Pony group inc analysis
Services offered include carpooling, airport pick-ups and drop-offs, and personal driver services. The company was started in 2016 through Pony Limousine Services Ltd in Hong Kong. Pony Group Inc. was formed as an offshore entity in January 2019 to facilitate offshore financing. In March 2019 the company acquired 100% equity interest (IPO, page 31). The last strength of the company is flexibility and convenience. Services offered include airport shuttles and the company has ensured the fleet contains enough seats and a larger capacity to accommodate all the customers' needs (IPO, page 32). Strategy One of the strategies of Pony Group Inc. is that it aims at growing their customer base. To the company, this is an opportunity that the company needs to focus on by making investments in brand and growth marketing.
They use platforms such as WeChat, email, Tencent QQ and phone calls among others. They have built up long-term relationships such as focusing on users experiencing and developing solutions that are simple, elegant and intuitive to their customers (IPO, page 32). The company has also partnered with other fleet companies which have shown a positive growth of the company. Environment Competition- This is an area that is intense and evolving in the car service industry. The primary competitors of Pony Group Inc. is a small company but with strategies put in place, it is growing in a positive direction which is a good sign. The company has a competitive advantage over its competitors through the partnership they have with third-party companies where they do not need to have many fleet to achieve their profits.
They just connect the customers and drivers and they are good to go. The way they handle their customers is also a strategy to ensure that they stick around have the best experience. The strategic plan has an advantage to the Group because it provides the company with directions and goals. We completed 400 orders in 2017 and 460 in 2018 and generated $2,805 and $3,229 in 2017 and 2018, respectively, representing a 15% growth rate. As of the date of this prospectus, we partnered with five car fleet companies with more than 50 vehicles in service. Corporate History and Structure We commenced our car service business in April 2016 through Pony Limousine Services Limited in Hong Kong (“Pony HK”). On January 7, 2019, we formed our offshore entity, Pony Group Inc. to facilitate offshore financing.
HKTB estimates that about 61% of the mainland travelers are day trippers who normally rely on ground transportations such as railways or cars. Additionally, the Hong Kong-Zhuhai-Macau bridge and the express rail link to Guangzhou help position Hong Kong as a gateway for foreign visitors wishing to visit the mainland. As a company that provides car services between mainland and Hong Kong, we believe we can leverage our expertise and experience in this industry to be at the forefront of and capitalize on such opportunities. 31 Our Strengths The competitive strengths of our service is our high quality car fleets that we utilize, outstanding user experience, flexibility and convenience. Together, these elements differentiate us from others. We see significant opportunity to continue to grow our customer base.
We intend to drive organic adoption in our customer base by continuing to make investments in our brand and growth marketing to increase consumer awareness. We plan to expand our service coverage beyond the geographies and markets we currently serve. We also believe we will benefit from demographic trends, such as the growing percentage of Chinese people traveling overseas and international visitors traveling into China. ● Increase our use cases. We care deeply about our customers and work to build long-term relationships with them by: ● developing simple, elegant and intuitive solutions; and ● focusing intensely on the user experience; We believe this approach fuels our word-of-mouth referrals and reinforces our community’s desire to use Pony over alternatives. Our revenue continues to grow with amount of orders increasing 15% in 2018 compared to 2017.
32 Sales and Marketing We market our services to users directly through word-of-mouth referrals, brand advertising. We plan to attract consumers and promote offerings on our “Let’s Go” application through sponsored events, social networking sites including Facebook, Twitter and Instagram and other similar initiatives Seasonality Our current operations experience seasonality. We see high demands of our services during the golden weeks in China which was intended to help expand the domestic tourism market. However, many of our competitors and potential competitors are larger and have greater brand name recognition, longer operating histories, larger marketing budgets and established marketing relationships, access to larger customer bases and significantly greater resources for the development of their offerings. For additional information about the risks to our business related to competition, see the section titled “Risk Factors— We face intense competition and could lose market share to our competitors, which could adversely affect our business, financial condition and results of operations.
” Employees As of the date of this prospectus, we have a total of 3 full-time employees and 2 part-time employees working for customer services. The following table sets forth the number of our employees categorized by function as of that date: Function Total Number of Employees Technology & Product Development 2 Human Resource & Administration 1 Customer Services 2 Total 5 33 Facilities We lease an office at Engineer Experiment Building, A202, 7 Gaoxin South Avenue, Nanshan District, Shenzhen, Guangdong Province, China, encompassing approximately 205 square meters of space for a monthly rent of RMB 25,808. 58 (approximately $3,700). Any industry not listed in the Catalog or any encouraged foreign invested industry listed in the Catalog is a permitted industry. Some restricted industries are limited to equity or contractual joint ventures, while in some cases Chinese partners are required to hold the majority interests in such joint ventures.
