United States securities and exchange commission logo
October 18, 2022
Xiaogang Geng
Chief Executive Officer
Jayud Global Logistics Ltd
4th Floor, Building 4, Shatoujiao Free Trade Zone
Shenyan Road, Yantian District
Shenzhen, China 518000
Re: Jayud Global
Logistics Ltd
Draft Registration
Statement on Form F-1
Submitted September
21, 2022
CIK No. 0001938186
Dear Xiaogang Geng:
We have reviewed your draft registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so
we may better
understand your disclosure.
Please respond to this letter by providing the requested
information and either submitting
an amended draft registration statement or publicly filing your
registration statement on
EDGAR. If you do not believe our comments apply to your facts and
circumstances or do not
believe an amendment is appropriate, please tell us why in your
response.
After reviewing the information you provide in response to these
comments and your
amended draft registration statement or filed registration statement, we
may have additional
comments.
Draft Registration Statement on Form F-1
Cover Page
1. Clearly disclose how
you will refer to the holding company and subsidiaries when
providing the
disclosure throughout the document so that it is clear to investors which
entity the disclosure
is referencing and which subsidiaries or entities are conducting the
business operations.
Refrain from using terms such as we or our when describing
activities or functions
of a subsidiary.
Xiaogang Geng
FirstName LastNameXiaogang Geng
Jayud Global Logistics Ltd
Comapany
October 18,NameJayud
2022 Global Logistics Ltd
October
Page 2 18, 2022 Page 2
FirstName LastName
2. Update your disclosure to reflect that the Commission adopted rules to
implement the
HFCAA and that, the final rules adopted by the Commission relating to
the HFCA Act
became effective on January 10, 2022. Also update the related risk
factor accordingly.
3. Please revise to clarify whether the company is subject to the Holding
Foreign Companies
Accountable Act and related regulations.
4. Please revise to also address how recent statements and regulatory
actions by China s
government relating to data security or anti-monopoly concerns has or
may impact the
company s ability to conduct its business, accept foreign
investments, or list on an U.S. or
other foreign exchange.
Prospectus Summary, page 1
5. We note your definition of "China or the PRC, referring to
the People s Republic of
China, excludes Taiwan and the special administrative regions of Hong
Kong and Macau.
Please revise your disclosure throughout to clarify that the legal and
operational risks
associated with operating in China also apply to your operations in
Hong Kong. For
instance, clarify that the PRC government has significant authority to
intervene or
influence your Hong Kong subsidiary at any time, which could result in
a material adverse
change to your business, prospects, financial condition, and results
of operations, and the
value of your securities. In addition, discuss any commensurate laws
and regulations in
Hong Kong, where applicable throughout the prospectus, and the risks
and consequences
to you associated with those laws and regulations. As an example, if
certain of your
directors are located in Hong Kong, expand your disclosure related to
the enforceability of
civil liabilities to address Hong Kong. Additionally, we note that
Jayud Global Logistics
Limited holds all of the equity interests in its PRC subsidiaries
through the subsidiary
incorporated in Hong Kong.
Risks Related to Doing Business in China, page 12
6. In your summary of risk factors, describe the significant regulatory,
liquidity, and
enforcement risks with cross-references to the more detailed
discussion of these risks in
the prospectus. For example, specifically discuss risks arising from
the legal system in
China, including risks and uncertainties regarding the enforcement of
laws and that rules
and regulations in China can change quickly with little advance
notice; and the risk that
the Chinese government may intervene or influence your operations at
any time, or may
exert more control over offerings conducted overseas and/or foreign
investment in China-
based issuers, which could result in a material change in your
operations and/or the value
of the securities you are registering for sale. Acknowledge any risks
that any actions by
the Chinese government to exert more oversight and control over
offerings that are
conducted overseas and/or foreign investment in China-based issuers
could significantly
limit or completely hinder your ability to offer or continue to offer
securities to investors
and cause the value of such securities to significantly decline or be
worthless.
Xiaogang Geng
FirstName LastNameXiaogang Geng
Jayud Global Logistics Ltd
Comapany
October 18,NameJayud
2022 Global Logistics Ltd
October
Page 3 18, 2022 Page 3
FirstName LastName
Risk Factors, page 17
7. Given the Chinese government s significant oversight and discretion
over the conduct of
your business, please revise to highlight separately the risk that the
Chinese government
may intervene or influence your operations at any time, which could
result in a material
change in your operations and/or the value of the securities you are
registering. Also,
given recent statements by the Chinese government indicating an intent
to exert more
oversight and control over offerings that are conducted overseas
and/or foreign investment
in China-based issuers, acknowledge the risk that any such action
could significantly limit
or completely hinder your ability to offer or continue to offer
securities to investors and
cause the value of such securities to significantly decline or be
worthless.
8. Disclose each permission or approval that you or your subsidiaries are
required to obtain
from Chinese authorities to operate your business and to offer the
securities being
registered to foreign investors. Please also describe the consequences
to you and your
investors if you, or your subsidiaries: (i) do not receive or maintain
such permissions or
approvals, (ii) inadvertently conclude that such permissions or
approvals are not required,
or (iii) applicable laws, regulations, or interpretations change and
you are required to
obtain such permissions or approvals in the future.
Use of Proceeds, page 61
9. We note your disclosures here that you intend on using "approximately
20% of the net
proceeds from this offering for leasing or purchasing warehouses that
have strategic
importance to our business operation on a long-term basis" and
"approximately 20% of
the net proceeds from this offering for adding new chartered services
in key trade lines in
the future." Expand your disclosure to describe the "warehouses that
have strategic
importance to our business operation" and "new chartered services in
key trade lines" that
you refer to here.
