青客公寓IPO招股书（英文）-2019.10.7-317页_5mb

Q&K International Group Limited IPO Summary

Core Content

Q&K International Group Limited (Q&K) is a leading technology-driven long-term apartment rental platform in China, offering branded apartments and value-added services to young urban residents. The company is conducting an initial public offering (IPO) of American Depositary Shares (ADSs), which represent Class A ordinary shares. The offering is subject to the Securities Act of 1933 and is expected to be effective as soon as practicable after the registration statement becomes effective.

Key Information

• Company Name: Q&K International Group Limited
• Jurisdiction of Incorporation: Cayman Islands
• Primary SIC Code: 6510
• Principal Executive Offices: Suite 1607, Building A, No.596 Middle Longhua Road, Xuhui District, Shanghai, 200032, PRC
• Agent for Service in the U.S.: Cogency Global Inc., 10 E. 40th Street, 10th Floor, New York, NY 10016
• IPO Details:
  • Class A Ordinary Shares: $100,000,000 proposed maximum aggregate offering price
  • Registration Fee: $12,980.0
  • Listing: NASDAQ Global Market under the symbol "QK"
  • Dual-Class Share Structure:
    • Class A: 1 vote per share, not convertible to Class B
    • Class B: 10 votes per share, convertible to Class A at any time
  • Founder Ownership: Mr. Guangjie Jin beneficially owns all Class B shares, which represent approximately 10% of total issued and outstanding share capital and 100% of voting power

Main Points

Business Overview

• Q&K provides branded long-term apartment rentals with average monthly rent under RMB2,000 (US$291).
• Operates under a dispersed model, sourcing apartments from individual landlords and managing them centrally.
• Achieved significant growth in available rental units, increasing from 940 in 2012 to 91,234 in 2018.
• Occupancy rates were 91.6% in 2017 and 92.4% in 2018, the highest among major platforms.
• The company is a pioneer in the branded long-term apartment rental market in China.

Market Trends

• The branded long-term apartment rental industry in China is underpenetrated and fast-growing.
• Penetration rate was 1.8% in 2018, expected to reach 11.2% by 2024.
• The dispersed model is more scalable and efficient, with a projected 52.7% CAGR in rent from 2018 to 2024, compared to 45.9% for the centralized model.

Business Model

• Leases apartments from landlords for 5–6 years with potential extensions.
• Average lease-in lock-in period is 63.3 months (as of 2018).
• Leases with tenants typically last 26 months, with an average tenant stay of 8.5 months in 2018 and 7.7 months in 2019.
• Uses technology to enhance efficiency, including:
  • Big data analytics for pricing
  • Centralized project management system
  • Intuitive mobile applications for streamlined operations

Value-Added Services

• Offers broadband, utilities, and other services.
• Launched Qingke Select, a new retail platform for tenants.
• Revenue from value-added services increased from 2.6% in FY 2017 to 11.7% in 2019.

Financials

• Net Revenues:
  • FY 2017: RMB522.7 million
  • FY 2018: RMB889.9 million (US$129.6 million)
  • 9 months ended 2018: RMB593.0 million
  • 9 months ended 2019: RMB897.9 million (US$130.8 million)
• Net Losses:
  • FY 2017: RMB245.4 million
  • FY 2018: RMB499.9 million (US$72.8 million)
  • 9 months ended 2018: RMB323.6 million
  • 9 months ended 2019: RMB373.2 million (US$54.4 million)
• EBITDA and Adjusted EBITDA were negative in all periods reported.

Strategies

• Market Leadership: Strengthen presence in existing cities and expand to new ones.
• Technology Enhancement: Improve operational efficiency and quality control.
• Value-Added Services: Expand product offerings to meet lifestyle demands.
• Asset-Light Approach: Reduce capital expenditure by leasing rather than owning.
• Capital Optimization: Lower expansion costs and explore strategic alliances and acquisitions.

Challenges

• Limited Operating History and Profitability Concerns
• Financing Access and Cooperation with Financial Institutions
• Tenant Acquisition and Retention
• New Market Expansion and Competition
• Regulatory and Legal Risks in China, including PRC laws and the company's corporate structure.

Corporate Structure

• Q&K E-Commerce is a principal subsidiary, with:
  • Guangjie Jin: 74.5% equity
  • Xiamen Siyuan Investment Co., Ltd.: 15.0%
  • Bing Xiao: 10.5%
• The remaining minority interests are either owned by Mr. Guangjie Jin or third parties.

Regulatory Status

• Qualifies as an emerging growth company under the JOBS Act.
• Benefits from reduced reporting requirements, including exemption from Section 404 auditor attestation.
• The company may remain an emerging growth company until one of the following occurs:
  • Total annual gross revenue reaches US$1.07 billion
  • Five years after the completion of the offering
  • Non-convertible debt issuance exceeds US$1.0 billion
  • Becomes a "large accelerated filer" under the Exchange Act

Risk Factors

• The Risk Factors section on page 17 discusses the risks associated with the company's business model, market conditions, and regulatory environment.
• Risks include limited operating history, profitability challenges, regulatory uncertainties, and corporate structure limitations.

Legal and Compliance

• The company is subject to U.S. and Chinese regulations.
• Legal matters and experts are detailed in the prospectus, with the legal opinion provided by Simpson Thacher & Bartlett LLP.
• Taxation and expenses related to the offering are also outlined in the document.

Additional Information

• The prospectus includes selected financial data, management discussion, industry analysis, and corporate history.
• The table of contents provides a detailed breakdown of the document structure, including sections on capitalization, dilution, and dividend policy.

Conclusion

Q&K International Group Limited is a fast-growing, technology-driven long-term apartment rental platform in China. Its dispersed model and focus on affordable housing for young urban residents position it as a leader in the market. However, the company faces significant risks and challenges, including profitability, regulatory compliance, and market expansion. As an emerging growth company, it benefits from reduced reporting obligations, but must navigate the complexities of operating in a rapidly evolving and underpenetrated market.