“Opportunity does not come to the door, only people go to find opportunity.” Dickens once wrote in Great Expectations. The Geely family's entrepreneurial army, with its impressive achievements, seems to be precisely the group that best knows how to seize opportunities.

In 2024, the Geely family continued to update its record, successfully bringing out its eighth IPO, followed by the ninth. Lotus ELETRE and Zeekr ZEEKR both rushed towards IPO and successfully landed on the US stock market.

Image source: Xinjiao Automobile official account

Recently, the Geely family's entrepreneurial army welcomed another “general” – Xinjiao RV Co., Ltd. Led by the “young general” of the Geely family, Miao Xuezhong, Xinjiao formally submitted its prospectus to the Hong Kong Stock Exchange recently.

Now, the RV brand Xinjiao has made a grand debut, and Miao Xuezhong's “RV dream” is about to come true?

Talented people emerge in succession in the Geely family, and Miao Xuezhong “comes with a dream”

Miao Xuezhong, as the leader of Xinjiao Group, has followed Li Shufu, the founder of the Geely Group, since he was 17 years old. In 1993, with Li Shufu's help, Miao Xuezhong keenly captured the opportunity for the Geely Group to venture into the aluminum-magnesium-plastic panel industry, quickly building a huge sales system nationwide with annual sales once exceeding 100 million yuan.

In 1999, Miao Xuezhong followed Li Shufu to devote himself to the automotive manufacturing industry. At that time, Miao Xuezhong, only 28 years old, was entrusted with the important task of serving as the general manager of Geely Haoqing Automobile Company, making him one of the youngest CEOs in the global automotive industry.

During the early entrepreneurial stage of the Geely Group, facing numerous challenges, Miao Xuezhong led his team to strive diligently and achieved the remarkable achievement of selling 30,000 vehicles annually, earning him the reputation as Geely's “young general”.

After following Li Shufu for 15 years, Miao Xuezhong's career did not end at Geely.

In 2002, Miao Xuezhong started his own business and founded Jiao Automobile, focusing on the research and development and production of SUV products. Impressively, from the initiation of the project to the successful launch of the first new vehicle, Jiao Automobile took only 168 days, setting a new record for the fastest product launch by a new enterprise.

In 2014, Miao Xuezhong further expanded his business empire by establishing Regent Company and successfully acquiring the famous RV brand Regent, which has a history of over 30 years, thus officially entering the Australian RV market.

Image source: pixabay library

This time, the “young general” of the Geely family, Miao Xuezhong, comes with a dream.

Miao Xuezhong firmly believes that the key to a company's sustainable development lies in rapidly enhancing its R&D capabilities to fill the resulting talent gap. Moreover, a company should possess a tenacious spirit of survival and a keen awareness of risk perception to adapt flexibly in various market environments.

In fact, since its inception, Jiao Automobile has established the strategic guideline of “rooting in the domestic market and actively expanding overseas markets” and started to strengthen the talent team in its international trade department.

Furthermore, in May this year, Xinjiao officially embarked on its IPO journey, seeking a broader market and more opportunities. In September of the same year, Xinjiao successfully obtained the overseas listing filing notice from the China Securities Regulatory Commission, laying a solid foundation for its subsequent hearing by the Hong Kong Stock Exchange.

Now, Jiao Automobile, which has just achieved “slight profits,” carries Miao Xuezhong's dream of building an “international brand” and sets sail again. If this IPO is successful, it will become the first listed company in China's RV industry, blazing a trail for the industry.

When the “doer” of car manufacturing meets RVs, it sparks a unique “firework”

According to the prospectus, from 2021 to 2023 and the first half of 2024, Xinjiao achieved revenues of 299 million yuan, 498 million yuan, 720 million yuan, and 422 million yuan, respectively, showing a continuous growth trend over the past three years.

Image source: Xinjiao prospectus

Correspondingly, product sales also showed robust growth. From 2021 to 2023 and the first half of 2024, Xinjiao delivered a total of 1,330, 2,127, 2,694, and 1,427 RVs to customers, respectively.

In the relatively concentrated RV market system of Australia and New Zealand, Xinjiao ranked second in terms of market share in the Australian and New Zealand RV industries in 2023 based on revenue and sales volume. This is undoubtedly a strong affirmation of Xinjiao's market position.

Breaking it down, Xinjiao operates three independent brands: the mid-range best-selling brand Snowy River, the luxury brand Regent, and the semi-off-road brand NEWGEN. Among them, Snowy River, the mid-range best-selling brand, has the highest sales proportion, consistently staying above the 70% threshold from 2021 to 2023 and the first half of 2024.

It is noteworthy that the sales of all three brands have grown at a high speed without exception.

The sales of Snowy River, the mid-range best-selling brand, increased from 233 million yuan in 2021 to 550 million yuan in 2023; the sales of Regent, the luxury brand, increased from 35.098 million yuan in 2021 to 84.338 million yuan in 2023; and the sales of NEWGEN, the semi-off-road brand, increased from 30.215 million yuan in 2021 to 76.234 million yuan in 2023.

Moreover, in terms of profitability, Xinjiao has not let down. The overall gross profit margin also increased from 16.7% in 2021 to 25.1% in 2023, surging to 32% in the first half of 2024.

