Tencent LV bets, selling 40,000 bikes to Europe, TENWAYS' IPO hides a 900 million dollar earnout

How does AI · TENWAYS’ earnout agreement affect its listing timeline?

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The listing deadline is 21 months away.

Author | Liu Qinwen

Editor | Gao Yuanshan

In the current wave of green travel sweeping the globe, a European-focused e-bike brand is accelerating toward a Hong Kong listing.

Recently, TENWAYS’ operating entity Radvance Cayman Limited officially submitted its IPO prospectus to the Hong Kong Stock Exchange, aiming for a main board listing, with GF Securities as the sole sponsor. If successful, this five-year-old company will earn the title of “Hong Kong’s first e-bike IPO.”

This outbound brand, originating from Nanshan, Shenzhen, and rapidly rising due to precise insights into the European market, is backed not only by star-studded investors like Hillhouse, Tencent, Alibaba, and LVMH’s Louis Vuitton Kering, but also carries the story of a traditional bicycle family’s second-generation transformation. However, behind its impressive revenue growth, ongoing losses and hidden compliance risks pose significant challenges on its IPO path.

01

Maximum bike price of 40,000 yuan,

Over 97% of revenue from European market

TENWAYS’ story begins with a clear global positioning: design and sales centers in Europe, with supply chain and R&D rooted in Asia. This “European brain + Asian hands” model allows precise targeting of urban commuting and leisure segments in Europe.

From a business model perspective, TENWAYS is a typical brand-driven company, with core profits from e-bike sales supplemented by accessories and services. The company has built a full product matrix covering city, hybrid, and cargo bikes to meet diverse scenarios from urban commuting and off-road adventures to family cargo.

Its pricing strategy targets the mid-to-high-end market. In the first three quarters of 2025, the average selling prices for city, hybrid, and cargo e-bikes were €1,144, €1,414, and €2,255 respectively, roughly RMB 9,300, 11,495, and 18,333. The suggested retail price can reach up to €4,999 (about RMB 40,000).

Source: Prospectus

High pricing has not hindered expansion. The prospectus shows that from 2023 to the first three quarters of 2025, sales of e-bikes steadily increased: 38,876 units, 47,561 units, and 43,694 units respectively.

Among these, city models, with precise market positioning, are the best-sellers. In the first three quarters of 2025, city e-bikes contributed €41.94 million, accounting for 77.5% of total revenue. In 2024, sales of this model exceeded 40,000 units.

Sales of city, hybrid, and cargo e-bikes are the company’s core pillars. The prospectus shows that in 2023, 2024, and the first three quarters of 2025, revenue from e-bike products was €47 million, €59 million, and €52 million respectively, accounting for 99%, 97.6%, and 97.6% of total revenue.

Additional income comes from accessories, apparel, and other related products, but these accounted for only 1%, 2.4%, and 2.4% during the reporting periods.

Steady sales growth directly boosted revenue: in 2023, 2024, and the first nine months of 2025, TENWAYS’ revenue was €48.03 million, €60.64 million, and €54.19 million (about RMB 540 million), with a 26.2% increase year-over-year in 2024.

Notably, TENWAYS was one of the first European brands to introduce integrated torque sensors, hub motors, and belt drives in e-bikes, giving it a competitive edge. As of September 30, 2025, based on social media mentions, it ranked second among European e-bike brands, and in 2024, ranked in the top five in the Benelux region for urban commuting, with a market share of 5.9%.

Thus, TENWAYS has a deep dependence on the European market. In the first three quarters of 2025, 97.7% of revenue came from Europe, with over half of that from the Benelux region (Belgium, Netherlands, Luxembourg).

However, at a critical IPO juncture, some operational compliance issues have come under scrutiny.

The prospectus discloses that the company has unpaid employee benefits in both regions: in the Netherlands, its subsidiary has not fully complied with industry pension fund laws, resulting in a provision of about €500,000; in China, the company has not fully paid social insurance and housing provident funds for some employees, with arrears exceeding RMB 19.1 million during the reporting period.

02

21 months until listing,

9 million euro redemption pressure

Despite rapid revenue growth, TENWAYS’ profit statement shows a book loss.

Data shows that in 2023, 2024, and the first nine months of 2025, the company’s losses were €4.65 million, €34.47 million, and €30.00 million respectively, totaling nearly €70 million in accumulated losses.

However, a detailed financial analysis reveals that these losses mainly stem from non-cash accounting treatments rather than core business issues. The main drivers are twofold: “fair value losses on convertible redeemable preferred shares” and “share-based compensation.”

Under international accounting standards, companies issuing convertible redeemable preferred shares to investors are generally classified as “financial liabilities.” As the company’s valuation rises in subsequent financing rounds, the fair value of these preferred shares increases, requiring recognition as “fair value change losses” in financial statements.

