotics sector.
In this IPO, Geek+ set the offering price at HK$16.8 per share, raising a net proceeds of HK$2.206 billion. Its total market capitalization exceeded HK$21.8 billion. On the same day as Geek+, five other companies also rang the bell, catching up with the busy year of Hong Kong IPOs. In the first half of this year, 44 new stocks were listed in Hong Kong, raising over HK$100 billion.
Geek+'s Hong Kong public offering was oversubscribed 133.62 times, and its international placement was subscribed 30.17 times, ranking among the top 3 highest - multiple international placements in Hong Kong stocks this year and setting a record for the highest multiple of international placement in the Hong Kong technology sector. Sovereign wealth funds, a large number of international long - term funds, technology special funds, and hedge funds actively subscribed. After the opening of trading, the share price of Geek+ (02590.HK) soared 0.95% to HK$16.96 per share, with a market capitalization of HK$22 billion.
This IPO is the largest H - share IPO of a robotics company to date and the largest non - "A + H" technology company IPO in the Hong Kong market this year.
In 2014, it was an important turning point for Zheng Yong. At that time, he was still a senior investment manager at New Horizon Capital. During an inspection of an Amazon warehouse logistics project, Zheng Yong was shocked by the robots being fully promoted. After the inspection, he began to look for a similar entrepreneurial team in China but couldn't find one in the end.
So in 2015, Zheng Yong personally started a business in logistics robots. The reason that prompted Zheng Yong to start a business was closely related to his experience: after graduating from Tsinghua University, he worked at ABB, one of the "Big Four" in the robotics industry, for five years, and then served as a factory manager at a subsidiary of Compagnie de Saint - Gobain S.A. for three years. These experiences also made him believe that "logistics should be the first part to be replaced and revolutionized."
Also in this year, Kiva, which was acquired by Amazon, was renamed Amazon Robotics and began to be used in its own warehouses. Today, the number of Amazon's warehouse robots is approaching the scale of its human employees, and currently, there are more than one million robot armies shuttling through its distribution centers.
In addition to eight years of industry knowledge and two years of investment experience, Zheng Yong also needed a CTO. He invited Li Hongbo, a former computer teacher at Tsinghua University. Li Hongbo has more than 15 years of professional experience in the robotics field and more than 130 authorized patents (including more than 50 international invention patents). Li Hongbo is still the CTO and vice - president, holding 25.71% of the shares and being the second - largest shareholder.
According to Zheng Yong, in the early days of the business, there were only him and Li Hongbo, and their office was located in the basement of the FIT Building of the Department of Computer Science at Tsinghua University.
Then, two other founders were gradually introduced - Liu Kai and Chen Xi. Liu Kai also graduated from the Department of Computer Science at Tsinghua University and was once an engineer at the Beijing Institute of Control Engineering; Chen Xi once worked at Raisecom and is good at high - speed fiber - optic communication and wireless communication fields. It is worth mentioning that Liu Kai and Chen Xi each hold 18.08% of the shares.
Now, ten years have passed, and the four founders are still together. The strong stability is due to the clear equity structure. It can also be seen that Zheng Yong (holding 38.14% of the shares) is a founder who is willing to share benefits.
Group photo of the founding team (Source: Company)
01 The Growth History of Geek+
Geek+'s first investment was 10 million yuan from Xinyi Technology. Subsequently, it received investments from Volcanics Venture and Gaorong Capital. Volcanics Venture invested 21.25 million yuan, and Gaorong Capital invested 21.25 million yuan, totaling 42.5 million yuan, corresponding to a post - investment valuation of 210 million yuan. After getting the financing, the first goal given by the investors to Geek+ was to launch the product (goods - to - person) during that year's Double 11. But there were less than three months left, and there was only one machine. Finally, a 20 - person team worked day and night to complete it.
With the first sample from Tmall Supermarket, Geek+ was able to enter multiple e - commerce platforms in the second year of its business (i.e., 2016) and began to verify the commercialization of its AMR solutions. Note: AMR refers to autonomous mobile robots, which are robots designed with advanced sensors and algorithms and can navigate in an environment without human intervention; AMRs are usually used in logistics and warehouses to perform tasks such as material handling and inventory management.
