Auto services

Chinese car service platform Tuhu gears up for Hong Kong IPO

Your browser does not support HTML5 audio

Automotive services platform Tuhu filed its prospectus on the Hong Kong Stock Exchange (HKEx) on Monday, with Goldman Sachs, CICC, Bank of America and UBS as co-sponsors. Market sources say Tuhu plans to raise $700 million in its next public listing. 2021 has seen a flurry of rumors surrounding a possible Tuhu IPO – all of which have been officially denied by the company.

Founded in Shanghai in 2011, Tuhu is a platform focused on after-sales service and car maintenance, providing online reservations as well as offline installation of car maintenance.

According to the prospectus, Tuhu covers most passenger car models sold in China, specifically covering 239 brands and more than 44,000 models, meeting a full range of automotive needs, from tire and chassis parts replacement to maintenance, repair and beauty of cars.

The prospectus also shows that Tuhu has yet to make a profit. According to the data, the company achieved revenues of 7.04 billion yuan ($1.11 billion) and 8.753 billion yuan ($1.38 billion) in 2019 and 2020, respectively. The losses amounted to 3.428 billion yuan ($541.33 million) and 3.928 billion yuan ($620.29 million) respectively. In the first three quarters of last year, the company’s revenue reached 8.441 billion yuan ($1.33 billion), an increase of nearly 42% year-on-year, and the loss attributable to shareholders was 4.435 billion yuan ($700.36 million), a year-on-year increase of 63%.

As of September 30, 2021, Tuhu’s online interface had 72.8 million registered users, and in the year after the above-mentioned period, it had 13.9 million commercial users, an increase of 35.6 % year over year. According to China Insights Consultancy, Tuhu’s monthly active users reached 10 million in September 2021, making it the largest car owner community gathered by Chinese auto service providers.

SEE ALSO: Hesai Technology Introduces New Automotive-Grade Hybrid Solid-State AT128 Lidar at CES 2022

The prospectus reveals that Tuhu’s fundraising will continue to be used for business expansion, including upgrading supply chain capabilities and R&D of platform systems and technologies data analysis. It expands the store network and franchisee base to further strengthen the relationship with franchisees. The Company provides new energy car owners with automotive service-related investment and service-related tool and equipment investment.

In terms of financing, Tuhu has been treated favorably in the capital markets. Since its inception, Tuhu has received 16 rounds of funding, with a total fundraising of over 9.1 billion yuan ($1.44 billion), and has been invested by TencentBaiduGoldman Sachs, Hillhouse Capital, Sequoia China, Qiming Venture Partners, Joy Capital, Legend Capital, CICC, Haitong Kaiyuan, CCB International and many other institutions.