KTZ is rumored to be planning a launch for its Hong Kong IPO as early as October, seeking to raise up to $5 billion to build new routes for western-bound Chinese freight

Key Takeaways:

• Rail operator Kazakhstan Temir Zholy is reportedly preparing to launch its Hong Kong IPO as early as October, after filing its initial prospectus in June
• Cross-border cargo accounted for only 10% of the company's freight volume in 2025, but contributed 33.6% of its freight revenue

By Lee Shih Ta

Freight trains traveling from China to the West often pass through Kazakhstan on their way to destinations across Eurasia, making the Central Asian nation an important link on this modern steel version of the Silk Road. Positioned at that crossroad, Kazakhstan Temir Zholy (KTZ), the country’s rail operator, is now looking eastward to finance its Eurasian overland transport dreams by tapping the Hong Kong capital market.

Specifically, the company is planning to raise up to $5 billion through a listing on the Hong Kong Stock Exchange, and could launch the IPO as early as October after filing its initial prospectus earlier this year, according to Kazakh media reports last week.

Saltanat Satzhan, a managing director at KTZ's parent, the Kazakh sovereign wealth fund Samruk-Kazyna, previously told the South China Morning Post that KTZ aims to complete the Hong Kong listing before the end of this year.

Wholly owned by Samruk-Kazyna, KTZ operates approximately 16,000 kilometers of railway in Kazakhstan, connecting China, Central Asia, Russia, and the Caspian Sea region. Its network facilitates the movement of a wide range of goods between China and Eurasia, ranging from finished products, to commodities like coal, mineral ores, grain and petroleum products. The company transported 320 million tons of cargo last year, with the freight business accounting for nearly 90% of its revenue.

KTZ’s transit freight operations are likely to emerge as a crown jewel as it prepares to go public, and thus merit particular scrutiny. While this category accounted for just 10% of its freight volume in 2025, it generated 33.6% of freight revenue. Longer shipping distances for transit cargo and exemption from domestic Kazakh tariffs is partly to credit for the segment’s relatively large revenue contribution compared to its volume share. The company's transit freight volume grew from 27.3 million tons in 2023 to 33 million tons in 2025. The figure could continue to climb at a similarly brisk pace if cross-border cargo flows continue to climb.

 ‘Middle Corridor’ prospects

As the world’s biggest manufacturer and one of its largest commodities consumers, China is pivotal to KZT’s expansion blueprint. KTZ operates the Khorgos Gateway dry port and is also has logistics operations in the Western Chinese city of Xi’an and the Eastern port city of Lianyungang.

In its prospectus filed in June, the company proposed funneling a portion of its IPO proceeds into constructing its planned 272-kilometer Bakhty-Ayagoz railway line, which would add another border crossing into China. For the company, the new line’s value hinges on whether the dry port, tracks, and transportation services can generate a surge in freight volume, since building extra capacity doesn’t guarantee it will get used.

Industry trends certainly provide a foundation for KTZ's expansion plan. A 2023 World Bank study noted that the Trans-Caspian International Transport Route, or “Middle Corridor,” connecting China and Europe via Central Asia and the Caucasus, has the potential to triple its freight volumes and halve travel times by 2030 if necessary policy improvements and investments are made. However, cross-border cargo volumes remain constrained by the efficiency of ports, customs and railways along the route.

Data from KTZ's prospectus also shows that not all Eurasian freight routes are expanding in tandem. The volume of transit containers traveling between China and the EU via Kazakhstan dropped by 31% from roughly 662,000 twenty-foot equivalent units (TEUs) in 2021 to about 458,000 in 2025, according to the document. While this doesn’t necessarily translate to a contraction in KTZ's overall transit business, it illustrates that freight flows shift with trade patterns and geopolitical dynamics. How much cargo the new crossing can capture will still depend on actual transit times, costs, and route stability.

The company's total revenue and other income climbed 27.4% last year to 2.76 trillion tenge ($6.26 billion). Its net profit for 2025 more than doubled to 343.6 billion tenge, as its gross margin climbed to 30.2% from 25.1% the previous year. The company said the growth was fueled by higher transit volumes, upward revisions in regulated tariffs, and favorable commodity market conditions. Notably, Kazakhstan's regulated freight tariffs were raised by about 24% and 28% in 2024 and 2025, respectively.

Funding pressures

Behind its strong growth, KTZ still faces fierce competition from rival Eurasian transport routes. Shippers can opt for a northern route through Russia, the Middle Corridor across the Caspian Sea, or simply default to maritime shipping. Their choices ultimately hinge on freight rates, delivery times and route reliability.

KTZ’s routes also present a unique logistical challenge because Kazakhstan and China operate on different railway gauges, meaning cargo must be transloaded at the border. Therefore, even after expanding its domestic capacity, KTZ must continue to rely on its neighbors for tracks outside its borders, as well as seamless coordination of border crossings to successfully capture a larger share of Chinese freight flows.

Meanwhile, its ongoing expansion is also testing KTZ's finances. By the end of 2025, the company's net current liabilities stood at 963 billion tenge, with total liabilities swelling to 5.21 trillion tenge. For the year, its operating activities generated 746.8 billion tenge in cash, whereas investing activities consumed 932.3 billion tenge.

KTZ projects that its capital expenditures from 2026 to 2030 will exceed those of the previous five-year period, with roughly 61% of planned investments slated for funding through external borrowing. Aside from constructing the new border line into China, the company plans to use its IPO proceeds for digitalization initiatives and paying down a portion of its interest-bearing debt.

Determining its valuation will be the final hurdle KTZ faces on its road to a Hong Kong listing. The company is reportedly angling for a valuation of up to $30 billion, though some analysts believe the actual figure will fall short of that mark. A $30 billion valuation, combined with the company’s net profit of roughly $700 million in 2025, translates to a price-to-earnings (P/E) ratio north of 40 times, a goal that may prove overly aggressive.

On the whole, KTZ boasts a relatively unique railway network that is difficult to replicate, firmly positioning it to capitalize on the growing flow of goods between China and Eurasia. Its outlook will ultimately depend on whether its newly added capacity can attract sufficient cargo and revenue to justify the high valuation it’s seeking, while paying for its construction investments, and servicing its debt load.

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The Shanghai-listed company has filed for a Hong Kong IPO, reporting it swung to a loss this year as it failed to fully pass on rising material costs to its customers

Key Takeaways:

• Dynamic Electronics has filed to list in Hong Kong, reporting it fell into the red in the first half of this year, even as its revenue jumped by 33%
• The PCB maker is getting pressured by steadily rising material costs, especially for copper, which caused its gross margin to plunge this year

By Bai Xin Rui

Within the hardware realm, printed circuit board (PCB) makers and their suppliers have been major beneficiaries of the AI boom, despite their traditional positioning as an anonymous but important player in the computing space. While many such hardware stocks viewed as AI beneficiaries pulled back sharply in July, overall sentiment toward the group remains relatively strong.

Seizing on that momentum, Dynamic Electronics Co. Ltd. (603175.SH), which is already listed in Shanghai, filed for a second listing in Hong Kong last week, even as rising material costs fueled by the AI explosion pushed it into the red this year.

Founded in 2015, Dynamic Electronics focuses on PCBs, which have wide applications across sectors including automotive electronics, data storage, consumer electronics and communications. The company’s emphasis is on automotive electronic PCBs, which accounted for 51.4% of its revenue in the first half of 2026.

Star-studded clientele

Dynamic Electronics currently ranks sixth globally in automotive PCBs and has captured the global top spot in automotive high-density interconnect (HDI) boards. Its clients include such marquee names as EV pioneer Tesla, auto parts giant Bosch, storage device maker Western Digital, and memory chip giant SK Hynix.

A PCB is a functional board constructed with predefined circuit patterns on a copper-clad laminate or insulating substrate. It is designed to connect electronic components and facilitate their signal transmissions. Serving as the fundamental interconnection for many electronic devices, a PCB's performance typically hinges on its layer count, circuit density, material properties, reliability and end-use applications.

The global PCB industry remains highly fragmented, with the top 10 manufacturers accounting for just 37.7% of the market last year. Competition has moved beyond a simple capacity arms race to a more comprehensive battle over technological thresholds, yield management, client certification and global supply chain capabilities.

According to third-party market data in Dynamic Electronics’ listing document, the global PCB market is expected to grow about 9.1% annually from 2026 to 2030, fueled by steady advances in technology and an explosion in downstream demand.

The PCB product spectrum encompasses HDI boards, multilayer boards, single- and double-sided boards, flexible printed circuits (FPCs) and packaging substrates. HDI boards use microvia, blind and buried vias and sequential build-up structures to achieve denser interconnection within constrained spaces. They are mostly used in compact designs and for high-speed signal transmission, as well as in high-end applications such as domain controllers for autonomous driving and smart cockpits, memory modules, GPU accelerator carrier boards, and AI computing boards.

Meanwhile, multilayer boards feature multiple conductive layers separated by insulating materials and compressed into a single circuit board. Such architecture provides extra wiring space, supporting more complex circuit layouts, power distribution, and signal transmission. Current product tiers include 4- to 6-layer, 8- to 14-layer, and 16-layer and higher PCBs, which are used in vehicle control systems, storage modules, communication equipment and AI computing boards.

The average selling price of multilayer boards is lower than that of HDI boards. According to Dynamic Electronics' listing application, the average price for one of its multilayer boards stood at 1,351 yuan in the first half of 2026, up 19.6% year-over-year. HDI boards fetched an average of 2,833 yuan, up 14.8% annually. Together, multilayer and HDI boards accounted for 45.4% and 43.8% of the company’s revenue, respectively, accounting for nearly 90% of the total in the first half of 2026.

Driven by strong demand from a wide range of applications across automotive electronics, data storage, communications and AI servers, Dynamic Electronics' overall average selling price rose by 27% to 1,684 yuan in the first half of 2026. This helped to lift its revenue by 33.3% to 2.91 billion yuan (326 million) during the six-month period.

But the company began to bleed red ink this year, swinging to a net loss of 191 million yuan in the first half from a profit a year earlier. It attributed the reversal to a net foreign exchange loss of 171 million yuan in the half-year period.

Rising copper prices

While foreign exchange losses played a part in the swing to the red, Dynamic Electronics also suffered a steep profitability squeeze as its gross margin plummeted 6.8 percentage points in the first half to 15.2% from 22% a year earlier. That drastic slide was primarily the result of surging raw material prices alongside rising freight, labor, and other production-related costs.

Raw materials are the biggest item in Dynamic Electronics' cost of sales, representing between 55% and 57% of the total in the last year and a half. Key materials include copper-clad laminates, prepregs, copper foils and copper balls or powder. The company indicated that its inability to promptly pass on these raw material price hikes to customers was the key factor pressuring its gross margin this year.

What’s more, the trend of spiking copper prices looks unlikely to ease anytime soon. London copper futures have touched multiple record highs this year alone, briefly nearing $15,000 per ton — up over 18% year-on-year. With global copper mining capacity on a broader downtrend and aging European and U.S. power grids driving demand for copper wire, demand for the metal is expected to keep growing. That means continued inability to promptly pass on those price hikes to its clients could continue to weigh on Dynamic Electronics’ profitability.

In a sign of shifting sentiment towards these companies, shares of Kinwong Electronic (3228.HK; 603228.SH), which specializes in automotive PCBs, initially fell in their Hong Kong trading debut on Tuesday, before recovering to trade up by more than 10% in the afternoon.

On the whole, Dynamic Electronics looks well-positioned to reap dividends on booming business from the AI and smart vehicle industries, giving it a solid growth narrative. Still, its massive margin compression and resulting near-term losses should serve as a cautionary signal for investors looking for the latest hot AI stocks. Instead, buyers might be well advised to wait for signs of a gross margin recovery, and not focus solely on the company’s strong top-line growth.

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The company is aiming to list in Hong Kong, feasting on a Chinese direct drive actuator module market that soared from 200 million yuan in 2023 to 1.9 billion yuan last year

Key Takeaways:

• Direct Drive Tech has filed for a Hong Kong IPO, reporting its sales rose 40% in the first half of this year after tripling in 2025
• The company controls more than 60% of China’s market for consumer-use direct drive actuator modules that are a key component of affordable household robots  

By Doug Young

Humanoid robots look set to become key helpers in homes of the future, assisting with everything from daily chores like cleaning, cooking and laundry, to taking care of the elderly and children. But in the present, a much simpler generation of consumer robots is rapidly gaining traction by performing many similar tasks on much smaller budgets.

