On March 28, Lianlian Digital (2598.HK) was officially listed on the main board of the Hong Kong Stock Exchange. On that day, the total market capitalization surpassed HK$10 billion.
As the first share in cross-border payments, it must be said that even digital listings have attracted a lot of attention. According to previous public information, during the public sale phase, the number even received 16.94 times the subscription, which shows that market investors have high recognition and confidence in the company's value.
In the current market environment, whether from the perspective of the industry or the development of digital itself, we can clearly see that it has a value growth logic of continuous development.
The company not only relies on a huge blue ocean of the industry, but also has a leading market position and outstanding core competitiveness. Furthermore, in the Hong Kong stock market, the company has two major value labels: scarcity and growth. With this listing, the company is also expected to open a new path of value growth.
1. Benchmark in the “Changpo Heavy Snow” circuit, the business logic is continuously verified
As a digital payment solution provider in China, Lianlian Digital focuses on providing comprehensive digital payment services and value-added services to global and Chinese customers, with the aim of empowering global trade activities and improving the efficiency of capital and information flow.
Connected Digital can help customers globally transfer funds obtained from sales of products and services back to China, and achieve quick and reliable payments through virtual accounts distributed by the company to customers under accounts endorsed by global commercial banks. At the same time, by providing a digital platform for enterprise customers, Lianlian Digital integrates payment information from various online and offline payment methods initiated by terminal buyers when purchasing products to help customers simplify their payment process and reduce operating costs.
Lianlian Digital has a leading edge in the industry. According to Frost & Sullivan data, based on TPV in 2022, Lianlian Digital is the largest independent digital payment solution provider in China, with a market share of 9.1%.
From an industry perspective, the leading advantage in the payment industry often means that the company has a broader customer base, a better technology platform, and stronger brand influence. These advantages enable it to better grasp market opportunities, continue to provide better services, and continuously strengthen its market position.
The core of being able to have this ambition stems from the continuous emergence of opportunities in the industry and the performance potential that the company continues to unleash.
Looking at the former, along with the rapid development of cross-border e-commerce in China, especially the wave of overseas travel emerging from all walks of life, it has brought huge opportunities to the cross-border payment industry.
According to customs statistics, in 2023, China's total cross-border e-commerce import and export volume was 2.38 trillion yuan, an increase of 15.6%. Among them, exports amounted to 1.83 trillion yuan, an increase of 19.6%. This data fully shows the strong growth momentum shown by the cross-border e-commerce industry. It is easy to anticipate that as more and more Chinese companies go abroad and carry out cross-border trade, their demand for efficient, convenient, and secure payment solutions will also experience a blowout, which provides huge market opportunities for leading payment companies such as Lianlian Digital.
Judging from the latter, the firm motivation for the company to compete in the industry also lies in the performance potential that the company continues to unleash.
As far as revenue is concerned, even digital revenue has shown a continuous upward trend over the past few years. It grew from 589 million yuan in 2020 to 1,028 million yuan in 2023, which shows the continuous expansion of the company's business and the gradual increase in market share.
The gross profit level also showed a similar upward trend, from 378 million yuan in 2020 to 577 million yuan in 2023. This series of good financial data not only proves the company's competitive advantage in the field of digital payments, but also reflects its good market adaptability and strategic execution ability. The company has successfully completed its business model and demonstrated strong monetization potential.
Further comprehensively considering factors such as the continued growing demand of the cross-border payment market, the company's steady business model, leading market position, and continuous technological innovation and service improvement, it can be said that Lianlian Digital is on an advantageous circuit with the characteristics of “long slopes and heavy snow”, and has outstanding competitiveness, showing good development prospects and potential.
In the future, by continuously expanding the scale of revenue and improving profitability, even numbers have clearly drawn the company's steady and upward growth attitude and growth expectations that investors can clearly see, which undoubtedly also brings great appeal to market capital.
2. The listing faces a good window period, and value potential is expected to continue to be unleashed
Currently, it can be said that a good listing window provides a rare opportunity for continuous digital value release.
On the one hand, Hong Kong stocks have been undervalued for a long time. There is limited room for further downside, and the cost performance ratio of medium- to long-term allocations is prominent. In particular, judging from the Hang Seng Technology Index, under low valuations, along with the restoration of the performance of leading Internet companies and leading technology manufacturing companies, and the pursuit and even hype of the Internet and technology concepts under the AI wave, expectations for a rebound in the sector are strong, and sentiment is heating up day by day.
For connected numbers, which have both Internet and technological attributes, the company is expected to gain beta opportunities from the market as the sector heats up, and at the same time gain more attention and recognition with its unique market label.
On the other hand, as the first company to go public in the industry, the company is expected to use capital to accelerate development and enjoy leading advantages and scale effects.
According to the company's current fund-raising use, it plans to use about 60% of the proceeds raised to improve the company's technical capabilities within the next five years; about 30% will be used to expand the company's global business operations within the next five years; about 5% will be used for future strategic investments and acquisitions within the next five years to enrich the company's services and products, enhance the company's technical capabilities, and strengthen the company's international business; and about 5% is expected to be used for general corporate purposes and working capital requirements.
It is easy to see that the company has a clear development direction and layout. Considering the current background where competition in the entire industry continues to accelerate and become increasingly divided, the successful listing not only guarantees it to further consolidate operations and improve service quality, but also brings more expectations for the company to accelerate business development and enhance its brand influence and global market share in the future.
Based on this, in the future, the company will continue to reap market dividends under the scale effect and leading edge, showing considerable performance growth and value improvement, which will also be a probable event.
3. Conclusion
In summary, the continuous digital listing of Hong Kong stocks marks a further consolidation of its leading position and is expected to accelerate its value growth in the field of cross-border payments.
Looking forward to the future, as the company continues to improve its technical capabilities, expand its global business, and make strategic investments and acquisitions, its future development potential is expected to enter the fast track of accelerated release, which is worth looking forward to.