Winny Pool Cleaner (望圆科技), a Tianjin-based firm making robotic pool cleaners, recently updated its prospectus in a bid to list on Shenzhen Stock Exchange, one of China’s three main bourses.
The company plans to raise 1 billion yuan (US$1.47 billion) from the share sale and use the proceeds to scale up production, build a R&D center and construct a global sale and distribution network.
According to the prospectus, Winny’s main business area includes the development, design, manufacturing and sale of pool-cleaning robots. The company is committed to revolutionizing the way swimming pools are traditionally cleaned in an “efficient, low-cost and smart manner.”
As one of China’s earliest companies to venture into the pool vacuum cleaner segment, Winny, founded in 2005, started out as an environmental technology firm and later switched to robotics, according to Tianyancha, a business registry information provider. It counts China Securities Capital and Addor Capital among its financial backers.
Winny stated in the prospectus that it sells its products in dozens of countries and regions across Europe, North America, Oceania and Asia. It has built “long-term, solid and stable” partnerships with major swimming pool brands such as Steinbach, Best Way and CF Group.
To date, Winny has 18 models in its product portfolio, and they cover a range of scenarios such as above-ground and in-ground pools. They come in wired, cordless and handheld versions and are adaptable to all working conditions, no matter the size, shape or texture of the pools, the company claims.
Technically, Winny has accumulated its technological strengths in areas such as lithium battery power, water-proof sealing, anti-tangle cord and obstacle detection and avoidance.
According to the prospectus, Winny posted revenue of 58.05 million yuan, 130.90 million yuan, 290.32 million yuan and 304.39 million yuan in 2019, 2020, 2021 and the first half of 2022, respectively, with a corresponding net profit of 14.78 million yuan, 45.45 million yuan, 97.31 million yuan and 115.10 million yuan.
The net profit attributable to the company’s shareholders after deduction of non-recurring gains and losses stood at 14.04 million yuan, 42.60 million yuan, 94.19 million yuan and 112.26 million yuan.
During the reporting period, Winny’s R&D spending amounted to 3.24 million yuan, 4.69 million yuan, 8.88 million yuan and 7.39 million yuan. It represents 5.58%, 3.58%, 3.06% and 2.43% of the company’s revenue.
The startup has 48 domestic patents and 10 overseas patents. It has also filed 84 patents, 35 of them for invention. These patents are concentrated in areas including vacuum cleaner, automatic cleaner, remote control, self-cleaning and power control box.
Across the world Winny faces competition from rivals such as BWT Holding GmbH, Aiper (元鼎智能) and Degrii.
The global robotic pool cleaner market grew at a CAGR of 16.24% from US$883 million in 2017 to US$1.61 billion in 2021 and is projected to balloon to US$3.53 billion in 2026, according to China Insights Consultancy, a market intelligence provider.
CIC’s research also indicated that Winny’s shipments account for 80.90% of the country’s total. In 2021, Winny shipped almost 14% of the world’s private pool vacuum cleaners, ranking third.
Hot waters
There are caveats though. Notably, the company operates an ODM model, meaning that it mainly manufactures for other brands, including its largest client Aiper.
During the reporting period, the ODM business was responsible for 85% of Winny’s overall income, with the remainder coming from its proprietary sub-brand Wybotics.
Investors are sure to notice a red flag as the company’s ODM revenue rose even further to 94.54% of its total in the first half of 2022.
This signals the possibility for the company to face a decline in orders when it goes head-to-head against its largest buyer — and rival Aiper.
Winny derived over 45% of its revenue from sale to Aiper and its associated parties in the first half of 2022.
In the prospectus, Winny admitted that currently it is vigorously developing its own brand and sales network. As it does, if it fails to lift its brand profile globally, it will face the risk of intensified market competition, higher operational difficulty and dwindling profit.
