On the evening of August 19, Beijing time, Yimutian Inc. (stock ticker: YMT) officially began trading on the NASDAQ exchange, becoming the first Chinese agricultural full-industry-chain internet enterprise to list on global capital markets. However, on its debut trading day, the stock price slid from its offering price of $4.10 to close at $2.80, representing a decline of 31.71%.
Despite carrying the distinction of being the "first agricultural e-commerce stock" and securing multiple rounds of investment from prominent institutions including Sequoia China, Yimutian Inc. has yet to achieve profitability, with questions remaining about the viability of its business model.
**Market Reality Check**
Yimutian Inc.'s opening performance on its debut day initially showed promise. The stock opened at $5.88 per share, marking a substantial 43.41% premium above the offering price, but this momentum could not be sustained as shares subsequently declined sharply.
By the close of U.S. trading, Yimutian Inc. shares finished at $2.80 per share, down 31.71% from the offering price. This performance fell short of market expectations, reflecting investor concerns about the company's prospects.
The IPO involved the sale of 4.522 million American Depositary Shares (ADS) at an offering price of $4.1 per share. If underwriters exercise their full over-allotment option of 488,000 ADS, Yimutian Inc. would raise approximately $22 million from this IPO.
The company stated that proceeds from the fundraising would primarily be used to continue expanding its offline "Wolai" agricultural product brokerage service network, conduct comprehensive reviews and designs of agricultural product brokerage service processes and systems, and advance internationalization-related business initiatives.
**The Elusive Path to Profitability**
Financial data reveals that Yimutian Inc. has not achieved profitability and shows lackluster revenue growth. From 2022 to 2024, the company's revenues were 156 million, 188 million, and 161 million RMB respectively, showing a fluctuating downward trend. Corresponding net losses were 116 million, 106 million, and 34.9 million RMB respectively. While losses decreased by 67%, this seemingly positive transformation relied on "cost-cutting" rather than "revenue growth."
In 2024, the short video functionality of digital agricultural commerce services was disabled, leading to decreased monthly active users and business conversion rates. Simultaneously, reduced government project income contributed to a 14% year-over-year revenue decline.
From a revenue structure perspective, Yimutian Inc.'s income primarily derives from two main business lines: digital agricultural commerce services and other digital agricultural solutions. In 2024, these two businesses accounted for 94.6% and 5.4% of revenue respectively. Membership fees and value-added services represent the company's two most stable revenue sources, accounting for 59% and 33% of total revenue respectively. However, the prospectus shows that the proportion of annual paying merchants declined slightly from 14.0% in 2023 to 11.4% in 2024.
**Business Model and Market Position**
Founded in 2011, Yimutian Inc. began as an information service platform and has evolved into a comprehensive digital agriculture enterprise covering the entire agricultural industry chain. The company describes itself as a leading domestic B2B integrity platform for bulk agricultural product transactions.
From a business model perspective, Yimutian Inc. primarily provides transaction facilitation services for agricultural product operators of certain scale. Platform suppliers mainly include rural cooperatives, brokers, large-scale growers, and family farms.
Purchasers include agricultural product wholesalers, processing enterprises, supermarkets, restaurant chains, B2C sellers, and export trading companies. Yimutian Inc. combines online and offline approaches to help agricultural products flow efficiently from production areas to markets.
As of the end of 2024, Yimutian Inc.'s service network covered more than 340 cities and over 2,800 counties nationwide, penetrating over 65% of primary and secondary agricultural product wholesale markets. The platform hosts over 38 million merchants, provides approximately 21 million SKUs, and facilitates 147 million searches and 583 million phone calls and instant message communications annually.
Yimutian Inc. has currently formed four major business lines: digital agricultural commerce services, agricultural procurement and trading services, smart agriculture, and other digital agricultural solutions. Among these, digital agricultural commerce services represent the core business, mainly including membership services, value-added services, and transaction services. In 2024, these three service categories accounted for 59.3%, 32.6%, and 2.7% of revenue respectively.
**Continued Investment Institution Backing**
As one of the earliest entrepreneurs to enter the agricultural internet sector, 40-year-old Yimutian Inc. founder Deng Jinhong does not have an agricultural background. He is from Zhanjiang, Guangdong, and studied Information Engineering at Beijing University of Posts and Telecommunications for his undergraduate degree.
