China’s SaaS service provider: Hongqiao Hi-Tech Powerbridge Technologies Co. (PBTS)

Powerbridge Technologies Co., Ltd. (NASDAQ:PBTS) was founded in 1997 and is headquartered in Zhuhai City, Guangdong Province, China. It has 299 full-time employees (3/12/2019). It is a Chinese company Suppliers of software applications and technical solutions and services to government customers. As of March 2019, there are more than 1,600 customers.

Powerbridge Technologies

Hongqiao High-tech Powerbridge Technologies Co. (PBTS):

Hongqiao Hi-Tech is a software application and technical solution service provider serving Chinese customers. The company is positioned to become a professional information technology company that promotes the globalization of China’s economy and trade, and a leader in the professional field of China’s international trade information technology. Professional system solutions, professional SaaS services and blockchain services (BaaS).

Hongqiao Hi-Tech Co., Ltd. was founded in October 1997 with a registered capital of HK$43 million. Its headquarter is located in Zhuhai Southern Software Park, a national software industry base, and has software R&D centers in Zhuhai and Beijing. The company currently has 10 full-featured, localized service branches in China.

Hongqiao Hi-Tech mainly serves five major customer groups : government, customs, enterprises, port institutions (such as local electronic ports, park management committees, etc.), industrial organizations (such as customs brokers, logistics companies, agency companies, professional service companies, financial insurance Institutions, etc.). At present, the company has more than 1,600 existing customers. As of June 30, 2018, the company had 257 international trading enterprise and manufacturer customers, 67 government customers, and 415 logistics and other service customers.

Since international trade involves complicated and cumbersome procedures, the processing of massive documents, and cross-organizational collaboration and multi-party participation, this virtually increases the cost of international trade and drags down efficiency. Hongqiao Hi-Tech has been deeply involved in the field of international trade informatization and solutions for 21 years, providing international trade, international logistics, supply chain informatization and other services to enterprises and government agencies engaged in international trade, making the international trade business of enterprises more convenient and reducing the burden , Reduce costs and increase efficiency.

Hongqiao Hi-Tech Business:

1. Professional system solutions

Solutions include: smart ports, smart parks, smart customs, integrated international trade service platforms, transnational industrial chains/supply chains, regional open economic development solutions, trade compliance solutions, import/export credit and insurance solutions, etc.

2. Professional SaaS service

The company’s professional SaaS service launched in 2016, using software-as-a-service cloud technology and applications, can be used by users anytime and anywhere on demand, realizing international trade interconnection, making trade, customs clearance, and logistics operations easier and more convenient. Convenient and more efficient, the service series include Canada Trade Customs Cloud, Express Mail Clearance Cloud, Cross-border Customs Clearance Cloud, Bonded Area Cloud, Electronic Freight Cloud, Ocean Manifest Cloud, etc.

At present, the company has 76 independently developed software copyright technical achievements and 28 patents. In response to industry characteristics and professional needs, research and development of the “Hongqiao Technology Application Development Platform” based on advanced technologies such as blockchain, big data, artificial intelligence, cloud computing, Internet of Things, and mobile Internet.

3. Blockchain service (BaaS)

The company is developing blockchain services (BaaS), allowing all participants in the international trade ecosystem to work together in an unprecedented way, promoting a comprehensive perspective of the international trade supply chain, achieving synchronization and sharing of information, optimizing resource allocation and improving operational efficiency. The block chain service series include customs clearance block chain, trade block chain, trade block chain, cross-border block chain, supply chain block chain, trade financial technology service, etc. This service will be launched to designated customers in the first quarter of 2019.

According to the official website, the company also provides comprehensive information services to effectively help enterprises, governments, customs, ports, and industrial customers optimize international trade business processes, improve local open business environments, enhance customs supervision efficiency, and enhance port operation efficiency Enhance industrial service capabilities. And big data services, including data collection, processing and analysis related to international trade, realizing global real-time data display, and providing various professional services based on data.

Hongqiao Hi-Tech Prospectus:

  • In fiscal year 2016, fiscal year 2017, and the first six months of fiscal year 2018, the company achieved revenue of US$21.2 million, US$21.6 million, and US$7.9 million, respectively. Net profit in the same period reached 3.5 million US dollars, 4 million US dollars, and 1.3 million US dollars.
  • Among them, software R&D service fees contributed most of the revenue, generating 90.4%, 89.5%, and 81.1% of revenue in fiscal year 2016, fiscal year 2017, and the first six months of fiscal year 2018, respectively. In the same period, the revenue of consulting and technical support services accounted for 5.2%, 6.6% and 14.8% respectively. SaaS subscription services contributed 4.4%, 3.9%, and 4.1% of revenue respectively.
  • In fiscal year 2017, two government customers contributed 17.2% and 13.1% of the company’s revenue respectively. As of June 30, 2018, only one government customer had generated 16.7% of the company’s revenue.
  • The company expects its revenue in fiscal year 2018 to increase by 10.2% year-on-year to US$23.8 million, thanks to the revenue growth of its three main businesses. Net profit will fall by 57.5% year-on-year to US$1.7 million, due to the substantial increase in operating costs in 2018. The cost increase is related to the increase in audit fees and labor costs. As of June 30, 2018, the company has received 8.1 million US dollars (53%) of accounts receivable balance.
  • Risk warning : In the field of software and technical services, there are many players-there are Baozun e-commerce (BZUN) that focuses on e-commerce full-link one-stop business solutions in China, as well as micro-mall, smart retail, and catering o2o for small and medium-sized enterprises Weimeng (stock code: 2013.HK), which has integrated solutions such as, applets, etc. There are also Canadian e-commerce software developers Shopify (SHOP) , which specializes in providing SaaS services for cross-border e-commerce companies , and Salesforce , Microsoft , Amazon SaaS service leader led by giants such as , Oracle and other giants.

Hongqiao High-tech Powerbridge Technologies Co. (PBTS) investment:

Zhuhai Hongqiao High-Technology Co., Ltd. Powerbridge Technologies Co., Ltd. (NASDAQ:PBTS) submitted the prospectus on 1/4/2019, and plans to be listed on NASDAQ on 4/2/2019 IPO, the issue price is 5.0 US dollars, the issuance of 2,181,818 Stocks, raised 11 million US dollars, underwritten by Maxim Group/ The Benchmark Company.

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