Executive Summary / Key Takeaways

• Strategic Pivot to Global TravelTech: Webus International Limited ($WETO) is undergoing a significant transformation, shifting its core focus from a China-centric collective mobility provider to an AI-driven global TravelTech innovator, with a strong emphasis on high-margin overseas packaged tour services.
• Technological Edge and Innovation: The company leverages a highly digitized, AI-augmented platform and a unique cloud bidding dispatching system for operational efficiency and personalized service. Recent innovations include the launch of XRP token and Ripple USD (RLUSD) stablecoin payments on its Wetour platform, positioning it at the forefront of "Global Mobility × Crypto" settlement.
• Financial Performance Reflects Transition: While overall revenues declined by 22.60% to RMB 35.59 million (US$4.97 million) in fiscal year 2025, the gross profit margin improved to 16.60%, driven by the higher-margin overseas packaged tour segment. This indicates the early financial benefits of the strategic shift.
• Capital Infusion and Liquidity: A successful initial public offering (IPO) in February 2025 raised RMB 58.26 million (US$8.00 million), significantly bolstering working capital. Despite historical net losses and cash usage from operations, existing cash and projected cash flows are expected to provide sufficient liquidity for the next twelve months.
• Navigating Complex Risks: $WETO faces inherent risks associated with its Variable Interest Entity (VIE) structure in China, potential PRC government intervention, and compliance with U.S. regulations like the HFCAA, which could impact operations and shareholder value. Intense competition and customer concentration in certain segments also present ongoing challenges.

A New Horizon: Webus International's Strategic Reimagining

Webus International Limited ($WETO) is charting an ambitious course, evolving from a regional collective mobility service provider into a global TravelTech innovator. Operating under a Mobility-as-a-Service (MaaS) model, $WETO aims to address inefficiencies in traditional transportation by offering customized solutions for business and leisure travelers worldwide. This strategic pivot, particularly towards high-margin overseas packaged tour services, is underpinned by the company's robust digital platforms and a commitment to advanced technologies like artificial intelligence and blockchain.

The company's journey began in Hangzhou, China, in August 2019 with Youba Tech, its primary operating entity. Initial domestic offerings included customizable travel and chartered bus services. A pivotal step in its global expansion was the establishment of Wetour Travel Tech LLC in the U.S. in March 2022, which immediately began offering customized tour services in North America. This foundational expansion laid the groundwork for $WETO's current global aspirations, setting the scene for a narrative of transformation and technological integration in a dynamic industry.

Technological Pillars: AI, Big Data, and Blockchain Drive Efficiency

At the heart of $WETO's strategy is a profound reliance on technological differentiation. The company boasts a high degree of digitalization across its operations, powered by a self-developed internal business and user management platform. This platform automates online order entry, dispatch, settlement, and invoicing, significantly enhancing operational efficiency. The in-depth analysis of accumulated data allows $WETO to precisely understand user preferences, develop user-friendly products, and identify targeted marketing and cross-selling opportunities.

A key differentiator is $WETO's unique cloud bidding dispatching system. This system dispatches orders to drivers in batches based on system-suggested prices, enabling real-time feedback quotations from drivers. This process demonstrably improves car usage efficiency and allows for more accurate adjustment of product sales prices, contributing directly to cost optimization and competitive pricing. The company's information technology system architecture is built on cloud-native technology, supporting its mobile apps, official websites, mini-programs, and open platforms, and has maintained a technical advantage over competitors for over a year through advanced AI and big data analysis.

Recent innovations underscore $WETO's commitment to cutting-edge technology. In August 2025, its Wetour platform launched support for XRP token and Ripple USD (RLUSD) stablecoin payments. This initiative, aimed at accelerating "Global Mobility × Crypto" settlement, allows travelers to use these digital assets for product vouchers and promotional coupons, with transactions automatically linked to user benefits. This move positions $WETO as an early adopter in integrating blockchain for payment solutions within the travel sector, potentially creating a significant competitive moat by offering enhanced payment flexibility and security. The company's stated goal is to become an "intelligent travel assistant" for its users, continuously adapting to new technologies and formats.

Strategic Transformation: A Global Pivot for Growth

$WETO's financial performance in recent years reflects a deliberate strategic transformation. The company has consciously shifted its focus from the domestic Chinese market, particularly its commuter shuttle and customized chartered bus services, towards the higher-margin overseas packaged tour segment. This strategic adjustment was driven by the relatively lower gross margins and challenges in achieving a satisfactory return on investment in the domestic market, coupled with the increasing demand for overseas tourism in the post-epidemic era.

The impact of this pivot is evident in the segment-level results. For the fiscal year ended June 30, 2025, revenues from packaged tour services, while experiencing a slight overall decrease of 4.10% from 2024, saw overseas revenue increase by RMB 2.46 million. This segment now accounts for 90.20% of total revenues, with overseas contributions making up 71.60% of total revenues. Conversely, revenues from customized chartered bus services plummeted by 71.80% in 2025, and commuter shuttle services decreased by 71.30%, largely due to the termination of contracts with major domestic customers and a strategic decision to downsize these operations. This reallocation of resources towards more promising, higher-margin overseas offerings is a critical component of $WETO's long-term growth strategy. The company plans to vigorously develop the Wetour brand globally, focusing on Chinese outbound tourists and overseas Chinese. This includes increasing brand exposure on new media, building a one-stop platform for international travel integrating air, car, lodging, and touring, and expanding partnerships with major online travel agencies like Ctrip (TCOM), Fliggy, and Expedia (EXPE).