One company underpinning this quieter robot revolution is Direct Drive Tech Ltd., a robotics technology company with two business segments, robotic actuator modules and robots, which hopes to impress investors with its rapid growth and fast-improving margins, as it marches towards a planned Hong Kong IPO. The company filed its IPO prospectus with the Hong Kong Stock Exchange last month and added an update on Sept. 17, with Citic Securities (Hong Kong) as its sole sponsor.

The company was last valued at 3.2 billion yuan in its Series C financing at the end of last year, in which it raised 185 million yuan ($27.6 million). Now, it aims to raise another HK$982.5 million ($125 million) in its Hong Kong IPO by selling 50 million H-shares for HK$21.60 apiece, according to its latest listing document filed on Sept. 21.

The company’s core product, the actuator modules that give robots their ability to move, only sell for a few dollars each, reflecting the relative maturity and growing affordability of a fast-growing industry cranking out products for daily activities like household cleaning, lawn care and fitness.

But when you multiply that by the millions, the opportunity is quite large and growing quickly. China’s direct drive actuator module market grew by more than a factor of eight from just 200 million yuan in 2023 to an estimated 1.9 billion yuan last year, according to third-party research in Direct Drive Tech’s prospectus.

The company is hardly the only one chasing that space, competing with global players like Japan’s Harmonic Drive Systems (6324.T), as well as domestic rivals Leaderdrive (688017.SH) and ZhongDa Leader (002896.SZ). But it’s carved out a very comfortable space in the market for consumer-use direct drive actuator models, controlling 61.1% of that market in China last year, according to the prospectus.

Its listing would make Direct Drive Tech Hong Kong’s first “direct drive actuator module” stock. And unlike higher-profile humanoid robot makers and their suppliers, most of which are deeply in the red, Direct Drive Tech, despite its relatively short history, is inching its way towards profitability on an adjusted basis, which excludes share-based compensation and changes in financial instruments.

The company is also distinguished as the only one in its segment to ship more than 5 million consumer-use direct drive actuator modules. It was on track to ship more than double that figure this year, as it sold 5.7 million modules for consumer-use robots in the first half of this year.

That sales ramp-up is a big part of the company’s story. Annual capacity at its two production bases in the city of Dongguan more than quadrupled to about 15.7 million modules last year from about 4.1 million in 2024. It continued to grow this year, on track to reach more than 20 million units annually.

Young company

Direct Drive Tech has made significant strides in short order to get to its current phase, founded just six years ago in Dongguan before moving its headquarters to Beijing last year. Its founder and Chairman, Zhang Di, started his company at age 26 after earning a bachelor’s degree in mechanical engineering from the Beijing Institute of Technology, and then studying robotics systems and control engineering at the Hong Kong University of Science and Technology.

The company’s story is one of rapid scaling and improving business metrics since it rolled out its first actuator modules shortly after its founding in 2020.

Its revenue more than tripled to 282 million yuan last year from 79.8 million yuan in 2024, and grew another 40% to 200 million yuan in the first half of this year from 143 million yuan a year earlier. Consumer-use robotic direct-drive actuator modules are its biggest revenue source, accounting for 82% of its revenue this year.

The company’s industrial and commercial actuator modules business is a much smaller but fast-growing segment, roughly tripling to 21 million yuan in the first half of this year from 6.58 million yuan a year earlier, rising to 10.5% of revenue from 4.6% over that period.

Beyond modules, the company’s second business segment, robots, showcases its direct drive technology at the complete-machine level, despite the segment’s modest share of total revenue. With wheel-legged robot revenue of 7.3 million yuan in 2025, the company ranked fourth in China’s wheel-legged robot market with a 4.7% market share, according to research in its prospectus.

Advances in motor power density and efficiency could also broaden the use of its higher-margin joint modules in humanoid robots and other embodied-intelligence systems, potentially lifting overall gross margins. Joint modules generated a gross margin of 29.2% in the first half, compared with 17.2% for consumer direct-drive modules, although they accounted for just 1.7% of revenue.

Here, we should point out that one of the company’s vulnerabilities is its relatively high customer concentration. Its top five customers currently account for more than 80% of its sales, with its largest accounting for more than half in the first half of this year.

As its scale improves, the company’s gross margin has been improving rapidly, rising from 13.5% in 2023 to 21.5% last year.  Its expenses as a percentage of revenue have also been coming down steadily, which is exemplified by its R&D costs, which dropped from 223% of revenue in 2023 to just 19.7% last year. That figure rose to 26.8% of revenue in the first half of this year, as the company cited spending related to its rapid business expansion.

Direct Drive Tech’s adjusted non-IFRS net loss also dropped from 61.2 million yuan in 2023 to 43.2 million last year.

Despite its progress, the company’s 21.5% gross margin last year still trailed peers like Harmonic Drive and ZhongDa Leader, which recorded margins of 30.5% and 26.1% in their latest fiscal years, respectively. But steady improvement with its growing scale could soon help Direct Drive Tech to catch and even surpass those rivals, as it continues to feast on a fast-growing and proven market for simple home-use consumer robots.

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The cross-border logistics company has quadrupled the size of its IPO in response to new rules seeking to stamp out suspicious new Chinese listings, seeking to raise $33 million

Key Takeaways:

• World Road Inc.’s updated Nasdaq listing application reveals its business began to deteriorate in its latest fiscal year as a result of U.S. policy changes
• The cross-border e-commerce logistics company is seeking a valuation multiple that’s many times higher than far larger peers like S.F. Holding and UPS

By Doug Young

Sometimes delivery is all about timing. That’s certainly the case with World Road Inc., a Chinese supplier of cross-border e-commerce logistics services, which filed an updated prospectus this week for a Nasdaq IPO. The company first filed for its listing in May last year, back when shipping e-commerce items from China to the rest of the world was all the rage. But much has changed since then, which is painfully apparent in World Road’s latest financials.

The company is making the IPO bid into an environment fraught with obstacles and uncertainties. The biggest of those is coming on the trade front, as the U.S. and Europe take steps to tamp down the flood of Chinese imports pouring into their markets. But there are also political obstacles, as the U.S. and China both crack down on suspicious “pump and dump” Chinese IPOs on Wall Street. 

That crackdown is reflected in World Road’s notable quadrupling of its fundraising target in its latest IPO application. The company says it now plans to raise about $33 million in a Nasdaq listing by selling 6 million shares for between $5 and $6 each. In its original filings last year, the target was much lower, aiming to raise around $7.5 million by selling 1.5 million shares for between $4 and $6 each.

The big fundraising increase looks directly related to a new Nasdaq rule that took effect this year, requiring all Chinese companies making new listings on the exchange to raise at least $25 million. World Roald’s new fundraising target meets that threshold, though it’s far from clear this listing will make it to market.

The company still needs to get clearance from the Chinese securities regulator, which it said is still pending. That regulator, the Chinese Securities Regulatory Commission, has also emerged as an important gatekeeper trying to screen out potential “pump and dump” IPOs that were giving China a bad reputation on Wall Street.

A typical case came from a company called Pomdoctor (POM.US), which sold IPO shares last October for $4 each. The stock initially rose above $5, until one day in December, when it suddenly tanked to $0.50 from its $5.42 close the previous day. The stock has never recovered since then, last closing at about $0.83 on Thursday.

A big factor behind such spectacular crashes is inflated valuations at the time of the IPOs, which could also be the case with World Road. A pricing at the middle of its range would value the company at about $190 million, which, when combined with sales from its latest fiscal year, gives it a price-to-sales (P/S) ratio of about 3.3. While that’s not huge, it’s quite a bit higher than the 0.39 for S.F. Holding (6936.HK; 002352.SZ), one of China’s top logistics providers, and 0.93 for global giant UPS (UPS.US).

That immediately puts World Road’s shares in danger of collapse if and when the company completes its IPO, since there’s no apparent reason why it should be valued so much higher than these industry leaders.

Deteriorating financials

Making matters worse, World Road’s latest financials hardly look too encouraging. Things were quite different when the company, based in the Central Chinese city of Wuhan, first filed its IPO prospectus in May last year. Back then, it boasted booming revenue that more than tripled to 464 million yuan ($69 million) in its fiscal year through March 2025 from 130 million yuan the previous year.

At that time, cross-border e-commerce of products flowing from China to the rest of the world was booming, much of that conducted over major platforms like Shein, Temu, TikTok and AliExpress. Another factor driving the boom was the rise of Chinese brands that were finding success in Western markets, such as Anker, Aukey and Ugreen.

But in February last year the U.S. eliminated a loophole that had previously allowed packages worth less than $800 coming from China to enter the country duty-free. Europe took a similar step by imposing a temporary 3 euro customs duty on packages containing goods entering the bloc worth 150 euros ($174) or less from February this year. Such goods had also previously been allowed to enter duty free.

As those policies took effect, World Road’s revenue fell 18% to 381 million yuan year-on-year during its fiscal year through March 2026. It predicted things would continue to worsen before they get better.

“We anticipate further revenue decline over the next 12 months due to competitive pressures and uncertainties within the economic environment,” it said in its prospectus. “Unstable tariffs on Chinese imports introduced in April 2025 are expected to disrupt cross-border trade.”

Logistics has never been a very profitable business to start with, which is reflected in World Road’s low gross margins. What’s more, its gross margin has been dropping steadily amid all the cross-border trade frictions, falling to 6.2% in its latest fiscal year from 6.4% the previous year and 7.1% the year before that.

On the bottom line, World Road’s profit fell 3.7% in its latest fiscal year to just 8.6 million yuan from 8.93 million yuan a year earlier. The smaller rate of profit decline compared with the company’s revenue decline owed mostly to aggressive cost cutting, which is commendable but hardly a reason to be positive about this company.

It’s also slightly notable that the name of World Road’s IPO underwriter is redacted in the latest prospectus, unlike earlier versions that named Craft Capital Management and R.F. Lafferty. That’s significant because in March a U.S. congressional committee sent letters to three other small investment banks looking into their potential role in underwriting suspicious IPOs by small Chinese companies. So it’s not surprising that these small underwriters want to stay as low-profile as possible, and would quite likely flee from any Chinese listing at the first sign of trouble.

It’s obviously too early to say if that kind of trouble is on the horizon for World Road. But the high valuation it’s seeking, combined with its deteriorating finances, certainly don’t bode well for its IPO.

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China’s securities regulator has given the green light to the battery materials maker’s Hong Kong listing application, but only after a year of scrutiny

Key Takeaways:

• Tinci Materials has been approved by China’s securities regulator to list in Hong Kong, reporting a sharp decline in profitability from the first quarter to the second
• The regulator asked for more details after the battery materials maker filed its first listing application a year ago, before giving its consent last month

By Edith Terry

The road to a Hong Kong IPO has been anything but smooth for Shenzhen-listed Guangzhou Tinci Materials Technology Co. Ltd. (002709.SZ), the world’s top maker of materials for electric vehicle (EV) batteries. The deal could be quite large, potentially raising $1 billion or more, which may have made regulators more cautious in granting approval.

Last October, the China Securities Regulatory Commission (CSRC) asked for more details a month after Tianci first applied for the Hong Kong listing.  A year later, in an announcement dated Aug. 18 but published last Friday, the regulator finally approved the listing plan, with Tianci aiming to sell about 413 million shares in Hong Kong.

The lengthy review is just the latest bump in the road to Tianci’s Hong Kong listing, as the company’s own profitability showed signs of deteriorating this year amid growing signs of oversupply in China’s fast-growing EV battery sector.  

Despite all those challenges, investors in the company’s Shenzhen-listed shares reacted with guarded enthusiasm to the CSRC approval, bidding Tinci’s stock up by 2.4% over the next three trading days after the announcement last week.

