Tenways rushes to Hong Kong Stock IPO: Holding the "Chinese brand conquering the European market" narrative, but is it less profitable than OEM manufacturing?

In the wave of Chinese manufacturing going global in recent years, two-wheeled transportation has experienced a rare capital frenzy.

The pandemic changed many consumers’ exercise habits. Once considered niche, electric assist bikes (E-bikes) suddenly crossed category boundaries and became darlings of hot money in the primary market.

Among this massive wave of overseas bike financing, the most eye-catching “top student” is Tenways, an E-bike brand focused on the European mid-market.

During the brief window from 2021 to 2023 when hot money flooded in, Tenways completed multiple rounds of financing, securing investments from Hillhouse, Tencent, and Louis Vuitton’s investment arm LVMH Kering.

With the support of star investors, Tenways has begun to show scale, with revenue reaching €60.635 million in 2024, equivalent to RMB 485 million.

Backed by star institutions and expectations of heavy monetization, Tenways’ parent company Radvance Cayman Limited (hereafter “Tenways”) has launched a sprint toward the Hong Kong Stock Exchange.

Although revenue has taken shape, Tenways faces many challenges.

On one hand, if Tenways fails to go public before 2028, the shareholding agreements with many shareholders could trigger buyback obligations, amounting to over €100 million in liabilities.

On the other hand, while Tenways’ E-bikes are priced over ten thousand RMB, limited scale and marketing mean profits are not substantial; in the first three quarters of 2025, adjusted net profit was only €1.244 million.

Crossing the scale threshold is the brutal challenge Tenways must face next.

Capital Realization Period

The pandemic in 2020 sparked a global boom in the electric bicycle industry.

On the demand side, driven by the need for safe social distancing, cycling culture in Europe and America experienced a full revival. This not only led to explosive sales but also shifted the main battlefield of bike consumption toward higher-priced electric assist (E-bike) models.

On the policy side, many Western governments actively supported this trend with subsidies. Starting in 2020, states like California and Washington in the US introduced E-bike subsidy policies, including exemption from 6.5% sales tax and 50% discounts on purchases; Italy offered reimbursements covering up to 60% of bike costs, with a maximum subsidy of €500.

Investors responded swiftly, pouring real money into Chinese E-bike companies, pushing them onto the fast track of global expansion.

2021-2023 was undoubtedly a golden age for Chinese E-bike exports. Tenways secured billions of yuan from Hillhouse, Tencent, and LV; Urtopia obtained nearly $10 million from Lightspeed China and DCM; Aventon, supported by GaoRong and Sequoia China, reached a valuation of $590 million.

Now, as the industry reaches a milestone, Tenways, the first Chinese E-bike company to take steps toward an IPO during this wave, is leading the charge with a “channel-focused, mid-range pricing” competitive strategy.

In terms of channel layout, compared to many overseas companies that rapidly expand via Amazon, Tenways has chosen a relatively “heavier” approach.

For high-priced, experience-oriented E-bikes, offline test rides and maintenance are unavoidable hurdles. To this end, Tenways has established a physical sales network with 1,400 stores across Europe.

Currently, the main revenue comes from independent and retail chain stores, which contributed €38.93 million in the first three quarters of 2025, accounting for about 70%.

In product and pricing, Tenways opts for its own brand to target the “mid-range upgrade” market gap.

Based on different usage scenarios, Tenways’ products are divided into city, hybrid, and cargo E-bikes, with city E-bikes being the main revenue source, accounting for over 70% in the first three quarters of 2025.

The flagship models are priced between €1,799 and €2,199, roughly RMB 14,300 to RMB 17,500.

This pricing strategy essentially aims to avoid direct confrontation with established giants. For example, German high-end brand Haibike’s E-bikes are priced between €6,000 and €10,000, while Dutch century-old brand Gazelle’s E-bikes are generally above €3,000.

Although priced lower than local brands, Tenways’ own brand and China’s complete supply chain still offer some gross profit margin—reaching 31.8% in the first three quarters of 2025.

This figure surpasses many OEM companies.

Take Tianjin Fushida Bicycle Industry Co., Ltd. (hereafter “Fushida”), which is rushing toward an IPO on the Shanghai Stock Exchange. It mainly supplies brands like Lightning and Decathlon. Its gross profit margin for E-bikes in the first half of 2025 was only 18.82%, over 10 percentage points lower than Tenways.

Carrying Over Billion Yuan in Shareholder Commitments

At first glance, Tenways’ prospectus presents a “brand premium” success story of going global. However, behind its high gross margins, net profit remains relatively limited.

Using adjusted net profit for the first three quarters of 2025, Tenways’ net profit margin was only 2%. In contrast, Fushida, which still earns from OEM manufacturing, has maintained a net margin of 7%-8% over the past three years.

This is partly because Tenways, as a brand owner, bears higher upfront marketing costs, which erodes profit margins. In the first three quarters of 2025, sales expenses reached €10.61 million, accounting for 19.6% of revenue.

Another reason is that overall sales volume remains limited, insufficient to generate significant scale effects.

In 2024, Tenways sold 41,100 units, representing only 0.07% of the total European market.

Ironically, in its IPO prospectus, Tenways cites third-party data showing it ranks second across Europe in “social media mentions” as evidence of its brand influence.

This highlights the awkward position of Tenways in the industry.

In reality, compared to OEM factories that simply produce on order and earn stable processing fees, building a brand means each bike’s profit is squeezed by long channel lines, high customer acquisition costs, and under-scaled production lines.

Another challenge is that industry giants like NIO, after a long period of hesitation, have finally decided to enter the E-bike market.

“Actually, NIO started researching E-bike products back in 2014, but it wasn’t until 2025 that we really began to dive deep,” said NIO founder Gao Lufeng in a media interview last year. “E-bikes were still niche products early on. If we had entered then, it wouldn’t have been financially viable. We believed the right time was when annual sales hit 10 million units.”

To this end, NIO partnered with operators to launch over 15,000 shared E-bikes at the Paris Olympics in 2024, aiming to become the top player in five years.

As competition intensifies, less capitalized E-bike companies are being pushed out.

Earlier this year, North American E-bike brand Rad Power Bikes filed for bankruptcy and was acquired at a bargain price of less than RMB 100 million.

As a company only five years old, Tenways’ financial strength is limited. As of late September, cash and cash equivalents totaled €19.71 million.

Fundamentally, Tenways’ growth is slowing.

In the first three quarters of 2025, its E-bike sales increased by only 6.3% year-over-year, far below the over 20% growth in all of 2024; prices also slightly declined, with average prices for city and hybrid E-bikes at €1,144 and €1,414 respectively, down 3.21% and 7.82% year-over-year.

The shareholding commitments are also a sword hanging over its head.

According to the shareholder agreements, if Tenways fails to go public before 2028, it may be required to buy back shares. As of September 2025, this redemption liability had reached €118 million.

With deadlines for commitments and growth pressures, plus industry giants circling and reshuffling, for Tenways, rushing to list is a race against time. Securing secondary market funding and removing the billion-yuan redemption bomb before Chinese industry giants fully expand overseas might be the only way to survive this brutal淘汰赛.

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