Financial Performance and Liquidity: Investing in the Future

$WETO's consolidated revenues decreased by 22.60% from RMB 45.98 million in fiscal year 2024 to RMB 35.59 million (US$4.97 million) in fiscal year 2025. This decline primarily reflects the strategic downsizing of lower-margin domestic services. Despite the revenue contraction, the gross profit margin improved from 14% in 2024 to 16.60% in 2025, a direct result of the increased contribution from higher-margin overseas packaged tour services. This indicates that the strategic shift, while impacting top-line growth in the short term, is positively influencing profitability metrics. Operating expenses saw a notable increase of 38.7% from RMB 13.90 million in 2024 to RMB 19.27 million (US$2.69 million) in 2025. This was primarily driven by a 93.9% increase in general and administrative expenses, largely due to professional service fees associated with the company's Initial Public Offering (IPO) and strategic consulting services. Research and development expenses, however, decreased by 20.60% in 2025, reflecting a reduction in R&D projects. The company recorded a net loss of RMB 12.48 million (US$1.74 million) in 2025, following a net loss of RMB 4.06 million in 2024.

From a liquidity perspective, $WETO reported net cash used in operating activities of RMB 58.73 million (US$8.20 million) for the year ended June 30, 2025. However, the company significantly strengthened its capital position by completing an IPO on February 28, 2025, raising gross proceeds of RMB 58.26 million (US$8.00 million). As of June 30, 2025, cash and cash equivalents stood at RMB 11.35 million (US$1.58 million).

The company also manages existing credit lines, with RMB 19.50 million in short-term borrowings outstanding as of October 30, 2025, which are expected to be continuously renewed. Management believes existing cash balances and projected cash flows will provide sufficient liquidity for the next twelve months. Capital expenditures in 2025 were modest at RMB 149,439 (US$20,861), primarily for client reception center furniture, though subsequent to year-end, significant building and parking space purchase agreements totaling RMB 14.02 million were entered into, with RMB 3.50 million prepaid.

Competitive Positioning in a Fragmented Market

The collective mobility service market in China is highly fragmented, with approximately a hundred online platforms. $WETO operates as a specialized player, distinguishing itself from broader ride-hailing giants like Didi Chuxing and Meituan , which offer more generalized on-demand services. While Didi Chuxing (DIDIY) and Meituan (MPNGF) benefit from immense scale, network effects, and diversified ecosystems, $WETO's strength lies in its niche focus on customized group travel and enterprise solutions, particularly for Chinese-speaking customers globally.

$WETO's competitive advantages include its deep local expertise in China, strong relationships with suppliers, and a hybrid online-offline distribution model. This allows for tailored packages and competitive pricing, fostering customer loyalty in its target segments. The company's user-centered services, offering 24/7 Chinese and English support and comprehensive after-sale care, further differentiate it. Its extensive network of over 11,000 dispatchable vehicles in mainland China and 10,000 Chinese-speaking drivers overseas provides a robust operational backbone.

However, $WETO faces significant competitive disadvantages due to its smaller scale compared to industry behemoths. This can limit its bargaining power with suppliers and necessitate substantial capital investment to expand its global footprint and technology. The increasing availability of public transportation infrastructure in China also poses a threat to its commuter shuttle and chartered bus services, a factor that contributed to the downsizing of these domestic operations. The company's strategic response involves leveraging its technological edge and specialized service offerings to carve out and dominate its niche, rather than directly competing on scale with larger, more generalized platforms.

Risks and Forward Outlook

Investing in $WETO involves several key risks. The company's Variable Interest Entity (VIE) structure in China introduces substantial uncertainties regarding the interpretation and application of PRC laws, which could affect the enforceability of its contractual arrangements and its ability to consolidate financial results. The pervasive influence of the Chinese government over business activities in China, coupled with evolving regulations on cybersecurity and data transfer, presents ongoing operational and compliance challenges. Furthermore, the Holding Foreign Companies Accountable Act (HFCAA) in the U.S. poses a potential delisting risk if the PCAOB cannot fully inspect $WETO's auditor for two consecutive years.

Customer concentration, particularly the termination of contracts with two major commuter shuttle customers, highlights a vulnerability in certain service segments. The reliance on third-party platforms and payment providers also exposes $WETO to external policy changes or service disruptions. Increases in labor costs in China and volatile oil prices could pressure margins if not effectively passed on to customers.

Despite these challenges, $WETO's outlook is focused on its global expansion and technological leadership. Management anticipates a steady growth in overseas tourism demand in the long term, driven by the recovery of international mobility and rising consumer interest in overseas experiences. The company's strategic initiatives to further integrate its platform into a comprehensive ecosystem, enhance AI and big data innovation, and expand the Wetour brand globally are critical for future growth. The adoption of the 2025 share incentive plan also signals a commitment to aligning employee incentives with long-term value creation.

Conclusion

Webus International Limited is at a pivotal juncture, executing a bold strategic shift towards global, high-margin TravelTech services, particularly in overseas packaged tours. This transformation, powered by its advanced digital platforms, AI capabilities, and pioneering blockchain payment solutions, aims to unlock new growth avenues and enhance profitability. While the company's recent financial performance reflects the transitional challenges of downsizing domestic operations, the improving gross margins in its target overseas markets signal positive momentum.

The successful IPO in early 2025 has provided crucial capital to fuel this expansion, and management's focus on operational efficiency and strategic partnerships is designed to mitigate the inherent risks of operating in a highly competitive and regulated environment. Investors should closely monitor $WETO's execution of its global expansion strategy, its continued technological innovation, and its ability to navigate the complex regulatory landscape in China and the U.S. The company's ability to leverage its niche expertise and technological differentiators will be key to realizing its vision of becoming a leading intelligent travel assistant in the global collective mobility market.