Management's Discussion and Analysis of Financial Condition and Results of
Operations, page
70
10. Describe any known trends or uncertainties that have had or that are
reasonably likely to
have a material favorable or unfavorable impact on revenues or income
from continuing
operations. If you know of events that are reasonably likely to cause
a material change in
the relationship between costs and revenues disclose the change in the
relationship. Refer
to Refer to Item 303(b)(2)(ii) of Regulation S-K.
11. As an entity that provides a comprehensive range of cross-border
supply chain services,
discuss how supply chain disruptions have impacted your operations,
both positively and
negatively, during the financial statement periods presented.
Specifically discuss how
revenues, costs, operating profit, net income, capital resources and
liquidly have been
impacted. Also discuss how supply chain disruptions are expected to
impact your outlook
Xiaogang Geng
FirstName LastNameXiaogang Geng
Jayud Global Logistics Ltd
Comapany
October 18,NameJayud
2022 Global Logistics Ltd
October
Page 4 18, 2022 Page 4
FirstName LastName
and business goals.
12. Please discuss and analyze your financial condition and changes in
your financial
condition, including the reasons for increases or decreases in average
days sales in
receivables and payables. Refer to Item 303(b) of Regulation S-K.
Key Components of Our Results of Operations
Cost of Revenues, page 72
13. Your cost of revenues primarily consist of (i) cost of freight
charges, (ii) cost of goods,
(iii) labor costs, (iv) cost of customs brokerage, and (v) cost of
packaging. It appears that
cost of freight charges is mainly attributable to your freight
forwarding services. If this is
the case, expand the description of the cost of freight charges to
disclose the specific costs
included in these charges. Similarly expand your cost of revenue
disclosure on page F-17
of your financial statement footnotes.
Results of Operations
Year Ended December 31, 2020 Compared to Year Ended December 31, 2021, page 74
14. Freight forwarding service revenues increased RMG244.4 million or
100.3% for the year
ended December 31, 2021. Expand your discussion and analysis as
follows:
You disclose that revenue increased due to a 142.8% increase in
customers from 599
to 1,299 customers. Disclose and quantify the factors that
materially contributed to
this customer growth rate, including any changes in customer
acquisition costs;
You disclose that average revenue decreased from RMB542.7 in
2020 to RMB420.0
in 2021. Disclose the reasons why average revenue per customer
declined in 2021;
and
You disclose that revenue increases were driven by increased
demand due to the
recovery from COVID-19 and the establishment of four new
footprints to complete
transportation coverage in Guangdong, Fujian and Jiangsu
provinces. Discuss and
analyze separately the amount of revenue increases in these four
new footprints due
to price, quantity and mix.
Refer to Item 303(b)(2)(iii) of Regulation S-K.
15. Your disclosure that cost of revenues for freight forwarding services
increased primarily
due to the increase of freight charges is quite broad. Discuss and
quantify the specific
costs that increased, fuel costs, any material charges that offset one
another and the
underlying reasons for the changes.
16. Selling expenses as a percentage of revenues declined from 2.2% in
2020 to 1.6% in
2021. Please discuss and analyze why selling expenses decreased as a
percentage of
revenues in 2021.
17. Your capital expenditures increased from RMB155,102 in 2020 to
RMB634,871 in 2021.
Xiaogang Geng
FirstName LastNameXiaogang Geng
Jayud Global Logistics Ltd
Comapany
October 18,NameJayud
2022 Global Logistics Ltd
October
Page 5 18, 2022 Page 5
FirstName LastName
Yet, your depreciation expense declined from RMB745,302 in 2020 to
RMB545,048 in
2021. Please discuss and analyze the reasons for the decrease in
depreciation expense
despite the significant increase in capital expenditures in 2021.
18. You disclose in a risk factor that your financial position and results
of operations may be
materially adversely affected if your expenditure on warehouses and
equipment do not
match customer demand. You also disclose that to facilitate your
future expansion you
will need to make substantial capital expenditures. Please discuss and
analyze the costs of
your warehouse operations.
Our Suppliers, page 113
19. We note the disclosure that for the years ended December 31, 2020 and
2021, expenses
incurred in relation to your five largest suppliers in terms of
contract amount accounted
for approximately 65.0% and 51.3% of your total expenses for the same
periods,
respectively. We also note your disclosure at page F-34. Please revise
to identify your
material suppliers and file these agreements as material contracts or
provide analysis
explaining why you are not substantially dependent upon these
contracts.
Registration Rights, page 172
20. We note the disclosure that upon completion of this offering, certain
holders of your
ordinary shares or their transferees will be entitled to request that
you register their
ordinary shares for resale under the Securities Act, following the
expiration of the lock-
up agreements. Once available, revise to disclose the material terms
of the registration
rights agreement, including the number of shares subject to such
agreement, and file such
agreement as an exhibit to your registration statement.
General
21. Please provide us copies of all written communications, as defined in
Rule 405 under the
Securities Act, that you, or anyone authorized to do so on your
behalf, present to potential
investors in reliance on Section 5(d) of the Securities Act, whether
or not they retain
copies of the communications.
You may contact Yong Kim, Staff Accountant at 202-551-3323 or Gus
Rodriguez,
Accounting Branch Chief at 202-551-3752 if you have questions regarding
comments on the
financial statements and related matters. Please contact Michael Purcell, Staff
Attorney at 202-
551-5351 or Loan Lauren Nguyen, Legal Branch Chief at 202-551-3642 with any
other
questions.
Sincerely,
Division of
Corporation Finance
Xiaogang Geng
Jayud Global Logistics Ltd
October 18, 2022
FirstName
Page 6 LastNameXiaogang Geng
Comapany NameJayud Global Logistics Ltd
Office of Energy & Transportation
October 18, 2022 Page 6
cc: Yang Ge
FirstName LastName