Explore YXT.COM Group Holding Limited’s upcoming IPO, set for August 15, 2024

YXT.COM Group Holding Limited (YXT), a China-based online knowledge exchange platform that connects professionals and experts across various industries, providing access to valuable information, consultation services, and industry insights, had expected to float its IPO on 15^th of August 2024. It aims to gather US$ 33.6 million with 2.8 million American Depositary Shares (ADSs), with the price range of US$11.00 to US$13.00 per ADS.

Company Overview

YXT.COM Group is a market leader in China’s digital corporate learning market offering advance SaaS-based software and content business model. Its solutions help streamline the delivery of cloud-enabled learning management systems and solutions, helping customers transform their businesses by offering high-quality content to meet corporate learning needs and generate incremental revenues from subscriptions and upsells. Furthermore, it provides customized learning solutions familiar with diverse corporate learning requirements which are relevant across various industries, organization hierarchies, growth phases and equips organizations to improve their learning solutions and support organizational growth in a rapidly changing technological landscape.

Company Strategy

The YXT corporate strategy hinges on the effective deployment of experience-based innovative SaaS for a new wave of corporate learning in China by combining software and content to offer customizable cloud learning solutions according to organizational demand. The company focuses on large organizations with a consistent need for training to ensure the cultivation of subscriptions and subsequent sales to sustain itself in an online knowledge exchange market.

IPO Profile

IPO Objective:

The IPO proceeds shall go into research, sales and marketing, and other strategic activities, which will make the firm well-suited to grow in this competitive and dynamic market environment that has been occasioned by innovations in technology.

Application Process of IPO

In order to invest on NASDAQ, it is necessary to make use of a brokerage account. As a first step, enroll in a reliable brokerage firm that offers trading in NASDAQ, and fill out the registration form with your basic and financial information. In the next step, make some deposits into your account in preparation for buying shares. Upon registration of the account, fund the account and then proceed to the trading platform. Go to the YXT and type the number of shares you wish to buy. If you prefer, you can enter a market order at the prevailing market price or a limit order at which you do not wish to pay more and leave a submitted order.

Financial Analysis of Company

Financials in millions CNY

YXT.COM Group Holding Limited has shown a concerning financial trajectory over the past two years. Revenue decreased from CNY 430.64 million in 2022 to CNY 424.02 million in 2023, a decline of 1.54%. Gross profit fell from 232.74 million CNY in 2022 to 229.54 million CNY in 2023. However, the company reported an improved operating loss of -328.6 million CNY in 2023, compared to -620.83 million CNY in 2022, and net income improved from -614.78 million CNY in 2022 to -220.46 million CNY in 2023. EBITDA also improved to -203.71 million CNY in 2023 from -613.73 million CNY in 2022. Despite revenue and gross profit declines, YXT shows signs of financial recovery with reduced operating and net losses, focusing on operational efficiency as it prepares for its Intial Public Offering.

Competitor Analysis

YXT.COM Group Holding Limited operates in the competitive digital corporate learning market in China. Its top competitors include:

• TAL Education Group

TAL Education Group is a Chinese company specializing in after-school tutoring services for primary and secondary school students. It was established in 2003 in Beijing, China. The letters that comprise the phrase “TAL” are “Tomorrow Advancing Life,” which represents the objective of the business to promote learning by constantly refining the teaching methods and approaches by using advanced technologies. TAL’s services include small classes, individual tutoring, and online courses, as students’ requirements vary. It has also added test preparation and learning services for students going to China, and it has effectively established itself as a key player in the Chinese education market.

• New Oriental Education & Technology Group

New Oriental Education & Technology Group, Inc is a leading provider of private educational services in China, headquartered in Beijing. Established in 1993, New Oriental offers a comprehensive range of educational programs, including language training, test preparation for exams like TOEFL and GRE, and K-12 tutoring. It is recognized as the largest private educational institution in China by enrollment and program offerings. The company was the first Chinese education firm to be listed on the New York Stock Exchange in 2006. With a strong focus on online education, New Oriental has invested heavily in digital platforms to expand its reach, catering to students across various age groups and educational needs.

• iTutorGroup

iTutorGroup is an online education company that was founded in 1998 and is based in Shanghai, China. The main focus of iTutorGroup is providing individualized educational services. The start-up uses big data analytics and smart matching to ensure students have the right teachers from over 80 countries to teach them in a live virtual environment with interactive sessions. It offers the students the freedom of when and where they can learn, thus placing the company at the forefront of online education worldwide.

• Hujiang

Hujiang Company is an online education institution in China that aims to offer intensive and affordable learning services. It was established in 2001. It offers courses in almost all fields, which include language learning and non-language learning, K–12 education and professional skills learning. These technologies include artificial intelligence and big data, which make it possible for a learner to have an individualized and interesting learning process. Hujiang boasts a large number of users and therefore strives to popularize quality education for learners of any age and status, stimulate the overall learning process and promote improvements in learners’ results and achievements.

• Xueersi

Xueersi is a Chinese education company that operates under TAL Education Group; it focuses on after-school tutoring services. Founded in 2003, Xueersi provides comprehensive education services in mathematics, science, English, and Chinese language training at K–12 levels. In addition, the company integrates innovative technologies including artificial intelligence and big data to enhance the learning process and the achievement of desired educational goals. Over the years, it has transformed into a highly respected brand in the education industry Since its inception, the company has been focused on delivering quality education to learners and finding better ways of achieving this in any given time.

Details on Company Management

• Xiaoyan Lu – Director, Founder, Chairman of the Board
• Teng Zu – Director, Co-founder, Chief Executive Officer
• Jie Ding – Director, Co-founder
• Pun Leung Liu – Director, Chief Financial Officer
• Yazhou Wu – Chief Technology Officer
• Guodian Huang – Independent Director
• Yunjian Ling Independent Director

In conclusion, YXT.COM Group Holding Limited’s upcoming IPO represents a significant step in the company’s journey to solidify its presence in China’s rapidly growing digital corporate learning market. With its focus on SaaS-based software and content solutions, YXT aims to cater to the evolving needs of large organizations, helping them streamline their learning processes and drive growth in a competitive landscape. Despite facing financial challenges over the past few years, the company has shown resilience and a commitment to operational efficiency, as evidenced by the reduction in its operating and net losses.

As YXT prepares to go public, the proceeds from the IPO are expected to fuel further research, sales, and marketing efforts, enabling the company to strengthen its market position and continue innovating in the corporate learning space. Competing with established players like TAL Education Group, New Oriental Education & Technology Group, and others, YXT’s ability to adapt and meet the diverse needs of its customers will be crucial to its long-term success.

The leadership team, led by Founder and Chairman Xiaoyan Lu, alongside a strong management group, brings a wealth of experience and expertise to guide the company through this pivotal phase. Investors considering participation in YXT’s IPO should weigh the potential growth opportunities against the financial risks and challenges inherent in the competitive education technology sector. As the company continues to evolve and expand, its success will depend on its ability to innovate, execute its strategic vision, and navigate the dynamic market landscape.