The mainland cookware brand CAROTE, which successfully passed the Hong Kong Stock Exchange's listing hearing at the end of August, is reported to be initiating its IPO process next week. According to IFR, CAROTE is currently conducting a pre-roadshow to gauge institutional investor interest; furthermore, the company plans to open its book on Monday, September 23, with an estimated fundraising target of approximately $100 million (equivalent to HKD 780 million). BNP Paribas and China Merchants Jinling International are serving as sponsors.

(Source: CAROTE Prospectus)

Overview of CAROTE

CAROTE is a globally recognized leader in the cookware industry. Since launching its brand in 2016, the company has established a significant presence in the online cookware segment across major markets, including China, the United States, Western Europe, Southeast Asia, and Japan. Consequently, it has become one of the fastest-growing cookware brands worldwide. CAROTE products emphasize "maximizing utility" and "value for money," aiming to provide customers with practical, well-designed, and affordably priced products that promote a modern cooking lifestyle.

CAROTE Business Development

The progression of CAROTE's business reflects its understanding of market demands as well as its commitment to delivering quality products. Founded in 2007 and headquartered in Hangzhou, China, CAROTE initially provided OEM services to overseas brands. However, in 2013, the company pivoted to focus on ODM operations, designing, developing, and manufacturing customized cookware for international brand owners.

Leveraging its expertise in ODM, CAROTE entered the online retail market in 2016 with its own brand, "CAROTE," which enabled the company to engage directly with consumers and rapidly grow into a well-known cookware brand.

As the brand business expanded, CAROTE transitioned to a fully outsourced and asset-light model in February 2022 to enhance production capacity and efficiency. During the performance record period, CAROTE's ODM and brand businesses experienced continuous growth, with brand revenue increasing significantly from RMB 283.3 million in 2021 to RMB 1,379.9 million in 2023, reflecting a compound annual growth rate (CAGR) of 120.7%. For the three months ending March 31, 2024, brand revenue reached RMB 450.0 million, marking an 82.6% year-on-year increase.

(Source: CAROTE Prospectus)

CAROTE's Financial Performance

According to the prospectus, CAROTE's revenue for the years 2021, 2022, 2023, and the first three months of 2024 was RMB 675 million, RMB 769 million, RMB 1.583 billion, and RMB 503 million, respectively. The corresponding net profits were RMB 32 million, RMB 109 million, RMB 237 million, and RMB 89 million.

(Source: CAROTE Prospectus)

In conclusion, the IPO plan represents another milestone in CAROTE's development. Given its robust growth in the cookware industry and strong brand positioning, CAROTE is anticipated to receive a favorable response in the capital markets.

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