That gave Tianci, whose shares are still down nearly 30% this year, a market cap of about 67 billion yuan ($10 billion) and a price to earnings (P/E) ratio of 17. By comparison, shares of peer Capchem Technology Co (300037.SZ) have risen by over 40% this year, giving it a P/E ratio of 36 despite its smaller size.

Tianci last submitted a publicly available prospectus for the Hong Kong IPO in March, and has yet to submit a new public document to the Hong Kong Stock Exchange following the CSRC approval. But it may have submitted an updated prospectus under a recent rule change that allows some companies to make confidential filings.

Market leader

With roughly 36% of the global market for the electrolytes that are a key component in lithium-ion batteries, Tinci has a commanding position in the EV supply chain. In its March listing document, the company pointed out it is “proactively positioned” in the advanced materials supply chain not only for intelligent driving, but also other emerging areas like low-altitude aircraft and AI-related thermal management.

That said, its profit and revenues are quite variable, fluctuating with a battery market that is fast exhibiting signs of oversupply following a rapid buildup in capacity. Reflecting that, Shenzhen-listed shares of leading EV battery maker CATL fell 10% over two days earlier this week, their steepest decline in over a year, amid the latest signals that the company may be preparing to scale back its production.

Tinci has lots riding on the EV battery market. It was the world’s top electrolyte supplier for lithium-ion batteries last year, the ninth consecutive year in that position. It supplied eight of the world’s 10 top battery manufacturers, all top 10 energy storage system (ESS) battery makers, and nine out of the top 10 consumer battery manufacturers.

Its financials reflect its leading position, though they’ve been as bumpy as the road to its Hong Kong listing. Its profit tumbled 74.4% in 2024 to 483.9 million yuan from 1.89 billion in 2023, thanks to increased competition that led to a slump in lithium battery material prices. Its revenue dropped by 18.7% that year to 12.52 billion yuan from 15.4 billion yuan the year before.

Both its revenue and profit rebounded last year, the former up by 33% to 16.7 billion yuan, and the latter nearly tripling to 1.36 billion yuan. The company’s revenue continued to rebound this year, growing 91% in the first quarter year-on-year and by an even stronger 127% in the second. But its profit sputtered amid falling prices, rising by just 5.2% in the second quarter after a more than 10-fold increase in the first.

Booming EV market

The strong revenue gains come on the back of a global boom for EV sales. The International Energy Agency predicts that 23 million electric cars will be sold in 2026, representing 29% of all car sales. Robust sales in emerging markets this year have counterbalanced weak sales in China and North America, with Southeast Asia among the growth leaders.

Tinci leads in a global electrolyte market worth an estimated at $15.84 billion this year, according to Mordor Intelligence. The company has a current capacity of 860,000 tons of lithium battery materials annually, and is adding another 200,000 tons over the next two years in the U.S. state of Texas, with another 150,000 tons in Morocco.

The company has also been moving beyond battery materials into specialty chemicals for personal care. But at 686 million yuan in the first half of this year, the segment still represented just 4.7% of its revenue for the period. Over the same period, revenue from its core lithium-ion battery materials rose 117.2% year-over-year to 13.69 billion yuan, accounting for 93% of the total.

Both the CSRC and Hong Kong’s Securities and Futures Commission (SFC), as well as the listing committee of the Hong Kong Stock Exchange, have been putting more pressure on listing candidates and their underwriters recently to improve their disclosure quality, amid one of Hong Kong’s strongest IPO markets in years. That may partly explain why Tianci’s listing took so long to get the CSRC’s approval, despite the prestige of having big names like JPMorgan and Citic Securities among its joint sponsors.

The CSRC recently asked nine Chinese companies seeking Hong Kong listings to provide additional information on their shareholding structures and litigation, while the SFC recently suspended shares of biotech firm Cloudbreak Pharma over concerns about IPO manipulation.

With some 500 applications now on the Hong Kong Stock Exchange’s website, and HK$651 billion ($97 billion) in funds raised from IPOs and secondary listings in the first eight months of the year, caution may be warranted. At the same time, the Stock Exchange launched its biggest listing reforms in July in nearly a decade, reducing financial and market capitalization thresholds for companies with weighted voting rights and introducing confidential listing applications.

It’s possible Tinci took advantage of the new procedures to file an updated prospectus confidentially, giving the exchange time to make sure the document is not only up to date but meets its criteria for high quality. “Regulators care more about bringing in high-quality companies with real investment value than about simply racking up the number of listed companies,” Hang Wang, chief representative in Beijing of international law firm Baker McKenzie told the South China Morning Post in a recent interview.

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The vision sensor maker is exploring a Hong Kong listing as weaker sales to core client Ant Group and rising development costs weigh on its revenue and profits

Key Takeaways:

• Orbbec’s revenue growth slowed from 104.1% in the first half of 2025 to just 0.5% in the same period this year, even as its robot-vision sales more than doubled
• Higher spending on research, sales and administration has tested the company’s recent return to profitability

By Hu Minghe

Artificial brains that tell them where to go, what to do and how to do it may be the most important component in an emerging generation of humanoid and industrial robots. But also important are the sensors that help them execute those actions.

An emerging maker of those components is Orbbec Inc. (688322.SH), whose vision sensors help robots “see” where they are going and what they need to pick up. Now, the company is hoping to see its way to a Hong Kong IPO, complementing its existing Shanghai listing, as it searches for new investors to feed its research-heavy operation.

The company announced it was exploring a Hong Kong listing as early as July, following a recent trend by companies already listed on China’s domestic markets in Shanghai and Shenzhen seeking to tap Hong Kong’s more international investor pool.

Shenzhen-based Orbbec looks like a potential beneficiary of the movement by smarter machines into factories, warehouses and everyday life. But while its robotics business is growing rapidly, its latest financial report tells a less exciting story.

The company’s revenue barely rose in the first half of 2026, up just 0.5% to 437.6 million yuan ($65.2 million). That represents a huge slowdown from the 104.1% growth to 435.5 million yuan in the first half of 2025. Orbbec’s profit in the first half of this year also fell 30.8% to 41.6 million yuan.

The gap between booming enthusiasm for its robotics and Orbbec’s overall lackluster results reflects the company’s own transition from its current business mix and the one it is trying to build. Its cameras and other vision products traditionally performed more mundane functions like scanning and payment applications, a relatively mature business. Gains in newer, high-growth areas like robotics have yet to replace lost sales in those more mature areas, while the cost of developing and selling new products keeps rising.

That puts pressure on a turnaround that has only recently taken hold. Orbbec earned a profit of 127.9 million yuan on revenue of 940.7 million yuan in 2025, its first annual profit since listing on Shanghai’s STAR Market in 2022.

Robotics reboot

There are good reasons for its recent move into robotics. Advances in AI are helping robots learn tasks and respond to spoken instructions, raising the prospect of machines that can handle more varied work. Businesses also want automation to fill labor gaps and take over repetitive jobs, according to the International Federation of Robotics. Cameras such as Orbbec’s, which measure distance and identify objects’ positions, supply information those machines need to act on their surroundings.

Its latest financial report names Chinese humanoid robot maker Leju among Orbbec’s camera customers. Another customer for its sensors is reportedly the high-profile Unitree, whose humanoids and robot dogs have capture public imagination with their acrobatics and other performances, according to Chinese media.

But such high-profile demonstrations are largely for show and don’t often result in large orders. Instead, Orbbec’s management points to robots performing more mundane tasks like cleaning, delivery and materials handling as nearer-term opportunities because their work is relatively standardized.

Meanwhile, the company’s older applications, while less sexy, still matter. Orbbec attributed much of its first-half growth last year to products used for scanning and payments. Meantime, management has said uneven demand for traditional biometric applications like face and fingerprint recognition were holding back overall revenue growth.

Ant Group, the Alibaba affiliate behind Alipay, is a key customer and major cause behind this year’s sales slowdown. Orbbec’s sales to Ant and its affiliates fell to just 53 million yuan in the first half of 2026 from 130.9 million yuan a year earlier. Sales to other customers rose 26.3% over that time, adding roughly 80 million yuan. But that barely replaced the 78 million yuan in lost business from Ant.

Orbbec says its robot-vision revenue more than doubled in the first half of this year, without disclosing the amount. The strong growth is encouraging, though the failure to give a sales figure means its contribution is probably still relatively small.

Sales slowdown

Orbbec’s slowdown actually dates back to last year, when revenue growth eased to about 6% in the final quarter of 2025. It grew by a similar amount in the first quarter of this year, before slipping into contraction in the second quarter. As that happened, the company’s profit also swung from growing by 27.5% year-on-year to 31 million yuan in the first quarter of 2026, to plunging 70.3% to 10.6 million yuan in the second.

On a more positive note, the company’s gross margin improved from 41.3% in the first half of 2025 to 48.5% in the first half of 2026 as higher-margin products made up more of its business. But expenses, whose growth is outpacing revenue growth, ultimately undermined the company’s profits. In particular, R&D spending rose 22.2% to 111.4 million yuan, consuming about a quarter of revenue.

Management is asking investors to be patient, arguing that years of development are beginning to pay off. The company is also expanding into equipment that records demonstrations used to train robots. Last month, it announced a partnership with robotics startup Lingchu Intelligence, also known as PsiBot, to combine its recording hardware with the startup’s data software. The aim is to make collecting and managing robot-training data easier, opening another market for Orbbec’s hardware.

Funding that expansion is probably a factor behind Orbbec’s potential Hong Kong listing. The company raised 980 million yuan via a share placement through its Shanghai listing in June, mainly for research and manufacturing projects with a combined budget of nearly 2 billion yuan. It is also building a Vietnam factory expected to begin production in 2027.

Bocom International still expects the company to bounce back from its recent revenue and profit contractions. The bank cut its 2026 revenue forecast for Orbbec by 24% in August, but its revised estimate of 1.23 billion yuan would still represent growth of about 30% from 2025. It expects new robot-vision and training-data products to help sales in the second half of the year.

Investors already place considerable value on that potential. Orbbec currently trades at about 39 times 2025 sales, even after its shares fell about 40% over the last two months. That’s well ahead of the roughly 26 times for Mech-Mind (9615.HK), the industrial robot-vision company that listed in Hong Kong this month. Orbbec had more than twice its rival’s revenue in 2025, although their business mixes differ.

A Hong Kong listing could give Orbbec more money to pursue the robot opportunity that looks like the best bet to jumpstart its growth. Whether its robotics business can grow fast enough to replace lost sales elsewhere and translate to stronger profits remains the open question for Hong Kong investors.

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The property developer received regulatory approval this month to issue a commercial real estate investment trust, or REIT

Key Takeaways:

• Seazen plans to raise funds through a real estate investment trust whose main assets will comprise two of its shopping malls
• The plan, which has been approved by the Chinese securities regulator, is expected to raise 1.5 billion yuan in much-needed funds

By Lau Chi Hang

Call it a timely lifeline from the same government that sent China’s property developers into crisis when it abruptly cut off their access to easy credit with its “Three Red Lines” policy in 2020.

In a strategic effort to stabilize the market, Beijing has been aggressively advocating development of real estate investment trusts (REITs) to help debt-stricken developers raise much-need cash. The program allows developers to monetize their existing properties by securitizing them as REITs, then using the cash raised to alleviate their heavy debt obligations. REITs also offer another option for investors still wishing to bet on the property sector, paying out their profits as regular dividends.

Since the milestone launch of the program in 2021, some 80 new REITs have helped companies raise a massive 220 billion yuan ($32.8 billion) in combined funds. One of the latest is Seazen Group Ltd. (1030.HK), which this month announced plans for a new REIT anchored by two of its large shopping malls.

$230 million fundraising

The two malls are Seazen’s Qidong Wuyue Plaza and Tianning Wuyue Plaza, both located in East China’s Jiangsu province, according to its announcement. The pair of properties have gross floor areas of 80,353 square meters and 123,394 square meters, respectively. The company expects to issue 500 million fund units, with a target of raising about 1.54 billion yuan ($230 million).

The appointed REIT manager has obtained a formal “no-objection” letter for the listing from the Shanghai Stock Exchange, as well as an official registration approval from China’s securities regulator. Seazen said fundraising activities will commence within the next six months, with the company holding 34% of the overall offering.

When compared to other heavily indebted developers, Seazen's situation is far better. Most importantly, its debt burden is considerably lower than its peer.