Wang Wenxi, vice chairman of the China Enterprise Capital Alliance, explains that convertible redeemable preferred shares are a special financial instrument that can be converted into common stock or redeemed under certain conditions. The fair value changes of these preferred shares reflect the company’s rising valuation, but this increase is recorded as a loss because it increases the potential redemption amount or conversion value the company might need to pay in the future.

Source: Prospectus

During the reporting period, the company’s non-cash losses on this item surged to €1.473 million, €29.64 million, and €30.14 million, roughly matching net losses. This means that if this impact is excluded, the company’s adjusted net profit in the first three quarters of 2025 would be €1.244 million, with an adjusted net profit margin of about 2.3%.

However, behind this accounting treatment lies a substantial pressure from the earnout agreement. The prospectus shows that the preferred shares issued by TENWAYS have complex redemption rights.

According to the terms, if the company fails to complete a qualified listing before January 1, 2028, or if certain trigger events occur—such as founder departure, major business changes, or the founding team holding less than the agreed shareholding—the preferred shareholders have the right to demand redemption.

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This means that if the listing process stalls, the company will face substantial cash redemption obligations. As of September 30, 2025, the balance of convertible redeemable preferred shares was as high as €118 million (about RMB 920 million).

Wang Wenxi notes that the earnout agreement sets a clear timeline for listing, creating pressure for the company to go public within the specified period to avoid triggering redemption rights.

On one side is redemption pressure; on the other, the company’s short-term liquidity is also under strain. As of the end of September 2025, TENWAYS’ net debt was €67.35 million, with a current ratio of 0.49 and a quick ratio of only 0.24. Cash flow from operating activities was negative in 2023 and 2024, only turning positive to €183,600 in the first three quarters of 2025.

03

“Post-85” second-generation founder, luxury capital lineup

TENWAYS’ founder Liang Xiaoling is 41 years old, a graduate of South China University of Technology in electronic science and technology. His career began in the family business, Tricycle Group, led by his uncle Liang Jianxiong, where he served as marketing director. Tricycle is known as the “national mountain bike brand,” with over 30 years of bicycle manufacturing history.

This strong family industrial background endowed TENWAYS with mature manufacturing DNA from inception. Early on, the company maintained complex and close ties with “uncle-led” enterprises.

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In 2021, Liang Xiaoling founded Shifang Sports Technology in Shenzhen, which is TENWAYS. According to the prospectus, related parties mainly include Silver Three Rings, Guangzhou Taichang Auto Parts Co., Ltd. (“Taichang”), and its subsidiary Guangzhou Tomorrow Import & Export Trading Co., Ltd. (“Tomorrow”), controlled by his uncle Liang Jianxiong.

The prospectus shows that related-party transactions cover the entire industry chain, from mold development and OEM manufacturing to component procurement, forming a “one-stop” family collaboration.

Under the “electric bicycle component procurement agreement,” TENWAYS purchases core parts like wheel rims and frames from Silver Three Rings. This is the largest related-party transaction, with procurement amounts of RMB 249 million, RMB 82.45 million, and RMB 6.699 million in 2023, 2024, and the first three quarters of 2025.

In 2023, this accounted for 65.5% of the company’s total procurement. However, from 2024 onward, procurement sharply declined, dropping below RMB 7 million in the first three quarters of 2025.

Under the “original factory entrusted manufacturing and prototype agreement,” Silver Three Rings also produces complete bikes and prototypes for TENWAYS. Service fees were RMB 11.486 million and RMB 3.226 million in 2023 and 2024, respectively, and zero in the first three quarters of 2025.

TENWAYS also commissions Silver Three Rings to design and produce molds for bike frames. Costs were RMB 1.505 million and RMB 1.903 million in 2023 and 2024. It also procures motors, controllers, and other core components from Silver Three Rings, with procurement amounts of RMB 2.657 million and RMB 14.302 million in 2023 and 2024, and no records in the first three quarters of 2025.

“Tomorrow” provides export customs clearance, foreign exchange settlement, and related foreign trade services. Service fees were RMB 134,000 and RMB 204,000 in 2024 and 2025.

It is noteworthy that Liang Jianxiong resigned as director on August 26, 2025. According to listing rules, his related-party status will automatically terminate 12 months after resignation, i.e., on August 25, 2026.

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Despite this, TENWAYS’ success in Europe has quickly attracted top-tier investors.

Since its founding in 2021, TENWAYS has completed five rounds of financing with a star-studded shareholder lineup. Pre-IPO, Hillhouse Capital held 21.17%, making it the largest external investor; Tencent invested through its Yixian platform with a 7.1% stake; LVMH’s Louis Vuitton Kering held 6.47%; Alibaba owned 2.96%; other investors include Heqi Capital, Lixun Precision, Zhongding Capital, among others.

Going public in Hong Kong, under the spotlight of star capital, TENWAYS needs to demonstrate not only its ability to tell a compelling European story but also resilience through compliance and profitability cycles. Whether it can successfully list before the 2028 deadline and resolve the over €100 million earnout pressure will be crucial to its future. What are your thoughts? Feel free to leave comments below.

Author’s note: Personal opinions are for reference only.