After graduation, he embarked on an entrepreneurial path, experiencing two startup attempts before joining Baidu, where he served as product manager and strategic cooperation manager for the marketing department.
In 2009, Deng Jinhong took over a rural informatization project at Baidu. During the two-year project implementation, he made multiple visits to rural areas and witnessed various rural challenges firsthand: severe empty-nest phenomena and massive outflow of young labor. Agricultural product circulation had not been innovated for decades, with prominent issues of low efficiency and information asymmetry—farmers struggled to sell agricultural products at reasonable prices in a timely manner, while buyers often found themselves in the predicament of "difficulty finding goods."
These observations planted seeds of change in his mind. In 2011, 26-year-old Deng Jinhong resigned from Baidu and officially founded Yimutian Inc.
Since its establishment, Yimutian Inc. has received investments from renowned institutions including Sequoia China, Yunfeng Fund, and Hua Chuang Capital. According to public data, in December 2013, Yimutian Inc. secured $15 million in Series A funding with participation from Sequoia China.
In July 2014, Sequoia China and Guangxin Capital participated in a $20 million Series B round. In July 2015, Yimutian Inc. completed tens of millions of dollars in Series C funding. Between 2016-2019, Sequoia, ZhenFund, E-Commerce Holdings, Yunfeng Investment, and others all participated in Yimutian Inc.'s Series C financing rounds.
Prior to the IPO, Sequoia China held a 15.9% stake in Yimutian Inc., making it the largest external institutional shareholder. Deng Jinhong holds 17.77% of shares with 74.91% voting rights, maintaining strategic control over the company.
**Challenges and Future Prospects**
Yimutian Inc.'s business model faces multiple potential risks. First, cost pressure represents an unavoidable challenge both currently and in the future.
The prospectus shows that Yimutian Inc. plans to heavily invest IPO proceeds in the offline "Wolai" model. "Wolai" essentially represents a massive offline ground promotion and service team that penetrates production and sales markets to provide consignment, quality control, and facilitation services.
Aggressive expansion of this network means the company's cost structure may undergo transformation: labor costs, management costs, and office operation costs will rise sharply. However, each "Wolai" network node requires time to develop, necessitating continuous investment before reaching break-even point.
Second, channel stickiness and "order-jumping" risks represent chronic problems for all B2B platforms. How to lock users firmly within the platform ecosystem through irreplaceable logistics, financial, and quality control services, preventing them from completing transactions offline to avoid commissions, represents a key factor determining whether the business model can succeed.
More fundamental challenges stem from industry characteristics. The non-standardized nature of agricultural products leads to difficult quality control and frequent disputes, making trust-building extremely costly. This requires platforms to deeply participate in transactions and build offline inspection and credit systems. This positioning is very delicate. If too platform-oriented, profitability becomes difficult; if too deeply involved in self-operation, it creates competitive relationships with platform customers, leading to ecosystem partner resentment and attrition.
Additionally, giants like Alibaba, JD.com, and Pinduoduo all have deployments in agricultural product upstream sectors and possess more substantial capital, traffic, and ecosystem advantages.
Once they consider the "Wolai" model validated as successful, they have the complete capability to rapidly replicate using capital advantages. How Yimutian Inc. can resist such potential dimensional attacks also represents a concern for investors.
Cao Lei, Director of the E-commerce Research Center at 100EC.cn, points out that from a strategic value perspective, Yimutian Inc.'s listing strategic value lies in data asset accumulation and globalization potential.
Fourteen years of deep cultivation in industry frontlines have accumulated nationwide buyer resources, main production area market databases, and category standard systems, potentially becoming a bridge connecting Chinese and global agricultural product markets.
Yimutian Inc.'s debut day decline aligns with recent capital market cautious attitudes toward loss-making enterprises. Investors focus more on companies' ability to achieve sustainable profitability rather than merely user scale and market potential. Yimutian Inc. needs to demonstrate to markets a clear, credible path explaining how to convert its over 56 million user scale into tangible, sustainable profits rather than continued "strategic losses."
Its future stock price performance will directly depend on whether it can solve inherent industry problems while delivering to capital markets a report card featuring both growth and healthy profits.