On May 31st, China's largest marketing and sales SaaS solution provider, Maifushi (02556.HK), saw a significant surge in its stock price, which once soared by 23.95% during the trading day, reaching a record high of HKD 82.80 per share since its listing. By the end of the trading day, the stock closed with a 19.76% increase, at HKD 80.00 per share.
Since its debut on the Hong Kong Stock Exchange on May 16th, Maifushi's stock price has been on an upward trajectory. Compared to the initial public offering price of HKD 43.60 per share, the current stock price has accumulated an increase of 83.49%.
Information indicates that Maifushi is a Chinese provider of marketing and sales SaaS solutions, primarily offering such solutions through the Marketingforce platform. The company serves enterprises of various sizes with diverse needs, covering content and experience, advertising and promotion, social and relationships, sales and delight, data and analytics, to strategy and management. By revenue in 2022, Maifushi is the largest provider of marketing and sales SaaS solutions in China, holding a market share of 2.6%.
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From a product and service perspective, Maifushi mainly provides SaaS solutions to its clients through its SaaS business (core SaaS products include T Cloud and Zhenke) and precision marketing services (online advertising solution services and online advertising distribution services). By 2023, the SaaS business has replaced precision marketing services as the company's main revenue source, with its proportion increasing to 57%.
Looking at the development prospects, the market for marketing and sales SaaS solutions in which Maifushi operates is a niche yet promising sector.
As is well-known, China is a country with a vast consumer market. With consumer demands becoming increasingly personalized and diversified, how to accurately grasp consumer needs and provide highly customized products and services has become the primary challenge for businesses. The investment in marketing and sales by enterprises continues to rise.
In this context, the market demand for the more flexible and cost-effective SaaS (Software as a Service) model has been growing continuously compared to the traditional software deployment model. Coupled with the wave of digital transformation, the capabilities of domestic software manufacturers are also continuously strengthening, with more and more enterprises willing to pay for high-quality, high-value SaaS services.
According to a Frost & Sullivan report, the potential market size of China's marketing and sales SaaS solution market is expected to maintain a compound annual growth rate of over 29%, reaching 74.5 billion yuan by 2027. As the "leader" in this field, Maifushi's growth prospects are widely看好 by the market.
However, it is essential to recognize clearly that, affected by high customer acquisition costs and the downward pressure of the macroeconomy, among other unfavorable factors, the domestic SaaS industry has generally fallen into a loss-making predicament. Even Maifushi, which has significant influence in the industry, has not been able to escape the embarrassing situation of losses.From an overall revenue perspective, in the years 2021, 2022, and 2023, Mai Fushi respectively achieved revenues of approximately 877 million yuan, 1.143 billion yuan, and 1.232 billion yuan. During the same period, the annual losses were approximately 273 million yuan, 216 million yuan, and 169 million yuan, respectively, with a total combined loss of about 658 million yuan over the three years.
The main reason for this is that Mai Fushi incurred substantial R&D expenses, administrative expenses, and sales and distribution expenses during the rapid expansion of its SaaS business. Particularly, the high costs associated with marketing and sales have been increasing year by year, putting significant pressure on the company's profitability.
In recent years, Mai Fushi has primarily focused on the Douyin platform, achieving brand exposure and sales growth by purchasing user traffic and precisely targeting advertisements. Financial reports indicate that in Mai Fushi's cost structure for sales, the cost of advertising traffic accounts for a very large proportion, consistently above 80%.
Furthermore, according to Mai Fushi's plans, under the wave of AI technology, the company will also allocate a significant portion of its funds to the SaaS products and services of the Marketingforce platform, as well as to the optimization of AI artificial intelligence technology, thereby further enhancing its market competitiveness. This will undoubtedly lead to higher cost investments for Mai Fushi and also poses challenges for the company's profitability.
In response, some industry insiders have expressed that in the future, Mai Fushi needs to re-examine its sales strategies and cost structure to find ways to reduce costs in order to achieve steady growth in profitability.
Regarding the recent frequent abnormal fluctuations in Mai Fushi's stock price, some investors have pointed out that this may be related to the unique attributes of newly listed stocks. Generally, newly listed stocks have a relatively small number of circulating shares, and both trading volume and turnover rate remain at a low level. As of the close on May 31, 2024, Mai Fushi's trading volume was only 346,100, with a transaction value of 27.039 million yuan, and the turnover rate was also only 0.15%.