Foreign investors are not allowed to invest in industries within the prohibited category. Industries not listed in the Catalogue are generally open to foreign investment unless specifically restricted by other PRC regulations. In June 2018, the MOFCOM and the NDRC promulgated the Special Administrative Measures (Negative List) for the Access of Foreign Investment, or the Negative List, effective in July 2018. The Measures provided detail instructions for foreign-invested enterprise to carry out record filing in terms of the change of the enterprise in China. The M&A Rules The Provisions Regarding Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, or the M&A Rules, was jointly promulgated by MOFCOM, China Securities Regulatory Commission, or CSRC, the State-owned Assets Supervision and Administration Commission of the State Council, State Administration of Taxation, State Administration of Industry and Commerce and State Administration of Foreign Exchange, or SAFE, on August 8, 2006 and became effective as of September 8, 2006, and were later amended on June 22, 2009.
This M&A Rules governs among other things, the purchase and subscription by foreign investors of equity interests in a domestic enterprise, and the purchase and operation by foreign investors of the assets and business of a domestic enterprise. An offshore special purpose vehicle, or SPV, is defined under the M&A Rules as an offshore entity directly or indirectly controlled by Chinese individuals or enterprises for the purpose of an overseas listing, and the main assets of which are the rights and interests in affiliated domestic enterprises. Under the M&A Rules, if a SPV intends to merge with or acquire any domestic enterprise affiliated from the Chinese individuals or enterprises that control the SPV, such proposed merger or acquisition shall be submitted to the MOFCOM for approval.
Except under certain specific circumstances provided by law, any third party user must obtain consent or a proper license from the patent owner to use the patent, otherwise the use will constitute an infringement of the rights of the patent holder. Domain Name On November 5, 2004, the MIIT promulgated the Measures for Administration of Domain Names for the Chinese Internet, or the Domain Name Measures. According to the Domain Name Measures, “domain name” shall refer to the character identifier for identifying and locating the hierarchical structure of a computer on the Internet, which corresponds to the Internet protocol (IP) address of the computer concerned. A domain name registration service shall observe the principle of “first apply, first register”. Where the domain name is completed, the applicant for the domain name registration shall be the holder of the domain name.
In the event that a PRC shareholder holding interests in a special purpose vehicle fails to fulfill the required SAFE registration, the PRC subsidiaries of that special purpose vehicle may be prohibited from distributing profits to the offshore parent and from carrying out subsequent cross-border foreign exchange activities. Further, the special purpose vehicle may be restricted in its ability to contribute additional capital into its PRC subsidiary. Regulations Relating to Dividend Distribution The principal laws and regulations regulating the distribution of dividends by FIEs in the PRC include the Company Law of the PRC, as amended in 1999, 2004, 2005, 2013 and 2018, the Wholly Foreign-owned Enterprise Law of the PRC promulgated in 1986 and last amended in 2016 and its implementation regulations promulgated in 1990 and subsequently amended in 2001 and 2014, the Equity Joint Venture Law of the PRC promulgated in 1979 and last amended in 2016 and its implementation regulations promulgated in 1983 and last amended in 2014, and the Cooperative Joint Venture Law of the PRC promulgated in 1988 and last amended in 2017 and its implementation regulations promulgated in 1995 and last amended in 2017.
Under the current regulatory regime in the PRC, FIEs in the PRC may pay dividends only out of their accumulated profit, if any, determined in accordance with PRC accounting standards and regulations. Except otherwise provided by the laws regarding foreign investment, a PRC company is required to set aside at least 10% of its after-tax profit as general reserves until the cumulative amount of such reserves reaches 50% of the company’s registered capital. 37 According to the Social Insurance Law of China effective from July 1, 2011, and the Housing Fund Regulation which was amended and became effective on March 24, 2002, employers in China shall pay contributions to the social insurance plan and the housing fund plan for their employees, and such contribution amount payable shall be calculated based on the employee actual salary in accordance with the relevant regulations.
Regulations on Tax PRC Enterprise Income Tax Law On March 16, 2007, the National People’s Congress promulgated the Law of the PRC on Enterprise Income Tax, which was amended on February 24, 2017 and December 29, 2018, and on December 6, 2007, the State Council of the PRC enacted The Regulations for the Implementation of the Law on Enterprise Income Tax, or collectively, the EIT Law. According to the EIT Law, taxpayers consist of resident enterprises and non-resident enterprises. Resident enterprises are defined as enterprises that are established in China in accordance with PRC laws, or that are established in accordance with the laws of foreign countries but whose “de facto management body” is located in the PRC. Non-resident enterprises are defined as enterprises that are set up in accordance with the laws of foreign countries and whose de facto management body is located outside the PRC, but have either established institutions or premises in the PRC or have income generated from inside the PRC.
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