SecProbe.io

Mail Stop 3561
June 5, 2018

Zheng Huang
Chairman of the Board of Directors and Chief Executive Officer
Walnut Street Group Holding  Limited
28/F, No. 533 Loushanguan Road, Changning District
Shanghai, 200051
People’s Republic of China

Re: Walnut Street Group Holding Limited
Draft Registration Statement on Form F-1
Submitted May 7 , 2018
  CIK No. 00017 37806

Dear Mr. Huang :

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 dra ft 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 review ing the information you provide in response to these comments and your
amended draft registration statement or filed registration statement, we may have additional
comments.

General

1. Please supplementally provide us with copies of all written communications, as
defined in Rule 405 under the Securities Act, that you , or anyone authorized to do so
on your behalf , present to potential investors in reliance on Section 5(d) of the
Securitie s Act, whether or not they retain copies of the communications.

Zheng Huang
Walnut Street Group Holding Limited
June 5, 2018
Page 2

 Prospectus Summary

Our Business, page 1

2. We note your disclosure here that you “have experienced substantial growth since
[your] inception in 2015.”  Please revise to clarify here that, before completing the
transition into your current business model in the first quarter of 2017, you generated
the substantial majority of your revenue from an online direct sales business which no
longer generates revenue , with a view to putting your statements with respect to your
substantial growth into context wit h respect to the current busine ss model .  Please
provide similar clarification in the Business section on page 93 where you assert that
your “new e -commerce business model has created a snowball effec t that led to
[y]our exponential growth.”

Corporate History and Structure, page 3

3. Since investors will be investing in a holding company that does not directly own its
operations in China, please make this fact clear in your prospectus summary.   It must
be clear  that the business you are describing is not the registrant’s business but is the
business of your  variable interest entities.   Please also disclose in this section the fact
that the shareholders of your VIE may have interests that conflic t with you, as you
state on page 32.

4. Please briefly disclose the significant restrictions on payment of dividends imposed
under PRC law and disclose the circumstances under which the funds of your
subsidiaries  and VIE are distributable as cash dividends t o you.  We note the related
disclosure on pages 37 to 38 and 115 to 116 .

Conventions that Apply to this Prospectus, page 5

5. Please revise your disclosure to clarify whether GMV includes shipping charges paid
by buyers to sellers.

6. We note your disclosur e on page 99 that buyers may access your platform and make
purchases within Weixin directly.  Please revise your disclosure to clarify whether
“active buyers” and “monthly active users” include those that access your program
through Weixin directly.

Zheng Huang
Walnut Street Group Holding Limited
June 5, 2018
Page 3

 Risk Factors

Risks Related to Our Business and Industry

Any change, disruption, discontinuity in the features and functions of major social networks
could severely limit . . . , page 14

7. Please expand this risk factor to specify whether users can currently access your
platform , make team purchases, and share product information  without using a social
network generally and without using Weixin or QQ specifically.  In this regard, we
note your disclosure on page 19 that Weixin “serves as one of [your] access p oints to
[your] platform.”  Please provide similar clarifying disclosure where you reference
social networks on page 1 of the prospectus summary .

Tencent provides services to us in connection with various aspects of our operations . . . ,
page 19

8. Please revise to disclose in this risk factor  that Tenc ent owns both Weixin and QQ.

Our online marketing services constitute internet advertisement . . . ., page 25

9. Please revise to disclose here the proportion of your revenue that is derive d from
“online marketing services and other related services” and is therefore subject to
potential confiscation  in the event of a violation of PRC advertising laws, rules and
regulations.

Capitalization, page 58

10. Please tell us your consideration of revising th e pro forma as adjusted capitalization
table to reflect the April 2018 issuance of 254,473,500 Class A Ordinary Shares to a
company controlled by your Founder.  Please also tell us your consideration of
revising pro forma loss per share in Summary Consolid ated Financial Data and
Selected Consolidated Financial Data to reflect the income statement and balance
sheet effects of this share issuance.  Refer to Article 11 of Regulation S -X.

Management’s Discussion and Analysis , page 72

11. Where you identify two or  more factors that contributed to material changes in
financial statement line items, please consider revising your disclosures to quantify
the individual impact of each factor; in this regard, we note you have identified
multiple factors contributing to t he year over year changes in costs of revenues and
gross (loss)/profit.