In addition, its net profit also surged from 25.1 million yuan in 2021 to 33 million yuan in 2022 and further increased to 78.8 million yuan in 2023. In the first half of this year, Xinjiao has already achieved a net profit of 40.4 million yuan. The corresponding adjusted net profits were 25.1 million yuan, 33 million yuan, 78.8 million yuan, and 55.7 million yuan, respectively.

Image source: Xinjiao prospectus

Xinjiao, which has the entire chain of product research and development, manufacturing, and sales in its hands, has achieved such results, which is closely related to its continuously increasing R&D investment. According to the prospectus, from 2021 to 2023, R&D expenditures were 2.835 million yuan, 5.112 million yuan, and 7.968 million yuan, respectively, and reached 5.625 million yuan in the first half of 2024.

Currently, with continuously increasing revenue and sales volume, steadily growing profits and R&D expenditures, Xinjiao has basically gained a firm footing in its niche market. Miao Xuezhong, the “young general” of the Geely family, has made a good start for his “dream journey”.

Imported Products Welcome Their “Glorious Moment,” and Xinjiao Enters the “Bonus Period”

It has to be said that behind the rapid growth of Xinjiao's performance in the past three years, the continuously improving global RV market has provided a strong impetus.

RVs, an imported product originating from the Caravan used by Gypsies migrating around in the 14th century, have a long history dating back to ancient times.

Entering the 1960s and 1970s, with the rise of American hippie culture, a group of young people chose to challenge the political and cultural norms of the time through art and action. They transformed family cars into livable mobile homes and embarked on journeys, gradually bringing the concept of RVs into the public eye.

Image source: pixabay library

RVs symbolize a choice of “travel as life.” In the spatial orientation of “car as home,” they carry people's endless pursuit and dream of freedom. They can take you to explore the clear streams in the forest or directly reach the idyllic paradise in the mountains.

“Buying an RV is buying a new lifestyle.” Under the influence of this new living concept, the global RV market has shown a strong growth trend. In 2023, RV sales successfully exceeded 31.7234 billion dollars, and it is expected that by 2030, global RV market sales are expected to reach 35.8304 billion dollars.

Moreover, the domestic RV market is also heating up simultaneously. The RV culture has become prevalent on major short video platforms, and RV camping has become a hot topic among the middle class's social circle. For a time, the domestic RV ownership and sales volume have repeatedly hit new highs, and the domestic RV market size reached 533.8 million dollars in 2023.

Xinjiao, which aims to ride the trend, is now at the forefront. At the same time, it is also ready to join this long-distance race.

Its model of “Made in China + Assembled in Australia” provides strong support for the long-term development of its brand. This “division of labor” approach plays to its strengths and avoids its weaknesses.

Currently, China has a complete automotive industry chain and leading manufacturing capabilities. RV manufacturers can rely on local supply chains and technological capabilities. Choosing “Made in China” can fully utilize the efficiency and cost advantages of Chinese manufacturing.

Meanwhile, Xinjiao's choice of “assembled in Australia” not only effectively avoids barriers and tariff obstacles in international trade but also helps digest domestic excess capacity and promote technological innovation and international cooperation. The combination of the two further reduces product costs and significantly enhances market competitiveness.

Behind the Rush to Become the First RV Stock, Xinjiao's “Reds and Blacks”

In the long run, Xinjiao's rush to the Hong Kong Stock Exchange this time aims to seek development breakthroughs in the capital market and will have a profound impact on the entire Chinese RV industry. Moreover, if the listing is successful, Xinjiao will also set a benchmark for China's RV industry and promote the healthy development of the entire industry.

However, amidst the coexistence of opportunities and challenges, the RV market is also undergoing unprecedented changes, with various brands and types of RVs emerging endlessly, and competition becoming increasingly fierce.

If Xinjiao wants to set sail in overseas markets, the domestic market is undoubtedly an important starting point and proving ground. Although the domestic RV market appears prosperous, fierce competition and “involution” lie beneath the surface.

In China, where the RV culture is just taking off, there is not a significant difference in consumer perception between new and old brands. To compete for more market share, major RV brands have to continuously introduce new products, improve service quality, and accelerate technological iteration. This places extremely high demands on financial reserves and R&D capabilities. Therefore, upon entering the domestic market, Xinjiao will face a protracted and highly pressurized competition.

In contrast, the RV industry in European and American markets is more mature. Taking the United States as an example, its RV industry chain has formed a complete cluster, including manufacturing, sales, leasing, campground operation, and other links.

In addition, the United States also has complete RV supporting facilities, such as RV campgrounds and convenient water and power supply services throughout the country. In the US market, towed RVs dominate, benefiting from the high penetration rate of local towable vehicle models and the higher flexibility and cost-effectiveness of towed RVs.

Although Xinjiao has unique insights and advantages in the field of towed RVs, it still needs to face pressure from price competition when entering the US market.

Meanwhile, the European market, as one of the major global RV markets, has seen changes in people's travel concepts due to the impact of the pandemic in recent years, with a growing preference for RV travel, which combines privacy and safety. This does not fully align with some characteristics of towed RVs.

Therefore, if Xinjiao wants to occupy a place in the global RV market, it must face multiple challenges, including new model development, price competition, technological iteration, etc. The specific solutions to these challenges need to be continuously explored and improved in practice.

In 2024, with overseas markets as its starting point, Xinjiao has turned a new page. At this new juncture when the global RV market enters a period of comprehensive expansion, we eagerly await to see if Xinjiao can create its own “RV era.”

Source: Hong Kong Stock Research Society