New Stock Preview | With an annual revenue of 60.6 million euros VS strategic losses, how is the investment value of the bicycle brand TENWAYS, betted on by Hillhouse Capital and Tencent?

The bicycle brand TENWAYS, backed by Hillhouse Capital and Tencent, is about to go public on the Hong Kong stock market. On February 27, the Hong Kong Stock Exchange's official website revealed that the operating entity of the European-based electric assist bicycle (E-Bike) brand TENWAYS, Radvance Cayman Limited, has officially submitted its listing application to the Hong Kong Stock Exchange, planning to list on the main board of Hong Kong, with GF SEC as the sole sponsor. It is reported that the bicycle company was founded in 2021 and is mainly operated through Shenzhen Tenfeng Sports Technology Co., Ltd. The company is a Europe-centered, innovation-driven electric mobility company, focusing on providing electric assisted bicycle products to promote a healthy and sustainable lifestyle. Its products include a comprehensive range of electric assisted bicycles, including city, hybrid, and cargo models, as well as accessories and services. Although this bicycle brand is relatively unknown in China, it has gained quite a reputation in the capital market. According to GMTEight, since its establishment, TENWAYS has undergone five rounds of domestic financing through Shenzhen Tenfeng, attracting investments from renowned capital firms. In early 2021, Hillhouse Capital invested in the company, becoming one of its shareholders. In 2022, Shenzhen Tenfeng completed an A-round financing led by Tencent. Subsequently, in follow-up financing activities, the company has also introduced investments from well-known institutions such as Luweikaiteng, Black Ant Capital, Zhongding Capital, Huaying Capital, Alibaba, Luxshare Precision Industry, and Gaohu Capital. Looking at the equity structure, before the IPO, the founder of the company, Liang Xiaoling, controls 42.38% of the voting rights through direct ownership, voting rights proxy agreements, and concerted action arrangements. Hillhouse Capital holds 17.23% through SHCJ Holdings and 3.93% through BJCZ Holdings, totaling 21.17%, making it the largest external investor; Tencent holds 7.1% through Imagine Architecture Investment (Hong Kong) Limited; Luweikaiteng holds 6.47%, Alibaba holds 2.96%, and Black Ant Capital and Heyu hold 1.48% through BA HM Hong Kong. Is it really "the early bird catches the worm?" What is the investment value of TENWAYS favored by capital? A minimum of 14,500 yuan for a bike, with an annual revenue of 60.6 million euros In Europe, the bicycle brand TENWAYS not only sells well, but also commands a high price. According to the prospectus, TENWAYS' electric assist bicycle products meet a wide range of applications in various regions of Europe, including urban commuting, off-road adventures, home transportation, and cargo, with prices ranging from 1799 euros to 4999 euros, or approximately 14,500 to 40,000 yuan per bike. Even with a high price, TENWAYS has rapidly developed in the European market. According to Frost & Sullivan, since its establishment, TENWAYS has been the fastest-growing company in the European electric assist bicycle industry. Moreover, between 2022 and 2024, the company also became the fastest-growing brand in electric assist bicycle sales in the Benelux region. In terms of sales volume, the company ranked among the top five electric assist bicycle brands in the Benelux region by 2024. The rapid development of TENWAYS is also reflected in the growth of the company's revenue. From 2023 to 2024, the company's revenue increased from 48 million euros to 60.6 million euros, a year-on-year growth of 26.2%; in the first three quarters of 2025, revenue reached 54.2 million euros, a 3.1% increase from the same period in 2024. However, despite steady revenue growth, TENWAYS is still in a strategic loss position. From 2023 to September 2025, the company posted net losses of 4.653 million euros, 34.467 million euros, and 30.003 million euros, respectively. Fortunately, in the first three quarters of 2025, the company's adjusted net profit gradually turned positive, reaching 124.4 million euros, indicating an improvement in profitability. The gross profit margin also increased from 25.8% in 2023 to 30.4% in 2024, and further to 31.8% in the first three quarters of 2025. Looking at the overall operating situation of the company, the reason why TENWAYS is still in a strategic loss position is due to the high investment in channel expansion, brand marketing, research and development, overseas production capacity, and compliance costs to seize the European electric assist bicycle market. Additionally, the high dependence on the European single market and the incomplete coverage of fixed costs by economies of scale keep the company in an expansion phase of "exchange investment for growth." According to the prospectus, in the past few years, TENWAYS has continued to increase brand promotion and channel development in the European market, with sales expenses maintained at around 20% of revenue; research and development investment has also increased significantly, with a 41.7% year-on-year increase in research and development spending in 2024. In the future, as the company's brand effect accumulates and market share significantly increases, TENWAYS may transition from "scale first, profit later" to a balance between scale and profit, prioritizing achieving annual adjusted profits. With an extreme dependence on a single market, there are challenges and opportunities for TENWAYS An electric assist bicycle, also known as an electric pedal-assisted bicycle, refers to a bicycle equipped with an electric assist system that provides power support based on the rider's pedaling force and riding conditions, enhancing acceleration performance and overall riding efficiency. Due to its convenience, regulatory friendliness, and wide applicability, electric assist bicycles have become a major product category for urban commuting and recreational cycling. In terms of market size, driven by carbon neutrality policies, well-developed cycling facilities, and a deeply rooted cycling culture, Europe has become the largest E-Bike market globally and a perfect opportunity for TENWAYS. According to data from Frost & Sullivan, the sales volume of electric assist bicycles in Europe increased from approximately 10.6 billion euros in 2020 to around 15 billion euros in 2024, with a compound annual growth rate of 9.1%. With higher levels of supply chain localization, further improvements in regulatory frameworks, and continued maturity of the industry ecosystem, sales are expected to reach around 21.2 billion euros by 2029, with a compound annual growth rate of 7.2% from 2024 to 2029. However, it is important to note that the market landscape is highly fragmented, with intense competition, posing a significant challenge for TENWAYS. As disclosed in the prospectus, there are numerous players in the European market, and as of 2024, the top five companies collectively hold only 33.9% of the market share. This means that TENWAYS not only has to compete with traditional established European companies but also contend with many "compatriot" brands that have used Chinese supply chain advantages to expand overseas. In addition, TENWAYS faces the risk of extreme dependence on a single market. Based on its revenue structure, Europe is the core market for TENWAYS, with 97.7% of revenue coming from Europe in the first nine months of 2025, with the Benelux region contributing more than half of the revenue, becoming its largest source of income. This concentrated revenue structure makes the company vulnerable to economic fluctuations, policy changes (such as subsidy reductions), or trade barriers in that region. A diversification strategy or tapping into a "Plan B" could greatly mitigate this development risk. In response to this, TENWAYS stated in the prospectus that the proceeds from the Hong Kong IPO will be focused on product innovation and diversified product portfolio, global brand expansion, deepening sales and distribution networks, strengthening supply chain and production capacity, developing a multi-brand portfolio, upgrading digital information technology architecture, implementing AI for operational optimization, and supplementing working capital. Overall, the listing of TENWAYS provides investors with an opportunity to invest in a high-growth overseas consumer brand. However, risks and opportunities coexist. On the positive side, the company has proven its product definition and overseas market operating capabilities and is in a high growth phase. On the challenging side, ongoing investments may continue to suppress profits in the short term, and the timeline for achieving stable profitability is unclear. The high dependence on the European market makes it vulnerable to geopolitical and macroeconomic factors.