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United States securities and exchange commission logo
April 20, 2021
Zheng Xu
Chief Executive Officer
Missfresh Ltd
3rd Floor, Block A, Vanke Times Center
No. 9 Wangjing Street, Chaoyang District
Beijing 100016
The People s Republic of China
Re: Missfresh Ltd
Draft Registration
Statement on Form F-1
Submitted March 24,
2021
CIK No. 0001851682
Dear Mr. Xu:
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 submitted March 24, 2021
Cover Page
1. We note your disclosure
elsewhere in the prospectus that you will be a controlled
company following the
completion of the offering. Please include similar disclosure on
the cover page of your
prospectus.
Prospectus Summary, page 1
2. Please revise page 1
and elsewhere, as applicable, to precede disclosure of GMV with
disclosure of your
revenues to avoid giving undue prominence to this metric.
Zheng Xu
FirstName LastNameZheng Xu
Missfresh Ltd
Comapany
April NameMissfresh Ltd
20, 2021
April 220, 2021 Page 2
Page
FirstName LastName
3. We note your definition of GMV on page 9. Please explain the
difference between GAAP
revenue and GMV.
4. We note your statements on page 2 that you "have transformed this
industry through our
extensive market know-how and pioneering technological innovations"
and have
"invented the distributed mini warehouse (DMW) model." Please provide
support for
these statements.
5. Please revise to provide additional detail on your mobile application
and Mini Program
and highlight the differences between the two.
6. Please revise to include the number of other companies are in the
on-demand
neighborhood retail industry. In addition, please specify how many are
"major players,"
and define this term.
7. Please add to the summary disclosure regarding your dual class capital
structure, the
disparate voting rights of your Class A and Class B ordinary shares,
and the percent of the
voting power the holder of Class A ordinary shares will control upon
completion of the
offering.
What We Have Achieved, page 3
8. Please balance your disclosure by disclosing here the amount of your
indebtedness, which
we note was RMB830.0 million (US$127.2 million) as of December 31,
2020.
Conventions that Apply to this Prospectus, page 9
9. We note that you define "effective users" as "transacting users whose
payment in such
given period exceed our related cost of products sold to such
transacting users." Please
revise to disclose how you define your "related cost of products."
10. Your definition of GMV includes the "total value of all orders, for
products and services
placed on the Missfresh mobile app, Mini Programs or through
third-party platforms,
excluding the orders that were canceled." Where you reference the GMV
of your
competitors, or the industry at large (for example as it is used in
the iResearch Report),
please revise to include the relevant distinctions between your
definition and any other
definition.
Overview, page 86
11. You state you have established 622 DMWs in 16 cities in China as of
December 31,
2020. On page 29 you state that some DMWs are managed by
third-parties, while on
page 131 you state that all DMWs are managed by you. Please revise to
clarify what you
mean by the term "established" and whether it means own and operate.
Please also revise
the disclosures on pages 29 and 131 for consistency with how your DMWs
are managed.
In addition, if some DMWs are managed by third-parties, please state
the extent to which
this is so.
Zheng Xu
Missfresh Ltd
April 20, 2021
Page 3
Impact of COVID-19, page 90
12. We note your statement that "[d]espite the impact of the COVID-19
pandemic, our
effective users increased from 7.2 million in 2019 to 8.7 million in
2020, and our gross
profit increased by 128.5% from RMB520.9 million in 2019 to RMB1,190.4
million in
2020." Please revise your disclosure to explain, as you do on page 90
of your registration
statement, that the COVID-19 pandemic has caused more consumers to
change their
grocery shopping from offline to online, which, in turn, has benefited
integrated retail
platforms with a standardized and efficient supply chain.
Management's Discussion and Analysis
Results of Operations, page 93
13. We note your sales increased 69.2% from 2018 to 2019 and 2.2% from
2019 to 2020.
Please revise to explain the significant deceleration in your revenue
growth rate.
Industry, page 111
14. We note your statement that "China s neighborhood retail market has
experienced
significant growth over the past five years." However, the preceding
chart illustrates that
the overall numbers have decreased since 2016. Please revise to
reconcile your statement
and the chart.
Business
Our Innovative Business Model, page 122
15. Please clarify how you operate your business. In doing so, please
explain in detail how
the DMW model operates. In addition, please clarify the extent to
which you currently
operate your business through traditional, bricks-and-mortar channels
and the extent to
which your currently operate it through online channels, like apps and
platforms. Finally,
please make conforming revisions to the prospectus summary.
Note 2. Significant Accounting Policies
(s) Research and development expenses, page F-25
16. We note your research and development expenses include costs for
maintaining your
technology platform and technology infrastructure costs, including
bandwidth and data
center costs, rentals, utilities and other expenses necessary to support
your internal and
external business. Some of these costs do not appear consistent with the
definition of
Research and Development within the FASB Codification Master Glossary.
Please either
FirstName LastNameZheng Xu
separate the research and development costs from other costs in your
financial statement
Comapany NameMissfresh
presentation, Ltd changing the title of this financial
statement line and all
or consider
references
April 20, to it3 throughout your filing.
2021 Page
FirstName LastName
Zheng Xu
FirstName LastNameZheng Xu
Missfresh Ltd
Comapany
April NameMissfresh Ltd
20, 2021
April 420, 2021 Page 4
Page
FirstName LastName
Exhibits
17. We note that you enter into strategic supply agreements, business
cooperation
agreements, lease agreements, and management agreements with your
delivery partners.
To the extent these agreements are material, please file such
agreements as exhibits. In
addition, please file as exhibits your agreements with Tencent, which
we note is the
beneficial owner of shares of your preferred stock and has
representation on your board of
directors. Please refer to Item 601(b)(10) of Regulation S-K.
You may contact James Giugliano at (202) 551-3319 or Lyn Shenk at (202)
551-3380 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Cara Wirth at (202) 551-7127 or Dietrich King at (202) 551-8071 with
any other
questions.
Sincerely,
Division of
Corporation Finance
Office of Trade &
Services
cc: Z. Julie Gao