In the third year of its business, i.e., 2017, Geek+ entered an explosive growth period. First, it successfully expanded overseas to Japan and delivered its first overseas project, becoming the earliest Chinese AMR company to go global. Second, Geek+ completed four rounds of financing in this year. At this time, Geek+'s valuation was 600 - 700 million yuan.
In 2019, Geek+ began to enter the German and American markets and established business teams. Geek+ also completed its Series C1 financing in this year, raising 116 million US dollars, and its valuation doubled to 560 million US dollars compared with the previous year. The global layout gave Geek+ higher expectations for the first time and also allowed them to see their competitiveness in the international market.
Zheng Yong once said in an interview, "When we enter each market, we don't focus on whether we can win but on how long it will take us to become the No. 1 in the local market. Many people say that Chinese products have good cost - performance and are cheap. But we are confident that our products and technologies are better than those of our competitors in developed countries."
The rapid expansion of its global business has enabled Geek+ to develop by leaps and bounds. In 2020, Geek+ continued to complete a Series C2 financing of 59 million US dollars and a Series D financing of 120 million US dollars. Its valuation continued to skyrocket to 970 million US dollars, making it a near - unicorn. In the same year, the sales volume of Geek+'s robots exceeded ten thousand units. During the pandemic, global companies faced important development opportunities. So it only took one year, from 2020 to 2021, for Geek+ to sell its second ten - thousand units of robots. Geek+ also successfully completed a Series D+ financing, totaling 225 million yuan + 10 million US dollars. Its valuation rose again to 8 billion yuan, corresponding to 1.24 billion US dollars. This was in March 2021.
By the end of the same year, Geek+'s valuation doubled to 15 billion yuan. It completed its Series E1 financing, totaling 1.195 billion yuan + 45 million US dollars. It is worth mentioning that Geek+ also included the financing planned for 2023 in this round. After that, Geek+ didn't have any more financing activities until this IPO.
Currently, Geek+'s shareholders include Warburg Pincus, CPE Yuanfeng, Granite Asia, Yunhui Capital, Guangdong - Hong Kong - Macao Greater Bay Area Technology Innovation Industry Investment Fund, D1 Capital, Vertex Ventures China, Ant Group, Volcanics Venture, Hongwei Capital, Gaorong Capital, Sail Link Capital, China Internet Investment Fund, Morgan Stanley, B Capital, Hefei State - owned Assets, Gao Xin Capital, Qingyue Capital, Yili, Haier, ABC Capital, Intel, CICC Capital, Hong Kong Science and Technology Parks Corporation and dozens of other well - known institutions and industrial investors. Among them, Warburg Pincus invested in Geek+ in July 2017, holding a stake as high as 11.86%; Granite Asia holds 6.19%; Ant Group's Ant holds a total of 4.93%; the Guangdong - Hong Kong - Macao Greater Bay Area Technology Innovation Industry Investment Fund holds a total of 4.60%.
From product development to commercialization, and then to expanding overseas to Japan, Europe, and the United States, Geek+'s development and financing rhythm have been very smooth. This is inseparable from the background of its founders and the investors' expectations for global robots.
A company's financing history and valuation reflect the capital market's recognition of its scarcity. The core scarcity of the robotics industry lies in the certainty of commercialization. Different from many robotics companies that are still in the exploration stage of commercialization or even earlier in the storytelling stage, Geek+ has completed large - scale global implementation, leads in terms of revenue scale, and has continuously improved its operating quality year after year. It is precisely this certainty of commercialization ability that has made Geek+'s financing rhythm very smooth and also reflects the investors' expectation that it will become an industry leader and their recognition of the long - term value of the track.
02 Geek+'s Financial Data and the AMR Business
According to Geek+'s prospectus, based on its 2024 revenue, it has become the world's largest provider of warehousing fulfillment AMR solutions, with a market share of 9%, and has ranked first for six consecutive years; however, in the global overall warehousing automation solution market, its share is only 1%.
Geek+ currently serves 800 end - customers, including 63 Fortune Global 500 companies. Its customers are distributed in more than 40 countries and regions around the world. To provide local services, Geek+ has established more than 48 service stations and 13 spare parts centers globally, with the ability to respond quickly 24/7. For example, it successfully deployed an AMR intelligent warehouse for Stork Up, a leading e - commerce logistics company in Hong Kong, China, within 12 days, helping it quickly achieve the digital and intelligent upgrade of its warehouse and respond to the peak business during promotional events in a timely manner.
