KK Group Submits IPO Application to HKEX for the Fourth Time

On the evening of January 31, China chic retailer KK Group Company Holdings Limited (KK Group) updated its prospectus for its planned IPO in Hong Kong.

According to a Frost & Sullivan report, KK Group is one of the top three offline-driven non-grocery retailers in China's lifestyle consumer goods sector in terms of gross merchandise value (GMV) for 2022. As of the first ten months of 2023, KK Group's monthly average GMV per store saw strong growth of 43.4%, increasing dramatically from CNY 539,400 for the ten months ending October 31, 2022, to CNY 773,700 for the ten months ending October 31, 2023. KK Group owns four self-incubated retail brands, namely KKV, THE COLORIST, X11, and KK Guan.

The latest financial data illustrates that KK Group turned its loss into profit by the end of October 2023. For the first ten months of 2023, KK Group achieved revenue of CNY 4.77 billion, with a year-on-year growth of 55.5% remarkably, and a net profit of CNY 210 million, resulting in overall profitability. Adjusted net profit improved from a loss of CNY 250 million for the first ten months of 2022 to a profit of CNY 230 million, with an operating profit margin of 7.9%.

In terms of cash flow, as of October 31, 2023, KK Group had cash and cash equivalents of CNY 810 million, representing a growth of over 74% compared to the same period in 2022. Additionally, the net cash inflow from operating activities increased from CNY 220 million for the first ten months of 2022 to CNY 1.2 billion for October 2023, an increase of CNY 980 million.

As of January 23, 2024, KK Group operated a total of 800 stores, including 458 KKV stores, 243 THE COLORIST stores, 64 X11 stores, and 35 KK Guan stores, covering over 200 cities in 31 provinces in China. In addition, KK Group embarked on its overseas expansion in 2020, making its entry into the Indonesian market by opening 12 offline stores that span across 34 cities in Indonesia.

Since its establishment, KK Group has undergone 13 rounds of pre-IPO investments from institutional investors, including KKBrothers, eWTP, CMCKrypton, and Matrix. Prior to this prospectus update, KK Group had submitted IPO applications three times on November 4, 2021, January 20, 2023, and July 31, 2023, respectively.