Zheng Huang
Walnut Street Group Holding Limited
June 5, 2018
Page 4

Key Factors Affecting Our Results of Operations, page 72

12. In your disclosure on page 73, y ou identify “attracting, engaging and retaining
buyers” as a factor that directly affec ts your results of operations.  You also state on
page 73 that your “buyers and merchants have been increasing in parallel as a result
of the powerful network effects of [y]our platform.”  Finally, you include metrics
such as “active buyers ,” “active merchant s,” and “monthly active users” in various
locations throughout your prospectus .  Please expand your MD&A disclosure to
present these metrics and discuss  any material trends in these and any other important
metrics you use to track user, buyer , and merchant  acquisition, engagement, and
retention .  Refer to Item 4.a of Form F -1 and Item 5.D of Form 20 -F.  For guidance,
refer to Section III.B of SEC Release 33 -8350 .

Our ability to manage our costs and expenses by leveraging our scale of business, page 73

13. Please revise to elaborate upon your belief that your marketplace model “has
significant operating leverage and enables [you] to realize structural cost savings.”
Your revised disclosure should explain what you mean by “significant operating
leverage” and de scribe how your marketplace model has such leverage and how it
enables you to realize structur al cost savings.

Key Components of Results of Operations, page 73

14. It appears that r evenues from  online marketplace services in clude revenues from
online marketing services and transaction services .  Please revise the disclosure in
this section to quantify  the amount of revenue you generated from online marketing
services such as bidding for keywords and advertising placements versus the amount
you generated from transaction services such as commission f ees.  Refer to Item 4.a
of Form F -1 and Item 5.A of Form 20 -F.  Please also tell us what types of revenue
constitutes transaction services revenue, other than commission fees.

15. Please provide additional disclosure regarding the commission fees that you earn
when transactions are completed on your platform, including the range of commission
percentages that you may charge and the factors you consider when establishing such
fees.  Pl ease refer to Item 4.a of Form F -1 and Item 5.A of Form 20 -F.

16. Please quantify the cost  of online marketplace service s incurred from payment
processing versus those incurred from platform operation .

Zheng Huang
Walnut Street Group Holding Limited
June 5, 2018
Page 5

 Business

Our “New E -Commerce ” Platform, page 96

17. On pages 96 and 97, you state, “Nearly all of the transactions in 2017 were team
purchases.”   Please revise to specify the proportion of your orders in 2017 and in the
first quarter of 2018 that were team purchases, or tell us why you believe this
information  is not im portant .

18. Please provide additional disclosure about the third -party online payment service
providers with which you cooperate, including whether you are dependent upon any
particular provider or providers for such services.  Refer to Item 4.B.6 o f Form 20 -F.
To the extent material, provide additional disclosure about the terms of any
cooperation agreements with these providers.

Our Buyers, page 99

19. You state here that you “source a substantial portion of your buyer traffic from major
social ne tworks in China, such as Weixin and QQ.”  Please revise to quantify here the
proportion of your buyer traffic that you source from social networks generally and
from Weixin and QQ specifically.  Please provide similar disclosure in the risk factor
discussi ng your use of social networks on page 14.   Please also explain in greater
detail the “mini -program” within Weixin to which you refer  and tell us whether the
manner in which a buyer accesses your platform affects the way in which you derive
revenues .

Mana gement

Pinduoduo Partnership, page 119

20. We note that you plan to establish the Pinduoduo Partnership prior to completion of
this offering and that it appears that the partnership will have rights with respect to
the “nomination, appointment and evaluation  of directors and key management
(including the chief executive officer).”  In light of the significance of these rights
and in order for us to better understand the relationship between you and the
Pinduoduo Partnership, please provide us with a copy of t he Pinduoduo Partnership
Agreement once available, translated into English as necessary.  We may have
comments on disclosure related to the partnership, once the terms and conditions
enumerated in the second paragraph of this section are established.

Zheng Huang
Walnut Street Group Holding Limited
June 5, 2018
Page 6

 Related Party Transactions

Agreement and B usiness Cooperation with Tencent, page 129

21. Please expand the disclosure here to specify the material terms of your strategic
cooperation framework agreement with Tencent.  Refer to Item 4.a of Form F -1 and
Item 7.B. of Form 20 -F.  Please also revise your disclosure throughout the prospectus,
including the prospectus summary section to more clearly disclose your relationship
with Tencent and the extent to which you are dependent upon Tencent platforms to
conduct your b usiness, or tell us why you do not believe such disclosure is required.
In this regard, we note that you derive a significant amount of your traffic from
Weixin and QQ, and also utilize Tencent’s payment platform to settle transactions on
your website.