As of December 31, 2024, Geek+'s current delivery volume is about 56,000 units, and more than 70% of its total revenue comes from overseas. The revenue is mainly concentrated in e - commerce, fast - moving consumer goods, and third - party logistics. Also, this efficient local operation system for delivery ultimately translates into stronger customer stickiness and repurchase momentum. In 2024, Geek+'s overall customer repurchase rate was as high as about 74.6%, and the repurchase rate of key customers in 2024 was as high as 84.3%, far exceeding the industry average.
Of course, the continuous repurchase by customers also fully confirms that Geek+'s products are gradually becoming the core infrastructure in the global supply chain system. For example, S&S Activewear, a leading American apparel company, has repurchased five times in three years to complete the intelligent upgrade of five logistics centers; UPS, a giant in the American 3PL industry, has successfully deployed more than a thousand AMRs in two warehouses in the eastern and western parts of the United States to cope with the peak season.
For the warehousing logistics robot industry, the volume of orders on hand is an important measure of a company's strength. In 2022, Geek+ had orders on hand worth 1.996 billion yuan; in 2023, it increased by 35% year - on - year to 2.694 billion yuan; in 2024, it increased by 16.56% year - on - year to 3.14 billion yuan.
In terms of corresponding revenue, it was 1.452 billion yuan in 2022; 2.143 billion yuan in 2023; and 2.409 billion yuan in 2024. From 2021 to 2024, Geek+'s compound annual growth rate of revenue reached 45%, far higher than the industry growth rate.
In terms of net profit, the net loss was 1.567 billion yuan in 2022, narrowed to 1.127 billion yuan in 2023, and further significantly narrowed to 832 million yuan in 2024; the adjusted net losses were 821 million yuan, 458 million yuan, and 92 million yuan respectively, and the adjusted net loss rate in 2024 was as low as 3.8%. Geek+ has significantly narrowed its loss rate for four consecutive years and is starting to reach the profit turning point, or may soon turn losses into profits.
A few years ago, Zheng Yong made two judgments: one was that when the annual shipment volume exceeded 50,000 units, it not only meant a decrease in cost space but also meant a huge change in the industry's recognition of the solution; the other was that if only one out of ten projects used robots, it might not be obvious. But once three projects started to use robots, the turning point of the entire market would come.
Currently, the turning point that Zheng Yong mentioned is becoming clearer and closer. In addition, with an annual revenue of 2.4 billion yuan, Geek+ has suddenly become the company with the largest revenue scale in the To B robotics field in Hong Kong stocks to date.
(Source: Prospectus)
From the perspective of the overseas market, in 2024, Geek+'s revenue share in the Asia - Pacific region and the United States was basically balanced: the Asia - Pacific region accounted for 28.1%, corresponding to revenue of 676 million yuan; the United States accounted for 26.1%, corresponding to revenue of 629 million yuan. Europe, the Middle East, and Africa together accounted for 17.9%, corresponding to revenue of 432 million yuan.
(Source: Prospectus)
In terms of gross margin, the gross margin of Geek+'s overseas business exceeds 46%, among which the gross margin of the warehousing fulfillment AMR solution exceeds 39%; however, the gross margin of the industrial handling AMR solution has decreased significantly, from 18.4% to 12.1%. In response, Geek+ explained that the industrial logistics field is highly competitive, and its pricing power for large customers is weak, especially in the lithium - battery and new - energy industries.
In the prospectus, the four major participants in the AMR market mentioned by Geek+ are Hikrobot, the French company Exotec, and the American company Locus Robotics, among which Hikrobot has a greater impact on Geek+. Hikrobot's strength in the domestic industrial logistics scenario is obvious to all. Geek+ leads in the warehousing fulfillment scenario and global layout.
The demand for global warehousing fulfillment AMR solutions accounts for 60% of the total AMR solutions, and the market size has increased from 7.9 billion yuan in 2020 to 24.3 billion yuan in 2024, with a compound annual growth rate of 32.4%. It is expected to reach the scale of 100 billion yuan by 2029.
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