Seazen’s latest financial results show its net debt-to-equity ratio stood at a manageable 57.1% at the end of June this year. With short-term liabilities amounting to 10.8 billion yuan and 7.85 billion yuan in cash, the company's immediate funding gap is less than 3 billion yuan. That means the fresh 1 billion yuan it expects to raise from the REIT should be useful in helping to meet its short-term financial needs.

Misappropriated funds

Seazen's on-balance sheet debt doesn’t look bad on the surface, but some investors may remain concerned about potential undisclosed problems. That wariness owes in no small part to past related-party transactions between the company and its property management subsidiary, S-Enjoy Service Group (1755.HK).

The event that raised eyebrows traces back to March last year, when S-Enjoy abruptly delayed the publication of its financial results and saw its shares suddenly suspended from trading. Alarming discrepancies were subsequently revealed across five of its corporate bank accounts, involving massive intercompany lending totaling about 7 billion yuan improperly provided to Seazen.

In response, S-Enjoy executive director Yang Bo resigned from all his positions at the company. Later, three other non-executive directors resigned as well.

Investors suspect that Seazen had run into severe cash flow constraints, which led it to hit up its own property management arm in a desperate bid to ease its mounting financial pressure. While Seazen subsequently returned the funds, the broader market's confidence in management was significantly undermined, raising doubts about the company’s true financial health and accuracy of its past financial statements.

Falling property sales

Like its peers, Seazen's situation continues to deteriorate in lockstep with China’s sputtering property market. The company’s revenue sank 20.2% year-over-year to 17.69 billion yuan in the first half of 2026, while its profit fell 12.1% to 608 million yuan.

Seazen has tried slashing operating costs to stabilize its ship. Its corporate sales and marketing expenses fell by nearly 32% year-on-year to 670 million yuan in the first half of this year, and its administrative costs fell 12.7% to 1.18 billion yuan. Without such cuts, the company’s falling profitability would have been even worse.

Seazen’s core residential property business continues to decline. In the first seven months of this year, its total contracted sales plunged 40% to 7.22 billion yuan from 11.98 billion yuan a year earlier. Over that period, the gross floor area of its sales also dropped 25% to 1.17 million square meters from 1.55 million square meters the previous year.

The company emphasizes that revenue from its commercial property operation is growing, reaching 7.11 billion yuan in the first half of this year, up 2.4% year-over-year. That part of its business now accounts for more than half of its revenue, a sharp reversal as the commercial property market fares comparatively better than the residential market that used to be Seazen’s biggest breadwinner.

In the first half of this year, its shopping mall portfolio expanded to 181 properties, up by seven from the 174 properties it had a year earlier. But revenue from those commercial properties rose by less than 3% year-over-year, suggesting actual average revenue per mall definitively declined this year.

While the company’s REIT spinoff, combined with its nearly 8 billion yuan in cash, is roughly enough to service its short-term debt obligations, the fact remains that Seazen still holds a massive 44.63 billion yuan in outstanding long-term borrowings. On the one hand, the company currently operates nearly 200 completed shopping malls that could potentially be used as assets for new fundraising. But it’s impractical to think it will be able to keep spinning off more of those as REITs over the short term.

What’s more, the value of its real estate assets continues to shrink, forcing it to record a valuation loss of 203 million yuan in the first half of this year. Such write-downs are likely to continue in the current market where prices continue to fall due to oversupply, even as the central and local governments take new steps to support prices. If that continues, which seems inevitable, the company's net debt-to-equity ratio – currently its pride and joy among its peers – is bound to creep upward.

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With 20 brands in 33 countries, the Philippine fast-food operator has abandoned earlier plans to list its international operation in New York in favor of its nearby neighbor

Key Takeaways:

• Jollibee calls Hong Kong “a natural market” for listing its international operation, reversing its previous commitment to a U.S. IPO
• The Hong Kong Stock Exchange’s recent reforms and access to Mainland Chinese investors helped to seal the deal

By Edith Terry

A regional fast-food giant unfamiliar to many is creating a buzz around its new plan to give Hong Kong investors a taste of its international operation. 

When Jollibee Foods Corp. (JFC.PS) first announced its plans to separately list its international operation early this year, it said it was headed for Wall Street. But nine months later, the Philippine giant has reversed direction to declare the listing, which accounts for about 40% of its revenue, will be on the Hong Kong Stock Exchange, according to a filing last week with its home stock exchange in the Philippines.

The spinoff and separate listing would give global investors a taste of what’s arguably one of Asia’s most successful regional fast-food operators, with 20 brands in 33 countries. Its footprint of around 10,700 stores under various brands is one of the region’s largest. But that network has also shown signs of stumbling lately following Jolibee’s series of more than $1 billion in acquisitions over the last two decades.

The announcement described Hong Kong as “a natural market” for listing the global operation, to be called Jollibee Food Corp. International (JFCI), given the depth of the company’s presence and brand recognition across Asia. Jollibee added that Hong Kong as a listing venue is “best suited to JFCI’s business, geographic footprint, and investment profile.”

Jollibee has a current market cap of about $2.85 billion, meaning its international operation could be worth about 40% of that, or about $1.14 billion. By comparison, Yum China (YUMC.US; 9987.HK), which operates the KFC and Pizza Hut brands in China and has nearly 20,000 stores, is currently worth a much larger $14.5 billion.

Jollibee’s current shareholders have waxed hot and cold over the spinoff plan. The stock rose sharply on Jan. 6, at the time of the original announcement, only to later give back all the gains and more. Under the listing plan, the company’s current shareholders will receive shares in JFCI in proportion to their current holdings, with Jollibee Foods Corp. continuing to trade on the Philippine Stock Exchange.

Growing appeal of Hong Kong

Jollibee is one of a growing number of companies choosing Hong Kong for their listings over more traditional destinations like the U.S., as the city has taken a steady series of steps in recent year to become more company friendly. Among its latest steps, the exchange introduced a confidential filing system in July, as an alternative to the mandatory system of making all filings for new listings public. Since then, it has also temporarily waived its rule requiring companies to complete their IPOs within six months of making their first filings.

Those efforts are bearing fruit in attracting companies from around the region. Thai coconut water brand IFBH chose to list in Hong Kong in June 2025, abandoning earlier plans to list in Singapore. It has been joined this year by other Southeast Asian listings, including PT Merdeka Gold Resources Tbk, and BBSB International, a Malaysian construction company.

Jollibee hasn’t given a timetable for its Hong Kong listing, though it doesn’t seem to be in any hurry. One reason for that could be related to the company’s recent inner workings, which have all the markings of a typical family business. Jollibee founder and Chairman Tony Tan Caktiong, 73, runs the company with brother, Ernesto Tanmantiong, its president and CEO. Another brother, William Tan Untiong, is company secretary. Their sister’s husband, Antonio Chua Poe Eng, is also a director.

Just last year, Tony’s 45-year-old son, Carl Brian Tancaktiong, came back from a disappointing stint as chairman of Jollibee’s China operation, which has been struggling. He may need more time to work with the company’s relatively new CFO, Richard Chong Woo Shin, who has been tapped to run the international unit.

Shin, a Canadian, joined the company in 2022 after financial roles with a range of consumer brands, including aquaculture company Grobest, whiskey distiller Willam Grant & Sons, Ralph Lauren Asia Pacific and Bacardi Martini Asia Pacific.

Expansion through M&A

Jollibee may also be re-examining the speed of its rapid regional expansion, much of it through M&A. The company has closed 27 cross-border deals worth around $1.1 billion since 2000, including U.S. brands such as Denver-based Smashburger and Coffee Bean and Tea Leaf, as well as South Korea’s Compose Coffee, according to Bloomberg.

The spinoff will give investors a sharper picture of how all of these pieces in Jollibee’s offshore empire are doing. But the macro signs suggest there’s some overheating. Jollibee’s global revenue in 2025 was 305.1 billion Philippine pesos ($4.8 billion), up 13% over 2024, while its net income of nearly 11 billion pesos was flat. Its net income margin fell by 0.4 percentage points, from 4% in 2024 to 3.6% in 2025. The revenue growth continued this year, rising 9.9% in the first half to 162 billion pesos, even as its profit slipped into contraction with a 16.7% decline to 4.9 billion pesos.

As its net income declined, Jollibee reduced an earlier target for new stores additions in 2026. It now aims to open 1,000 to 1,100 new stores during the year, down from original plans for 1,200 and 1,300. It closed 207 stores in the first six months of 2026, and also cut its target for operating income growth to between 10% and 15%, down from an original 15% to 18%.

International analysts tend to attribute Jollibee’s success partly to its ability to tap the Philippine diaspora. But its real achievement outside its home market is its ability to cater to local tastes by adapting its signature Jollibee brand, as well as its other 19 brands, to each local market.

Jollibee was founded in 1975 by Tony Tan and his wife, Grace, who had both just graduated from the University of Santo Tomas with degrees in engineering. In their early 20s, they bought a Quezon City franchise operation of Magnolia Ice Cream, owned by Philippine conglomerate San Miguel Corp., for $7,000. Three years later, they dropped the Magnolia franchise and began selling “Yum Burger” hamburgers, before adding other options like fried chicken and spaghetti.

They won big in their home market. In 2024 the Jollibee brand controlled over 50% of the fast-food market in the Philippines, according to third-party research. But it also operates other brands as varied as Burger King, Panda Express and Tiong Bahru Coffee in the Philippines. By 2025, the company had 1,341 outlets in its home market under the Jollibee brand, ahead of 851 for McDonald’s (MCD.US) and 430 for KFC.

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Following back-to-back listings by Z.AI and MiniMax, the startup behind the Kimi chatbot is reportedly seeking a $50 billion valuation through a Hong Kong IPO

Key Takeaways:

• Moonshot has reportedly submitted a confidential filing for a Hong Kong IPO, seeking to raise $3 billion at an astronomical $50 billion valuation
• The move aims to tap into Hong Kong’s deep capital pool as the company behind the Kimi chatbot needs large funding to run its costly operations

By Warren Yang

When it comes to corporate naming, Chinese AI pioneer Moonshot AI certainly doesn’t lack ambition. Now, the Beijing-based startup behind the wildly popular Kimi chatbot is attempting a meteoric leap of its own.

Last week, Moonshot, founded just three years ago, reportedly submitted a confidential filing for a Hong Kong IPO, seeking to raise $3 billion at an astronomical $50 billion valuation. If successful, Moonshot will stand alongside peers Z.AI Co. Ltd. (2513.HK), also known as Zhipu, and MiniMax Group Inc. (0100.HK) as the leading-edge of Chinese large language model (LLM) startups going public.

The companies rely on private equity and capital markets to fund their hugely expensive operations, set apart from other major large model developers like Qwen and Doubao, which have the backing of internet giants like Alibaba and ByteDance.

Moonshot’s choice of Hong Kong over Shanghai or Shenzhen signals its desire to go for deep offshore institutional capital, similar to MiniMax and Z.AI. For an AI developer that needs billions of dollars to bankroll high-end computing hardware, cloud infrastructure and top-tier engineering talent, the vast international funding pool that Hong Kong offers should be an irresistible draw.

In addition to its deep funding pool, Hong Kong’s Chapter 18C listing regime, designed specifically for specialist technology companies, provides a clear regulatory pathway for IPOs by commercial-stage high-tech firms that are still pouring heavy capital into R&D.

Under traditional rules, companies must demonstrate a track record of net profits or substantial revenues before they can list in Hong Kong. Chapter 18C removes these hurdles by creating tailored entry criteria for high-tech sectors like AI. That allows fast-growing AI pioneers like Moonshot to raise public capital to fuel their costly expansion without waiting years to show profits. Listing in Hong Kong can also help Chinese startups raise their international profiles as they look to market their products abroad.

Surging valuation

Moonshot has certainly lived up to its name in terms of its surging valuation. The company was worth $4.3 billion during a funding round late last year, and the figure more than quadrupled to $20 billion by May. Now, it’s aiming to more than double that just months later with a target of $50 billion.

The driver behind its explosive ascent is the monetization of its Kimi series of large language models, with its annualized recurring revenue tripling to $300 million in June from just three months earlier, according to media reports.