Description of Share Capital, page 131

22. We note your disclosure on page 131 regarding “the automatic conversion of all of
[y]our outstanding preferred shares” upon completion of the offering.   Please tell us
whether your outstanding Class B ordinary sha res will convert into Class A ordinary
shares upon completion of the offering, and, if so, please revise to so state and to
disclose the conversion ratio.  If the Class B ordinary shares will not convert and you
will maintain the same dual -class share stru cture after the offering, please revise to
add disclosure here, in the prospectus summary, and in the risk factor section
discussing the disparate voting rights associated with your separate classes of shares
and Mr. Huang’s resulting influence over your c ompany.

History of Securities Issuances

Preferred Shares , page 140

23. You state here that “part of” the $1.4 billion aggregate consideration for your March
2018 issuance of Series D preferred shares “consisted of certain business and strategic
cooperation pursuant to and as specified in the Strategic Cooperation Framework
Agreement between [you] and Tencent Mobility Limited.”  Your disclosure in the
table on page II -2 indicates that this “part” of the consideration amounted to $988.8
million.  Please revise  the disclosure in this section to clarify whether Tencent paid
you any cash consideration for the Series D preferred shares, or instead whether you
issued the shares to Tencent solely in consideration for the business and strategic
cooperation contemplate d in the agreement.

Zheng Huang
Walnut Street Group Holding Limited
June 5, 2018
Page 7

 Description of American Depositary Shares

Limitations on Obligations and Liability

Limits on our Obligations and the Obligations of the Depositary and the Custodian; Limits on
Liability to Holders of ADSs, page 151

24. We note your disclosure on page 152 that “the deposit agreement provides that each
party to the deposit agreement (including each holder, beneficial owner and holder of
interests in the ADRs) irrevocably waives, to the fullest extent permitted by
applicable law, any ri ght it may have to a trial by jury in any lawsuit or proceeding
against the depositary or our company related to our shares, the ADSs or the deposit
agreement.”  Please revise to clarify whether the waiver of the right to a jury trial
applies to claims mad e under the federal securities laws.

Notes to the Consolidated Financial Statements

General

25. Please disclose the amount of revenues from online marketing services versus
commission fees from third party sales transactions, pursuant to the disclosure
requirement in ASC 280 -10-50-40.

2. Summary of Significant Accounting Policies

(m) Revenue reco gnition

Marketplace services, page F -19

26. We note your disclosure that revenues related to commissions on third party sales
transactions are recognized at the time when the underlying transactions are
completed.  Please expand your disclosure to clarify wh en the third party transaction
is considered to be completed.

27. Please tell us the basis in GAAP for the timing of recognition and income statement
classification of coupons issued to consumers.  Explain whether the issuance of the
coupons results in a l oss on the future commission transaction and how this impacts
your accounting.  Also tell us your consideration of disclosing the amount of expense
for each period presented.

28. As it relates to revenue recognition for online marketing services, please eit her
confirm that all of your marketing service arrangements with customers provide for

Zheng Huang
Walnut Street Group Holding Limited
June 5, 2018
Page 8

 revenue on a cost -per-click basis, or if there are other types of marketing service
arrangements, where, for example, you earn fees by virtue of displaying an
advertisem ent over an agreed upon period of time, then please expand your
disclosures to explain the timing of revenue recognition for each type of online
marketing arrangement.

9. Share -Based Compensation, page F -28

29. Please disclose the methods used to estimate the expected term, expected volatility,
expected dividends, and risk -free interest rates.  Refer to ASC 718 -10-50-2(f).

You may contact Yolanda Guobadia , Staff Accountant, at (202) 551 -3562 or Robyn
Manuel , Staff Accountant, at (202) 551 -3823 if you have questions regarding comments on
the financial statements and related matters.  Please contact Parhaum J. Hamidi, Special
Counsel, at (202) 551 -3421 , Lisa M. Kohl, Legal Branch Chief, at (202) 551 -3252  or me at
(202) 551 -3720 with any other questions.

Sincerely,

 /s/ Lisa M. Kohl for

 Mara L. Ransom
Assistant Director
Offic