Core Viewpoint - The company "Berkhi" is preparing for an IPO on the Hong Kong Stock Exchange, having sold 3.8 million jackets in three years, and is positioned as a "substitute" for high-end outdoor brands like Arc'teryx [2][11]. Company Overview - Berkhi Outdoor Sports Group submitted its prospectus for a main board listing on April 28, with CICC and CITIC Securities as joint sponsors [2]. - The company has experienced rapid revenue growth, with revenues of 378 million RMB, 908 million RMB, and 1.766 billion RMB from 2022 to 2024, representing a compound annual growth rate (CAGR) of 115.86% [5][16]. - Berkhi's net profit for the same period was 27.6 million RMB, 156 million RMB, and 304 million RMB [5]. Market Position - Berkhi ranked third in total GMV among outdoor brands during the 2024 Tmall Double Eleven shopping festival [2]. - The high-performance outdoor apparel market in mainland China is expected to grow at a CAGR of 13.8% from 2019 to 2024, reaching 215.8 billion RMB by 2029 [6]. - Berkhi holds a 3.9% market share in the top ten outdoor jacket brands in mainland China, ranking seventh [12]. Sales and Distribution - The company relies heavily on online sales, with nearly 80% of revenue coming from e-commerce platforms like Tmall and Douyin [7]. - In 2024, Berkhi's online direct-to-consumer (DTC) sales reached 1.351 billion RMB, with Tmall contributing 518 million RMB and Douyin 323 million RMB [7]. - The company has only 146 retail stores in mainland China, with only 14 being directly operated [7]. Financials and Marketing - Berkhi's marketing expenses have been significant, with sales and distribution costs rising from 120 million RMB in 2022 to 587 million RMB in 2024, accounting for 31.8% to 33.2% of total revenue [8]. - The company's R&D expenses were low, at less than 2% of total revenue, with 2024 R&D expenses at 31.5 million RMB [10]. Product Strategy - Berkhi's main product line is the classic series, which accounts for over 80% of its revenue, with a total of approximately 3.8 million jackets sold [14]. - The company introduced the street-style footwear brand Excelsior in 2020, but it has not significantly contributed to revenue, accounting for only 1.9% in 2024 [14]. Brand Controversies - The brand name "Berkhi" has faced controversy due to its association with a historical figure accused of stealing cultural artifacts, which could pose a risk to its brand image [17][18]. - There are consumer concerns regarding product quality based on production location, with some preferring products made in Anhui over those made in Beijing [20].