A key appeal of Moonshot’s products is that they dramatically cut computing expenses by running an efficient design that activates only the necessary parts of its AI system for any given job. Because the model uses much less computing power and memory, Moonshot can deliver premium-quality products to corporate clients at a fraction of the prices charged by Western competitors. Kimi’s ability to process ultra-long text at low costs has made it an attractive proposition for anything from financial analysis to legal reviews and software code generation.

Despite their impressive growth, Moonshot and its Chinese peers face greater difficulty raising funds than their Western competitors. As a result, while Silicon Valley leaders regularly secure multibillion-dollar funding rounds, top Chinese startups have to operate on leaner balance sheets.

Expanding restrictions on Western institutions investing in Chinese tech firms amid rising U.S.-China tensions are widening this funding gap. Lacking easy access to foreign mega-funding, Chinese AI developers are forced to rely on a much smaller pool of domestic capital from local funds, state-backed guidance vehicles, and tech giants like Alibaba and Tencent.

So Moonshot is following in the footsteps of Z.AI and MiniMax, which made back-to-back debuts in Hong Kong’s equity market at the start of this year to become the first pure LLM makers to go public in the financial hub.

AI hype

Z.AI raised HK$4.35 billion ($559 million) in early January, and MiniMax took in HK$4.80 billion the next day. Both offerings were oversubscribed more than 1,000 times by retail investors, underscoring overwhelming demand for pure AI plays. The duo didn’t stop there. They launched much larger follow-on share placements immediately after their six-month lockup periods expired in July, with Z.AI securing HK$33.6 billion, the largest amount ever for a secondary equity offering in Hong Kong, and MiniMax raising a fresh HK$16 billion.

Moonshot isn’t alone in trying to capitalize on the AI hype. Among others, 01.AI has undertaken a corporate restructuring as it works towards a Hong Kong listing next year. Baichuan Intelligent Technology, founded by Sogou search engine creator Wang Xiaochuan and backed by Alibaba and Tencent, is exploring a path to a dual listing on China’s domestic A-share markets and in Hong Kong, while StepFun, led by former Microsoft executive Jiang Daxin, is targeting a Hong Kong IPO this year or next.

This rush, however, may end up creating a glut of AI stocks, making investors more selective. That means financial and technical realities will become an increasingly important differentiator.

The annualized recurring revenue metric thrown around by AI startups often blurs the line between traditional software-as-a-service (SaaS) subscription revenue and simple annualized run rates derived from monthly usage.

Because LLM consumption can fluctuate significantly based on short-term developer experimentation or promotional credits, an annualized run rate may overstate long-term revenue durability.

Furthermore, cloud infrastructure costs are a significant drag on developers’ profitability. Unlike traditional software vendors that enjoy fat gross margins, LLM makers face enormous, ongoing server and power expenses to run workloads at scale. At the moment, Moonshot isn’t profitable because of these heavy costs, with the low prices it charges for its products further undercutting its margins.  

In scrutinizing Moonshot’s prospects, investors will want clear visibility into metrics like customer retention rates and gross margins after server and bandwidth costs.

Moonshot’s ambitious IPO plan may materialize, but to satisfy public shareholders over the long haul, it will need to prove that it will eventually be able to turn durable bottom-line profits. Both Z.AI and MiniMax are also loss-making, but their shares command sky-high valuations. Z.AI shares trade at a price-to-sales (P/S) ratio of a whopping 577, while the figure for MiniMax is about 175.

Achieving a $50 billion valuation would require a similarly high multiple, and Moonshot may well succeed in that regard. But if it fails to generate significant cash on its own, and keep the figure growing at triple-digit rates over the near-term, its valuation could come back down to earth as dramatically as the moonshot behind its name.

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The marketing services company has abandoned its listing on Beijing’s NEEQ market and is looking to Hong Kong in a bid to attract international capital

Key Takeaways:

• Shanghai Vision Star has applied to list in Hong Kong, reporting its profit surged by 186% in the first quarter of 2026
• The market services company's gross margin remained low at just 4.1% in the first quarter

By Bai Xin Rui

The rise of social media platforms like Douyin,  Weibo and RedNote, with their short video capabilities, has replaced traditional media, driving a parallel change in marketing services over these newer channels. One company from that new generation of marketing services providers, Shanghai Vision Star Media Co. Ltd., is now seeking a place in the financial spotlight with its recent application to list in Hong Kong.

Established in 2011, Star Media started off in IP-based brand marketing, before expanding into social media, performance-based advertising placement, livestream e-commerce and overseas cross-border marketing to offer more comprehensive services.

The company was previously listed on the thinly traded, over-the-counter-style National Equities Exchange and Quotations (NEEQ) board in Beijing from 2015 to 2023. But it terminated that listing in April 2023, and hopes to re-list in Hong Kong, citing working capital requirements and a desire to raise its global profile and pursue international capital.

Two major revenue streams

Vision Star derives its revenue from five major areas, including: IP-based brand marketing services; celebrity and influencer marketing services; performance-based marketing services; livestream e-commerce marketing services; and overseas marketing services, according to its listing document. Among these, IP-based brand marketing services and performance-based marketing services are its two biggest cash cows, accounting for 49.2% and 38.4% of its revenue, respectively, in the first quarter of 2026.

IP-based brand marketing services are not only Vision Star's original business, but also accounted for more half of its revenue in both 2024 and 2025 before dipping below the 50% threshold this year. Its IP-based brand marketing services involve assisting clients in embedding their brands into various IPs. Throughout the process, the company matches suitable IPs based on different brand positionings and product characteristics, and coordinates the planning and execution of marketing campaigns across multimedia channels to further enhance brand exposure and recognition.

That business segment has logged impressive revenue growth, including a 34% year-on-year increase in the first quarter of 2026 to 1.13 billion yuan ($168 million).

The second top revenue source provides performance-based marketing services to clients seeking customer acquisition and quantifiable conversion results. Revenue from such services, which typically involve the placement of ads on domestic media platforms, has grown even faster, rising 67% year-on-year to 884 million yuan in the first quarter of this year.

Strong growth from those two core segments helped to lift Vision Star's total revenue by 44.1% in the first quarter to 2.31 billion yuan, while its net profit nearly tripled to 20.83 million yuan. Despite its status as an asset-light company, Vision Star’s reliance on third-party platforms to serve its clients translates to low gross margins – a common feature of marketing services companies. Its gross margin stood at just 4.1% in the first quarter of this year, which is even lower than asset-heavy industries like infrastructure stocks, which typically range from 8% to 10%, and property stocks, which average 9% to 14%.

Subpar gross margins

Vision Star’s core revenue generator, its IP-based brand marketing service business, had an especially low first-quarter gross margin of just 3.8%. Its performance-based marketing services segment, its second biggest breadwinner, was even worse with a gross margin of just 1.7%.

The low margins also owe to the hugely competitive market for such services, since barriers to entry are low. Despite ranking fifth in China for integrated marketing solutions Vision Star holds just 0.4% of the market, reflecting the high degree of fragmentation and stiff competition. The industry leader holds just 3.7% of the market, and the top 10 players collectively hold just 8.2%. Price wars are common in such a fragmented, competitive landscape, which will only further squeeze Vision Star's gross margin and bottom-line profit.

Fortunately for everyone, China's marketing solutions market continues to grow at a healthy pace, rising from 1.18 trillion yuan in 2020 to 1.87 trillion yuan in 2025, equal to nearly 10% annual growth. Boosted by ongoing development of social media, short-video platforms, and content e-commerce, as well as rising demand for marketing services over those channels, the market is expected to further grow to 2.95 trillion yuan by 2030.

In such a low-margin and highly competitive landscape, one of Vision Star’s greatest assets is its full suite of marketing services. That, combined with its relatively large size, helps it secure advantageous position for its clients in the sea of short videos and social e-commerce now flooding the Chinese market. With China's marketing services market fast approaching the 3 trillion yuan threshold, the company looks well positioned to profit from a rising tide that lifts all boats, especially the larger ones.

Its new pivot to a Hong Kong listing could help to bolster its position if it can leverage the global capital market to extend its reach beyond just China. How the company manages to improve its gross margin through more efficient operations, while simultaneously growing its revenue, will be the key to determining whether it can command a long-term valuation premium over its listed peers.

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The provider of compliance services for cross-border e-commerce companies has filed to list in Hong Kong, boasting 66% revenue growth in the first half of this year

Key Takeaways:

• Vatai Holdings has applied to list in Hong Kong, providing a fresh, high-growth angle to the maturing e-commerce story by focusing on fast-growing cross-border trade
• The company’s Americas revenue growth slowed sharply last year after the U.S. eliminated an import tax loophole, exposing one of Vatai’s few vulnerabilities

By Doug Young

E-commerce as a category feels a bit like yesterday’s news, with giants like Alibaba and Amazon failing to generate as much excitement as they did a decade ago. One exception to that rule is cross-border e-commerce, which has been booming in the last few years as a growing number of Chinese merchants and brands sell their products directly to consumers across the globe.

One company well positioned to profit from that boom is Vatai Holdings Ltd., which provides compliance services for companies engaged in cross-border e-commerce and last week filed to for a Hong Kong IPO. While big names like Temu and Shein have captured headlines for their ability to sell Chinese goods directly to consumers around the globe, Vatai caters to the thousands of smaller e-commerce companies engaged in such cross-border e-commerce.

Specifically, the company had 246,245 paying customers last year, up 47% from the 167,133 it had a year earlier, showing just how big demand for these compliance services is. That’s not too surprising, since cross-border e-commerce typically takes Chinese companies into very unfamiliar terrain in terms of compliance with local rules on things like taxes and product standards.

Truth be told, there’s not much to dislike about this company. It’s the world’s largest provider of such compliance-related services, according to third-party data in the prospectus. With 21.5% of China’s cross-border e-commerce compliance platform market last year, Vatai says its sales value exceeded the combined total of the second- to eighth-ranked market players combined.

If there’s one slight cause for concern, it’s the current uncertainty surrounding cross border trade. The U.S. and Europe have become wary of getting flooded by cheap Chinese goods in the last few years, and have begun erecting some trade barriers to slow that inflow. That shows up in some of Vatai’s recent data, which we’ll discuss shortly.

But with the exception of that one caveat, this company really looks quite strong.

Well-positioned

Vatai has positioned itself at the center of a global cross-border e-commerce market worth a massive 14 trillion yuan ($2.09 trillion) in 2025, and expected to reach 22.2 trillion yuan in 2030, according to third-party data in the prospectus. Much of that is flowing from China to the rest of the world, as Chinese brands and merchants become increasingly adept at selling to consumers overseas, often over platforms like Amazon and Alibaba’s AliExpress.

Despite its relatively small size, Vatai’s listing has some relatively major backers, including leading domestic investment bank CICC as one of its main underwriters. Its early investors also include Boyu Capital, which made headlines last year when it became Starbucks’ new China partner. And most recently, tech giant IDG also invested in the company.

Founded in 2019, the company was already worth $260 million two years later when Boyu invested in 2021. No valuation was given after IDG’s pre-IPO investment earlier this year, but we wouldn’t be surprised if Vatai rose to “unicorn” status with a valuation of more than $1 billion after that funding.

Next, we’ll zoom in on some of Vatai’s financials, which also look quite impressive for such a young company. Its revenue grew 66% in the first half of this year to 386 million yuan from 233 million yuan a year earlier. That marked an acceleration from the 51% growth it recorded for all of 2025, and 46% for 2024, showing the company’s growth has yet to peak.

Vatai makes its money from fees for its various services, which it breaks down into four categories. Significantly, the top three of those are all posting strong, consistent growth. Leading that list was environmental compliance services, which rose 70% year-on-year in the first half of this year to account for 44.7% of revenues. Tax compliance services rose by a similar 70% over that period to account for 36.1% of revenue, while product testing and certification services rose 71% to account for 14.5% of revenue.

Globally diverse

Geographically, the company gets nearly all of its revenue from outside China. It started out providing tax compliance services for Chinese e-commerce companies selling into Germany, and expanded from there to the other major EU markets of France, Britian, Italy and Spain. It says it’s now active in 121 countries and regions globally.

