According to the data of the prospectus, in 2018 and 2019, the business income of shell was 28.6 billion yuan and 46 billion yuan (the same below), with the growth rate of about 60%. In 2019, the GTV (total transaction volume) of shell reached 2.13 trillion yuan.
Commission is the main income
We divide the whole industry chain of real estate and housing into four areas: manufacturing, trading, housing and service support represented by finance. We believe that through the in-depth service of offline brokers and the consumer cognition established by online data, we may create new value in the whole industry chain. This is the statement of a letter to shareholders issued by Zuo Hui, founder and chairman of shell, on the same day of the disclosure of the prospectus.
Born out of the chain of real estate brokerage enterprises, shell was established in April 2018 and positioned as a technology driven new residence service platform. Shell is a real estate trading platform integrating online and offline, and online capability is its significant advantage. Through the digitization and standardization of data, transaction process and service quality, the online operation network driven by data and technology can be built.
According to the data of the prospectus, shell has entered 103 cities in China, connecting more than 456000 brokers and 42000 brokerage stores of 265 new brokerage brands.
In February 2020, shell officially launched a VR Sales Department for new house business, covering multiple functions, such as VR viewing, VR with viewing, online subscription, no reason to check out, online refund, etc., to provide one-stop online house purchase service for house buyers.
In the prospectus, shell group did not disclose the scale of funds to be raised in the IPO, but only mentioned that the funds raised were mainly used for research and development, so as to continue to invest in the companys platform functions and infrastructure technology, the expansion of new home trading services, the diversification of service products and the expansion of business to new regions, as well as general corporate purposes. But according to investors, shells IPO plans to raise $1 billion to $2 billion.
According to the prospectus, shells revenue in 2017, 2018 and 2019 was 25.5 billion yuan, 28.646 billion yuan and 46 billion yuan. However, affected by the epidemic situation, the growth momentum slowed down in the first quarter of this year. As of March 31, 2020, the first quarter of this year, Shell Groups revenue decreased by 12.75%, reaching 7.120 billion yuan.
In terms of net profit, Shell Group has been in a loss state in the past three years: the net loss in 2017 reached 538 million yuan, narrowed to 428 million yuan in 2018, and 2.180 billion yuan in 2019.
According to the prospectus, shells income mainly comes from the Commission of housing transaction services. Among them, the income of second-hand house transaction and new house transaction in 2019 is 24.6 billion yuan and 20.2 billion yuan respectively.
Chain home is installed in the IPO framework of shell to find a house. According to the information provided by shell, we own and operate the leading brand chain of Chinas real estate agents, which is an integral part of the shell platform. We firmly believe that the successful experience of chainers has helped pave the way for the construction of industry infrastructure and standards, and the rapid and sustainable growth of shells.
Shell can complete the leap from establishment to listing in just two years, which is closely related to the chain intermediary Empire established in 2001. Over the past 19 years, Lianjia has built a dense offline intermediary network throughout the country, and the promotion of offline network in the early stage of shells establishment is based on chain family and gradually extends outward.
Tencent Hill Softbank is an important shareholder
In 2016 and 2017, Lianjia completed round B and round C financing successively, of which the scale of round B financing was 6 billion yuan.
Among them, Lianjia completed round B financing in 2016, with investors including Huaxing capital, Baidu, Tencent, new hope group, Taiwan asset, source capital, Jingwei China, Zhiyi capital, etc. In 2017, Lianjia completed round C financing, with investors including rongchuang, Vanke, Hillhead capital, Tencent, Huaxing capital, new hope group, etc. Shell will complete round D financing in 2019, with participants including Softbank, Tencent, Hillhead and Sequoia, with a total financing amount of more than 2.4 billion US dollars.
Tencents 12.3% stake is the second largest shareholder; Softbanks svfiishell subco (Singapore) Pte.Ltd . the shareholding is 10.2% and Hillard capital is 5.3%.
According to the prospectus, shell is listed in US stocks under the structure of vie. In July 2018, shell established shell holdings as a holding company in the Cayman Islands, and since then a series of intermediary holding entities have been established to control domestic business entities.
In the prospectus, shell quoted CIC data to report that in 2024, Chinas housing sales and rental GTV through real estate brokerage services will increase from 10.5 trillion yuan in 2019 to 19.1 trillion yuan in 2024, and the brokerage service penetration rate will increase from 47.1% in 2019 to 62.2% in 2024.