Core Viewpoint - Lexin Outdoor International Limited is attempting a second IPO after a failed initial attempt, highlighting the company's struggle to transition from an OEM/ODM model to a brand-driven approach amid declining revenues and profits due to post-pandemic market conditions [1][8]. Financial Performance - The company has experienced a decline in revenue for three consecutive years, with figures of 818 million, 463 million, and 573 million yuan from 2022 to 2024, resulting in a compound annual growth rate of -16.29% [2][3]. - Net profit has decreased from 114 million yuan to 59 million yuan, nearly halving during the same period [2][3]. - Despite a 27.8% year-on-year revenue growth in the first four months of 2025, overall performance has not yet returned to pre-pandemic levels [2]. Market Dynamics - The decline in performance is attributed to a post-pandemic drop in consumer demand, particularly for fishing gear, which saw a surge during the pandemic due to its low social interaction nature [2][5]. - Actual production volume fell from 7.933 million units in 2022 to 4.168 million units in 2024, with factory utilization rates dropping from 95% to 83.4% [2][3]. Business Model Challenges - The company relies heavily on OEM/ODM business, with over 90% of revenue coming from this segment, and the top five customers contributing nearly 60% of total revenue [3][4]. - A significant drop in revenue from the North American market, from 18.8% to 3.4%, exposes vulnerabilities to regional market fluctuations [3]. - High accounts receivable, with the top five customers accounting for 76.7% of trade receivables, negatively impacts cash flow efficiency [3]. Strategic Concerns - The company distributed 65 million yuan in cash dividends to its controlling shareholder, raising concerns about cash flow and funding adequacy ahead of the IPO [4]. - The brand transformation has been slow, with the OBM business accounting for less than 10% of total revenue despite an acquisition aimed at enhancing brand presence [5][6]. Inventory and Supply Chain Issues - The company holds 106 million yuan in inventory, representing 37.06% of total assets, which poses risks of capital lockup and potential impairment in a fast-evolving market [6]. IPO and Future Prospects - The updated prospectus indicates that IPO proceeds will focus on brand expansion, global innovation center development, and smart production upgrades [7]. - The dual-track brand strategy aims to enhance the Solar brand for the European market while developing new brands for the Asia-Pacific region [7]. - Potential industry acquisitions could reshape the global market landscape, addressing current product limitations and expanding into core fishing equipment categories [7]. Industry Implications - The challenges faced by Lexin Outdoor reflect broader issues within the Chinese manufacturing sector, particularly the limitations of the OEM model and the need for transformation towards brand-driven operations [8].