Europe remains its largest market, accounting for 83% of its revenue in the first half of this year. The Americas was a distant second, accounting for 9.3% of sales during that time. The Americas also offers an important data point that illustrates Vatai’s vulnerability to the risk from changing trade policies. After nearly doubling in 2024, revenue growth from the Americas slowed to just 28% last year, before rebounding to 62% in the first half of 2026. By comparison, Europe didn’t really see any slowdown in 2025.

Last year was significant for Chinese companies selling to the U.S., because that’s when the Donald Trump administration eliminated a loophole that had previously allowed foreign packages containing goods worth less than $800 to enter the country duty-free. That exemption, known as de minimus, was officially eliminated for goods coming from China in February that year, and was later expanded to cover goods coming from all countries.

Europe, meantime, took a similar step by imposing a temporary 3 euro customs duty on packages containing goods entering the bloc worth 150 euros ($174) or less from February this year. Such goods had also previously been allowed to enter duty free. The fact that Vatai’s Americas business bounced back this year, and the lack of impact to its European business in the first half of 2026, seems to show that this type of trade measure should have relatively little impact on the company over the longer term.

Vatai has also shown quite good ability to scale its business without incurring high costs. That helped the company to boost its adjusted profit, which excludes share-based compensation and restructuring charges, by 70% in the first half of this year to 74.1 million yuan from 43.6 million yuan a year earlier.

The company’s cash flow is also quite strong, with its cash rising to 563 million yuan by June from 122 million yuan a year earlier, which was also helped by its pre-IPO funding earlier this year. That might lead some to wonder why Vatai is listing now, since it doesn’t seem to need the cash. Our guess is it wants to raise its profile and improve its technology, and possibly expand its services to e-commerce sellers from other markets besides China.

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The plan would mark the third time as a public company for the resort operator, following previous listings in Paris, and later in Hong Kong as Fosun Tourism

Key Takeaways:

• Fosun International has applied to list its Club Med asset in Hong Kong, aiming to expand the company’s global resort operation to 85 properties from the current 69
• The IPO candidate doesn’t contain any vacation home element, distinguishing it from the previously listed Fosun Tourism, which privatized in early 2025,

By Doug Young

If at first you don’t succeed, then try again. That’s the mantra these days at Fosun International Ltd. (0656.HK), one of China’s most successful private conglomerates, which has announced a new plan to spin off and separately list its ClubMed Lifestyle Group, operator of the France-based Club Med resort chain.

Club Med was previously part of Fosun Tourism, a company that Fosun spun off and listed separately in 2018. The shares never traded much higher than their listing price of HK$15.60, mostly because the pandemic plunged the company into chaos just over a year after its listing. The stock later plunged as low as HK$3, before Fosun International took the company out of its misery last year with a privatization at HK$7.80 per share.

Even though its business largely recovered post-pandemic, anyone who bought the IPO shares still lost half their money at the buyout price.

So, why does the company think it can do any better with a new listing? The latest plan, contained in ClubMed Lifestyle’s new listing application submitted to the Hong Kong Stock Exchange on Friday, contains two key differences with the old Fosun Tourism.

Most critically, the new company doesn’t contain any vacation home assets. Such assets were once a major selling point for investors when China’s economy and real estate market were booming and newly wealthy Chinese were snapping up new homes as well as vacation properties at a rapid clip.

Many companies used similar real estate forays to boost their revenue and profits in those boom times, even when their core businesses had little or nothing to do with property development and management. But with the property market now in a prolonged slump, such assets are no longer desirable. And in Fosun Tourism’s case they were actually dragging down the company before its privatization.

The second big difference is the lack of the Atlantis mega-resort on South China’s Hainan Island in the new listing candidate. Atlantis Sanya was a relatively important piece of Fosun Tourism, contributing about 10% of its revenue and 20% of its adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) before the privatization.

Fosun spent 11 billion yuan ($1.63 billion) to develop Atlantis Sanya, and was positioning it as a high-end family mega-resort complete with hotel, aquarium, water parks and restaurants, among other things. But with China’s economy now stumbling, it’s possible Fosun has decided this property is better left outside the new ClubMed. The new prospectus says that Atlantis is being spun off for a separate listing as a real estate investment trust (REIT).

That means the new company Fosun will list is roughly the same one it got when it completed its takeover of Club Med in 2015, in a deal that valued the French resort operator at about $1 billion. At the time, Fosun was hoping to leverage its connections to expand Club Med in China at a time when the Chinese economy was booming and there was still big growth potential there.

Stagnating company

Fosun tried a few different things to jumpstart growth at Club Med, which was stagnating at the time. In addition to the vacation home business, one of its main initiatives was development of two new sub-brands for the China market, Club Med Joyview and Club Med Urban Oasis, catering to urban and city-adjacent short-haul vacation needs.

But that initiative didn’t get too far, with Joyview currently hosting just four locations in China, while Urban Oasis has just three. The bottom line is that Club Med’s footprint hasn’t changed all that much since Fosun acquired the chain. It currently has 69 resorts worldwide, including both owned and managed properties, which is roughly what it had at the time of the acquisition.

ClubMed said it plans to use funds from the listing to expand that footprint to 85 resorts in the next few years. But truthfully speaking, the company has probably floated similar aggressive expansion plans in the past, and then failed to deliver, even though we should note it faced some major unforeseen challenges, first from the pandemic and then from China’s economic slowdown.

The company has hired the relatively high-powered trio of BNP Paribas, HSBC and JPMorgan as underwriters for the listing, showing it has relatively high hopes of attracting investors, especially international ones more familiar with the Club Med brand. But the truth of the matter is ClubMed’s financials hardly look too impressive, showing a company whose business has basically stagnated in the last three years after a sharp post-pandemic rebound.

ClubMed’s revenue reached 1.95 billion euros ($2.26 billion) last year, up just 1.6% from the 1.92 billion euros it reported in 2024. The figure plateaued in the first half of this year at 1.08 billion euros, identical with last year. The company still gets the majority of its revenue from the Europe, Middle East and Africa (EMEA) region, which has remained relatively steady at 60% over the last three years. The Americas are second at 24%, while Asia provides just 17%, despite all the company’s attempts to develop the China market.

Nearly all the company’s major metrics, including its overall number of guests, capacity and occupancy rates, have remained largely unchanged over the last three years. Its average daily room rate has done slightly better, rising from 220 euros in 2023 to 235 euros last year, which helped to lift its gross margin to 30.3% last year from 28.9% over that period. But even that change looks quite incremental.

Such small gains haven’t done much for its bottom line, with the company’s profit actually falling to 10.9 million euros last year from 29.6 million euros in 2024 due to unusually high tax expenses. The situation improved this year, with the company’s profit in the first half of the year falling to 57.1 million euros from 65.1 million euros a year earlier.

The bottom line is that Fosun is offering up a cleaner company under a globally familiar brand in this new IPO bid by getting rid of the vacation home element and the Atlantis mega-resort. But investors will hardly be excited by the company’s stagnating business, which was why the stock languished in its earlier life as a Paris-listed company before Fosun purchased and privatized Club Med in 2015.

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China's largest community-based fresh food chain has reapplied to list in Hong Kong, planning to use the funds to boost its store network and supply chain capabilities

Key Takeaways:

• Qdama has renewed its Hong Kong listing application, reporting both its profit and revenue fell in the first half of 2026
• The community grocer’s footprint rebounded to more than 3,000 stores once again at the end of June

By Lau Chi Hang

Its slogan is "No overnight meat," referring to its mission to only offer the freshest ingredients from its community-based shopping network. But a new IPO application from Qdama International Holding Ltd., filed last week, also looks just slightly stale.

The latest filing comes after Qdama’s original application at the start of this year lapsed after the maximum six months. But those six months look much longer in the current climate, which has seen Hong Kong’s wave of IPO fever earlier this year start to ebb. Even market darlings like companies involved in AI large models, chips and related infrastructure have seen their shares drop by half or more from recent peaks. That means more traditional companies like Qdama may have missed the best time to jump on the listing train.

Adding to its lukewarm timing, Qdama's financial performance isn’t especially mouth-watering. Its revenue has been roughly flat for the last three years, ranging from 11.3 billion yuan ($1.68 billion) to 11.8 billion yuan. That continued in the first half of this year, when its revenue fell 2% year-on-year to 5.1 billion yuan.

At the same time, its net profit has been quite erratic due to fair value changes in its financial instruments unrelated to operations. The company earned profits of 169 million yuan and 288 million yuan in 2023 and 2024, only to drop to a 279 million yuan loss last year, before rebounding to a 68.05 million yuan profit in the first half of this year.

Unremarkable performance

The company’s gross profit has been similarly stagnant, rising slightly from 1.2 billion yuan in 2024 to 1.27 billion yuan last year. The metric was similarly flat in the first half of this year at 584 million yuan. Put differently, Qdama's business hasn’t regressed, but it hasn’t advanced either, meaning its current situation can only be described as "stable" if you’re an optimist, and “stagnant” if you’re a pessimist.

That’s hardly ideal for a company seeking a compelling story for investors in search of diamonds in the rough. Understanding that, companies typically accentuate the positive in their prospectuses, often by saying how they’ll use their IPO proceeds to expand. Qdama is no different in that regard, saying it plans to use the funds to develop its store network and strengthen its supply chain capabilities.

To better understand the company's prospects, it’s helpful first to better understand its business model. That model is fairly straightforward, mirroring the approach taken by many of China’s famous bubble tea, restaurant and toy chains. The founder typically opens a store, and spends the first few years perfecting the format and finding a path to profits. From there the next step is expansion and building up brand awareness, at which time the founder often turns to franchising to start turbocharging store counts.

By that time the founder has a more diversified revenue stream, derived from franchising fees, as well as sales from providing raw materials, equipment and store decorations to franchisees. Revenue from these franchise networks can easily exceed 90% of the company's total. Meantime, self-operated stores often become an afterthought, functioning more like prototypes to demonstrate the business’ operations.

Such a model demonstrates that Qdama must keep building up its franchise network if it wants to jumpstart its growth and attract investors.

Shrinking footprint

But opening new stores is often easier said than done. Founded in 2014, Qdama evolved from a single small store into a vast network with thousands of locations in just a few years. As the business grew, founder Feng Jisheng, who has since left the company, aimed to create a national chain that had 3,700 stores at its peak in 2021.

But the company ran into headwinds with its plan to expand to North China, which went far less smoothly than in its base in the South. It discovered that Northern Chinese are less particular than their Southern peers, less worried about the freshness of meat and content to eat frozen products. It also discovered that rents in large Northern cities were sometimes exorbitant, leading to a crushing defeat that saw the company sharply downsize its footprint in that part of the country.

As it retreated, Qdama’s store count fell to just over 2,900 by the end of last year. It resumed expanding this year as it marched towards its IPO, opening new stores that brought its total to 3,014 by the end of June.

Roughly two-thirds of Qdama's stores are currently located in South China’s Guangdong province. The company has not only failed to step out of the South, but is reaching saturation in its home province.

Fierce competition and low margins

In the absence of a growing store count, the company might still be able to attract investors with rising gross margins from its growing experience and economies of scale. But Qdama's gross margin is quite thin and only growing slowly, a common predicament for many grocers. The figure rose from 9.8% in 2023 to 11.2% last year, and reached 11.5% in the first half of this year.

Making matters worse, Qdama has been forced to focus its expansion on Guangdong, resulting in geographic concentration that has led to cannibalization of its own stores, which sometimes can be as close as just 250 meters apart.

Hong Kong currently lacks any listed companies with similar profiles to Qdama’s. But comparable food ingredient companies include Guoquan (2517.HK) and Xiaocaiyuan (0999.HK). Weakening stock market sentiment is being compounded by a broader lack of interest in consumer companies, which are being forced to cut prices amid weak consumer demand. That doesn’t bode well for a company like Qdama.

Guoquan has tumbled from a high of HK$4.75 in June to just HK$1.76 recently, dropping its trailing price-to-earnings (P/E) ratio to just 8.5 times. Xiaocaiyuan's stock has fallen by over 30% from its high in the past year, giving it a trailing P/E ratio of 13.5 times. Similar-level valuations for Qdama could give it a post-listing valuation of between HK$1.4 billion and HK$2 billion – hardly mouth-watering for investors looking to buy into China’s next grocery giant.

