Core Viewpoint - Boche Holding Limited (博车网) is preparing for an IPO in Hong Kong, positioning itself as the largest accident vehicle auction platform in China, with significant revenue growth potential despite recent losses [3][4][20]. Market Overview - China is the largest automotive market globally, with projected sales exceeding 31 million vehicles in 2024 and a vehicle ownership exceeding 300 million [1]. - The accident vehicle auction market in China is experiencing growth, with the auction volume reaching 345,000 vehicles in 2023 and expected to grow to 867,000 vehicles by 2028, representing a compound annual growth rate (CAGR) of 20.2% from 2023 to 2028 [18]. Company Background - Founded in 2014 by Chen Jianpeng, 博车网 has developed a robust business model that includes accident vehicle auctions and partnerships with major automotive manufacturers [5]. - The company has a market share of approximately 31.3% in the accident vehicle auction industry in China [6]. Financial Performance - 博车网 reported revenues of 388.1 million RMB in 2022, 518.3 million RMB in 2023, and 403.9 million RMB in the first nine months of 2024, with net losses of 180 million RMB, 121 million RMB, and a small profit of 1.425 million RMB respectively [20]. - The company's gross margin fluctuated, with rates of approximately 44.4%, 49.9%, and 47.3% during the reporting periods, influenced by operational efficiency and sales economics [21]. Revenue Sources - The majority of 博车网's revenue comes from accident vehicle auctions and related services, accounting for over 50% of total revenue, while used vehicle auctions contribute around 20% [11]. - The company also engages in vehicle dealership activities, with revenue from this segment rising to 20.6% in the first nine months of 2024 [12]. Business Model and Dependencies - 博车网 connects various upstream sources of accident vehicles, including insurance companies and rental firms, to downstream buyers such as repair shops and dismantling companies [10]. - The company relies heavily on a few key upstream sources, with 71.4%, 63.4%, and 58% of auctioned accident vehicles coming from three major suppliers during the reporting periods [14]. Industry Challenges - The increasing availability of new vehicles at lower prices may negatively impact the demand for accident and used vehicles, as consumers may prefer purchasing new cars [22][23]. - The competitive landscape remains intense, with potential threats from upstream suppliers establishing their own auction platforms [14][23].