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The mid-tier EV battery maker is targeting domestic Chinese investors with its new listing plan, as it aggressively expands its capacity

Key Takeaways:

• Zenergy Battery expects to report its net profit rose between 45.5% and 81.8% during the first six months of 2026
• 15 months after its Hong Kong IPO, the new energy battery maker is seeking a second listing in Shenzhen to help bankroll an aggressive expansion

By Edith Terry

Jiangsu Zenergy Battery Technologies Group Co. Ltd. (3677.HK) has been on a fundraising roll since its April 2025 Hong Kong IPO, tapping the city’s global investor pool for nearly $200 million from the listing and a subsequent private placement last October. Now, it’s turning inward to domestic Chinese investors with plans for a Shenzhen IPO to continue expanding in a race for scale that could determine who survives in the overheated new energy battery industry.

The mid-tier battery maker has completed initial registration procedures with the Jiangsu securities regulator and officially entered the IPO tutoring process required for its planned listing on the Shenzhen Stock Exchange’s Nasdaq-style ChiNext board, according to media reports.

Those reports came just days before the company issued an upbeat earnings previewlast week, saying it expected to report its net profit rose between 45.5% and 81.8% in the first half of this year, equivalent to 320 million yuan ($47.4 million) to 400 million yuan, from 220 million yuan a year ago. Zenergy’s shares jumped by 4.2% the next trading day, but are still down 33% this year, reflecting investor concerns about the longer-term fate of mid-tier battery makers.

The company cited a gradual ramp-up of new production capacity for the profit jump, together with higher capacity utilization. Shipments of electric vehicle (EV) and energy storage system (ESS) batteries both rose substantially, with the latter posting “a significant increase” in revenue, Zenergy said. As its revenue grew, the company’s expense-to-revenue ratio also declined.

After losing money as recently as 2023, Zenergy began to show modest profits in 2024 with net income of 91 million yuan on revenue of 5.13 billion yuan that year. It moved squarely into the black with an 809 million yuan profit last year, as its growing scale, reflected by 58% top-line revenue growth, fueled by a 3.8 percentage point rise in its gross margin to 18.4%.

Well positioned

In a July research report, Goldman Sachs said Zenergy is poised to become the fastest growing company in China’s battery industry, and one of the few where every dollar invested exceeds the cost of capital. Goldman gave a target price of HK$13 for the company’s Hong Kong-listed shares, more than double its latest close of HK$5.585, reflecting its high growth expectations.

Nonetheless, investor skepticism is weighing on mid-range battery producers like Zenergy due to their constant need for cash as they race to catch up with top-tier players like industry leader CATL (3750.HK; 300750.SZ). Zenergy plans to double its capacity to 70.5 GWh this year from 35.5 GWh at the end of 2025 and further boost that to 120 GWh in 2027. Even so, those figures still pale compared with CATL’s 772 GWh in capacity at the end of 2025, with another 321 GWh under construction.

But Zenergy has more up its sleeve outside the cutthroat EV battery business. It sees new growth potential in both ESS batteries used to store excess power at solar and wind farms, and in batteries used to power a new generation of electric vertical takeoff and landing (eVTOL) aircraft. ESS batteries have gained strong momentum recently thanks to improving technology and strong demand from both residential and industrial customers, especially developers of power-hungry data centers used for AI applications.

Zenergy’s ESS revenue actually declined last year, falling to 5.2% of revenue from 9.1% in 2024. The company blamed that on production capacity constraints, which it said will be fixed through capacity expansion.

The Shenzhen listing is key to Zenergy’s plans for building scale. New flexible production lines can produce multiple types of batteries for EVs, energy storage and aviation powertrains. The company also has plans for marine EV batteries.

As of the end of 2025, Zenergy had used up about two-thirds of its IPO funds allocated for construction, but still had 350 million yuan earmarked for capacity expansion from its private placement.

A Shenzhen listing could give Zenergy a valuation boost of as much as 20% to 30%, since Mainland investors often value emerging industry companies more highly than their Hong Kong peers. Zenergy’s inclusion in a cross-border program last September making its Hong Kong shares available to Mainland investors gave the stock a temporary bump. But the shares have struggled this year on concerns over its longer-term prospects, despite Zenergy’s strong 2025 results.

Celebrity chairwoman

Zenergy’s rapid rise has cast its chairwoman and co-founder Cao Fang into the spotlight. Cao is the younger sister of Cao Dewang, one of China’s most famous entrepreneurs as founder of Fuyao Glass, the world’s largest specialized automotive glass company, with roughly one-third of the global market. Cao Fang is 12 years younger than her brother, now 81, and began working for him in 1997 at the age of 39 when Fuyao Glass was just 10 years old.

One observer likens Cao Fang to a top student from a famous martial arts academy who leaves to form her own school, integrating the original academy’s techniques but creating her own moves as well. In 2013, already a vice president of Fuyao Glass, Cao Fang and Fuyao executive director Chen Jicheng set up Changshu Sinogy Venture Capital.

The same year, Cao and Chen invested in a joint venture with Toyota to supply battery packs for the Japanese car giant’s hybrid vehicles in China. Cao Fang and Chen both left Fuyao in 2014, and two years later they bought the assets of Tafel, a battery maker founded by former CATL employees, which became Zenergy three years later. With backing from her older brother and his automobile industry network, her client list soon came to include big domestic names like FAW Hongqi, GAC Trumpchi, Leapmotor, SAIC-GM-Wuling, SAIC-GM, GAC Toyota and Volkswagen.

Based in the city of Changshu in East China’s affluent Jiangsu province, Zenergy’s Series A financing round raised 2.4 billion yuan and made it a local star. Cao Dewang has a 2.5% interest in the company. And despite his own retirement from Fuyao Glass in 2025, current Chairman Cao Hui, who is also Cao Fang’s nephew, is likely to keep up the close relationship between Zenergy and Fuyao Glass going forward.

Whether Zenergy’s Cao Fang can deliver on her strategy of diversifying from EV batteries to ESS and aviation batteries to reach scale is an open question. Her deep experience with the 11.1 trillion yuan Chinese auto industry will likely be one of the company’s biggest advantages as a shakeout looks likely in the hotly contested battery sector over the next few years.

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The car technology company has filed to list in Hong Kong, as it pivots from automotive communication boxes to automated accident emergency call systems

Key Takeaways:

• Yodosmart has renewed its Hong Kong listing application as a maker of vehicle communication, accident emergency call, and sensing and domain control products
• Accident emergency call systems sales surged more than fourfold in the first five months of 2026, overtaking vehicle communication as the company’s top revenue source

By Lee Shih Ta

As Chinese car exports accelerate, breaching the 7 million-unit threshold last year, automakers are finding themselves facing not only new competition in unfamiliar markets, but also speed bumps from local safety standards that must be cleared. Such requirements, which lie hidden in the shadows of the global expansion wave, are bringing some unexpected bounty to manufacturers in the supply-chain for safety-oriented systems.

One of those, Hangzhou Yodosmart Automotive Technology Co. Ltd., which renewed its Hong Kong listing application last week, is unearthing fresh growth from those compliance requirements. The company supplies in-vehicle communication, emergency call, and sensing and domain control products tailored to a wide range of vehicles. Lately, it has found a major new cash cow in emergency call, or eCall, systems that contact rescue centers and transmit location and vehicle data when accidents occur.

Yodosmart’s pedigree came from its founders’ background at research institutes when it launched a decade ago. Chairman Li Wei previously worked at the No. 52 Research Institute of China Electronics Technology Group Corp. and Cethik Group for over 20 years, while general manager Lu Chaohong previously headed Cethik's smart automotive operations.

Grounded in this academic and product development background, Yodosmart quickly worked its way into the supply chain of a top-10 domestic automaker just two years later. The company began volume shipments for its SUV-use vehicle communication products for a top-10 manufacturer in 2020, and by 2022, its deliveries exceeded the 500,000-unit mark.

Its core product, the Telematics Box, or T-Box, functions as the vehicle's “communication box.” It bridges cellular networks with the cloud, enabling vehicle condition monitoring, remote control and software updates. Moving from design wins to mass supply typically takes nine to 24 months, with subsequent production orders extending for two to three years. Consequently, the company's revenue remains tightly tethered to life cycles for individual vehicles produced by its clients.

Turbocharged growth in 2024

Multiple 4G vehicle communication projects completed their production ramp-up and advanced into large-scale delivery in 2024, turbocharging Yodosmart’s revenue that year to 398 million yuan ($59 million), nearly double the previous year. But that growth was fleeting, punctuated by model life-cycle dynamics.

By 2025, as automakers retooled their production schedules and model mixes, Yodosmart’s 4G product revenue tumbled from 332 million yuan in 2024 to just 240 million yuan last year. Newly commercialized 5G products picked up some of the slack, but failed to plug the shortfall. Still, the company managed to salvage overall revenue growth of 12.8% last year, as its newer eCall and sensing and domain control businesses took the baton. In effect, Yodosmart’s growth engine pivoted from 4G mass production toward safety compliance products fueled by demand from export-bound models.

The company began bundling emergency call and vehicle communication solutions into export models in 2023, securing multiple international certifications the following year. That effort has paid off in booming revenue for the eCall business, which surged more than fourfold year-over-year to 78.76 million yuan in the first five months of 2026, equal to 43.9% of total revenue.

That jump helped the eCall business eclipse Yodosmart’s older vehicle communication segment for the first time, resulting in overall 37.1% revenue growth to 179 million yuan for the five-month period. More crucially, the eCall business boasts a 30% gross margin — more than double the 12.6% for vehicle communication — signaling this newer revenue stream should also help to lift Yodosmart’s profitability.

Profitability lags business pivot

That said, the revenue transition has yet to fully filter down to the company’s bottom line. Yodosmart's net profit grew from 10.94 million yuan in 2023 to 40.15 million yuan in 2024, but then dipped 1.4% to 39.57 million yuan in 2025, primarily weighed down by listing fees, climbing personnel costs, and dwindling government subsidies. Its adjusted net profit still grew 14.5% year-on-year to 57.81 million yuan in 2025.

In the first five months of 2026, the company swung to a net profit of 4.38 million yuan from a 630,000 yuan loss a year earlier, while its adjusted profit more than doubled to 13.14 million yuan. These figures indicate the newer eCall ramp-up has begun to bolster the company’s core earnings, though a tiny 2.4% overall net profit margin remains notably low.

The nascent bottom-line improvements, while encouraging, don’t signify that Yodosmart’s transformation is fully complete. Despite the shift from 4G to eCall products, the company’s legacy and new businesses are all anchored by the same core client, which appears to be Chery, based on descriptions in the listing document. As of the end of May 2026, its largest customer accounted for 77.4% of its revenue, with its top five clients collectively sweeping up 96% of its sales. The company is bringing a new factory online in the city of Wuhu, which is Chery’s headquarters, in East China’s Anhui province. Yet the added capacity remains heavily tailored for the client.

While such close collaboration can strengthen customer stickiness, it also makes adjustments more difficult for models from other customers.

Thus, Yodosmart next major task will be not merely selling more eCall units, but validating its product template across a broader array of automakers. China's mandatory standard for in-vehicle emergency call systems, slated to take effect on July 1, 2027, could help to redirect demand from export models back to the domestic market. However, 5G vehicle communication and sensing and domain control still represent a minuscule fraction of Yodosmart’s overall revenue and have yet to prove they can become another new growth curve.

Its high degree of specialization and unique product mix make it difficult to identify direct Hong Kong-listed peers for Yodosmart. Shares of closely related Shenzhen-listed counterparts Flaircomm Microelectronics (301600.SZ) and Gosuncn Technology (300098.SZ) are down between 20% and 30% this year.

For investors, Yodosmart's attraction is its eCall business that has replaced 4G as a new growth engine, and China’s 2027 mandatory standard that could boost demand at home for those eCall products. Nonetheless, the company’s overwhelming reliance on a single customer, and its relatively low profitability are important caution signals. At this stage, Yodosmart looks more like a relatively mature automotive electronics supplier rather than deserving a valuation premium as a high-growth tech stock.

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Revenue nearly doubled this year for the leading provider of green shipping equipment and systems, as it renews its attempt at a Hong Kong IPO

Key Takeaways:

• Zhejiang Energy Marine has renewed its Hong Kong listing application, aiming for a first-to-market premium in the booming field of green shipping equipment
• The company’s revenue nearly doubled in the first five months of this year, as two of its newer businesses overtook its original exhaust gas emission control systems

By Doug Young

The U.S.-Iran conflict may be wreaking havoc on global shipping, but that doesn’t seem to be affecting Zhejiang Energy Marine Environmental Technology Co. Ltd., which bills itself as the global leader in green shipping equipment and systems. Instead, the company seems to be thriving on booming demand for cleaner-running ships that are the backbone of world trade.

Zhejiang Energy Marine is hoping investors buy into its high-growth story, as it submitted an updated application for a Hong Kong IPO last Friday after its original January application lapsed. While its story looks quite positive, driven by demand for cleaner-running ships, the company is also notable for the choppy nature of its business.

That’s not difficult to understand, since its work isn’t very standardized and is highly project-based, in a global shipping sector where the top 10 companies control around 85% of the market, according to its listing document. The largest of those shippers, the privately held Mediterranean Shipping Co., or MSC Group, appears to be Zhejiang Energy Marine’s biggest customer by far, which is a double-edged sword that we’ll discuss in more detail shortly.

Zhejiang Energy Marine operates in a space that’s growing rapidly, as shipping companies try to install the most cutting-edge technology to reduce their emissions. The global green shipping equipment and system market is expected to grow by an impressive 31.7% annually between 2025 and 2030 to reach 151.6 billion yuan ($22.5 billion) by the end of that period, according to third-party market data in the listing document.

Zhejiang Energy Marine was founded in 2018 as a maker of vessel exhaust gas emission control and cleaning systems. It was a product of China’s experimentation at that time with “mixed ownership reform,” which attempted to breathe new life into inefficient state-run entities by bringing in private investors. In this case the state-run entity that provided the company’s initial business was Zhejiang Energy Group, while the private-sector partner was Wang Xinru, who has a long career working in China’s state-dominated shipping industry.

Reflecting that public-private hybrid, Wang is currently the company’s president, while its Chairman Guo Jinrong has a long background in the government of Zhejiang province. Such hybrid management can be good when everyone agrees on strategy, and also provides strong channels to government entities that are key for things like funding and permits. But it can also become problematic when disagreements occur between the state-owned and private stakeholders. In such cases the state-owned parties – who are sometimes more interested in politics than profits – almost always win.

While internal politics remains a major risk factor going forward, the company is doing quite well right now, based on the data in its listing document.

Its revenue jumped 90% in the first five months of 2026 to 2.51 billion yuan from 1.32 billion yuan a year earlier, as two of its newer business areas gained major new momentum. The company started out mainly selling vessel exhaust gas emission control and cleaning systems, which accounted for nearly all of its revenue as recently as 2023. But two newer segments, vessel energy efficiency enhancement systems, and vessel retrofitting services, have been growing rapidly since then, and both passed the original vessel exhaust gas emission control and cleaning systems in terms of revenue this year.

Sputtering original business

The company’s legacy vessel exhaust gas emission control and cleaning systems grew 25.5% to 767 million yuan in the first five months of this year to account for 31% of total revenue. But that segment was falling steadily before that, with revenue down by a third between 2023 and 2025. The drop owed to sharply falling prices, which saw the average system tumble from a price of 15.3 million yuan in 2023 to just 5.18 million yuan this year. The company blamed the steep drop to its shift from doing more retrofitting work on existing ships to installing more systems on new ships, with the former typically costing much more than the latter.

But vessel energy efficiency enhancement systems did much better, with revenue up 144% year-on-year to 860 million yuan in the first five months of 2026, as that segment became the company’s biggest breadwinner at 34% of total revenue. Unlike the legacy business whose prices have been falling, average selling prices for vessel energy efficiency enhancement systems have been on a sharp uptick, rising from 1.79 million yuan in 2024 to 2.9 million yuan in the first five months of this year.

Vessel retrofitting services rose by a similar 145% to 800 million yuan, making up 32% of total revenue.

Gross margins for the three main business segments are quite variable, with retrofitting services notably low in the 10% to 18% range. That reflects the non-standardized nature of the business, with most sales involving high degrees of customization and different levels of support services.

But one of the most notable things, and biggest risk factors, for Zhejiang Energy Marine is its extremely heavy reliance on a single customer, which, while not named directly, appears to be MSC Group. That single customer supplied 68% of the company’s revenue in the first five months of this year – a huge total by any measure, and one that could quickly change if the relationship deteriorates or MSC finds better or cheaper products.

What’s more, the company’s second-largest customer is a small company with a fleet of just four vessels engaged in dry bulk shipping. That means the customer, which accounted for 13.5% of Zhejiang Energy Marine’s revenue in the first five months of this year, is likely to disappear as soon as its small fleet is upgraded and equipped with the latest green equipment.

That said, this company is quite solid in terms of its financial health. Its operating cash inflow has ramped up steadily in step with its business, rising to 756 million yuan in the first five months of this year from 663 million yuan for all of 2025. That’s helped the company to build a war chest of 1.5 billion yuan in cash by the end of this May, up from 794 million yuan at the end of 2025. And on the bottom line, the company also saw its profit more than double to 622 million yuan in the first five months of this year from 277 million yuan in the year-ago period.

Zhejiang Energy Marine would be the first from its class to go public if it completes its Hong Kong IPO, with major rivals like Feen Marine, Panasia Co. and Innomotics GmbH all still private. That first-to-market status, combined with its relatively solid financials, despite its heavy reliance on a single customer and fading original business, could prove enticing for investors looking for exposure to the global shipping industry.

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The company has filed for a Hong Kong IPO, thriving on China’s growing silver economy and a steady stream of government policies supporting traditional Chinese medicine

Key Takeaways:

• Yuyantang has filed to list in Hong Kong, reporting its revenue and net profit both grew by more than 40% in the first five months of this year
• The company is the fifth-largest private China-based provider of medical services based on traditional Chinese medicine

By Bai Xin Rui

China’s aging population is boosting demand for traditional Chinese medicine (TCM) services preferred by many people from an older generation forming the backbone of China’s “silver economy.” That’s providing big business for Harbin Yuyantang Traditional Chinese Medicine Outpatient Group Co. Ltd., the leading private TCM medical services provider in Northern China, which is seizing on the occasion to file for a Hong Kong IPO.

Yuyantang was founded in 2015 by Guo Yang, who previously invested in a Harbin-based TCM developer of herbal ointments and drugs. Yuyantang has carried on that tradition from its base in Harbin, capital of Northeast China’s Heilongjiang province, providing treatment for chronic diseases such as chest heart disease, stroke, hypertension, insomnia, and diabetes, as well as engaging in broader preventive care and long-term health management.

Participants in China’s TCM medical services market include hospitals, outpatient centers, clinics, and other related service providers. Yuyantang primarily operates TCM outpatient centers and clinics, using herbal medicines and non-pharmacological therapies like acupuncture, cupping and therapeutic massage to provide diagnosis and treatment services. It also offers TCM-related pharmaceutical services, such as precise dispensing of herbal medicines and preparation of medicinal decoctions.

The company ranked fifth among all private TCM medical service providers in China last year with 2.3% of the market, according to third-party research in its listing document. It was the leader in the North China region, commanding 7% of the market. It had 59 offline physical institutions by the end of May, including facilities outside its Northeastern China base after moving into East China’s affluent Jiangsu province.

Unlike some companies that use a franchise model, Yuyantang builds and operates all of its centers to ensure uniformity across its clinical protocols, service quality and overall brand standards. Its outpatient centers and clinics typically range from 400 to 800 square meters and are located in high-density communities, allowing for shorter investment payback periods and quicker expansion of its network.

The company’s big money spinner is prescription preparations, which accounted for 92.4% of its revenue in the first five months of 2026. That part of the business generated 169 million yuan ($25 million) during the five-month period, up by a healthy 40% year-over-year.

Prescription preparations include personalized TCM preparations, as well as in-hospital preparations. Personalized TCM preparations cover a highly personalized treatment philosophy of “one prescription per patient,” with the specific combinations of herbs adjusted for each patient's illness and physical constitution. Consequently, core medicinal ingredients vary in each personalized prescription.

By comparison, in-hospital preparations are standardized pharmaceutical formulations manufactured or prepared in strict accordance with fixed, pre-set formulas explicitly approved by the hospital. That allows them to be repeatedly prescribed to the same patient or applied to other patients suffering from similar medical conditions.

For the five-month period through May, Yuyantang's average revenue per patient stood at 443 yuan, up 1.1% from 438 yuan at the end of 2025. Over the same period, its gross margin dropped 1 percentage point to 61.6% from 62.6% in 2025. The company’s overall revenue grew 43.1% year-over-year to 183 million yuan during the period, offsetting the slight margin decline, to boost its profit by 41.3% to 24.22 million yuan in the first five months of 2026.

M&A potential

The company and its peers are getting a policy boost from Beijing’s backing for the development of private TCM medical institutions and the broader TCM industry. The central government has rolled out a number of policies involving the area, including a “15th Five-Year Plan for Traditional Chinese Medicine Development,” the “Major Project Implementation Plan for the Revitalization and Development of Traditional Chinese Medicine,” and the “‘Health China 2030’ Plan Outline.”

Supported by such policies, combined with China’s rapidly aging population, the domestic market for TCM prescription preparations hit 63.4 billion yuan in 2025, according to market data in the listing document. The market is forecast to keep growing rapidly as more people seek TCM services for chronic diseases and other conditions, reaching 105.8 billion yuan by 2030.

As one of China's top five players, Yuyantang is poised to directly benefit from this macroeconomic momentum. However, investors should also note that demand for TCM medical services tends to be cyclical, with visits typically down during the Lunar New Year that falls in January or February. As a result, first-quarter revenues for TCM service providers tend to be slightly lower during that time.

Overall, China’s top five private TCM medical service chains control a combined market share of just 21%, with the leader accounting for 7.9% of that. That reflects the industry’s fragmented landscape, suggesting room for consolidation by major players like Yuyantang by acquiring smaller industry peers.

In terms of peer comparisons, Hong Kong-listed PuraPharm (1498.HK) reported revenue of HK$336 million ($42.8 million) in 2025, but lost HK$35.22 million during the year. By comparison, Yuyantang's revenue last year reached 400 million yuan, and its profit surged 163% to 67.3 million yuan.

Using PuraPharm's market capitalization of 150 million yuan as a reference, Yuyantang’s relative pedigree suggests it should be valued more highly by institutional and retail investors alike, likely to attain a valuation of HK$200 million or more.

In summary, Yuyantang looks like a highly competitive company, with a solid financial growth profile and strong base through its chain of self-operated medical facilities offering highly “sticky” chronic disease diagnostic and long-term treatment services. Supported by China’s strategic push to revitalize TCM and the demographics of a rapidly aging population, the company’s decision to pursue a Hong Kong listing looks well timed.

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Energy storage stocks are undergoing a major correction, including a plunge of more than half for Deye’s Shanghai-listed shares from a peak in May

Key Takeaways:

• Deye Technology has applied for a second listing in Hong Kong, reporting its profit surged 75% in the first four months of this year
• The new energy inverter maker gets 80% of its revenue from overseas markets, subjecting it to risks from trade policies and foreign exchange rate fluctuations

By Cheng Shui Tong

Hong Kong’s IPO wave may be ebbing, but some notable names continue washing up in the steady string of new filings nonetheless. One of those, Ningbo Deye Technology Corp. (605117.SH), harkens from a corner of the new energy sector providing energy storage inverters that are a critical component in solar and wind power stations. But the timing may be slightly off, as this sector, which was once an investor darling, has lost much of its star power in the last few months.

That said, Deye boasts some relatively strong financials. Its profit has been growing steadily over the last three years, rising from 1.79 billion yuan ($265 million) in 2023 to 3.17 billion yuan last year, according to its preliminary prospectus filed late last month. A month ago, Deye, which is already listed in Shanghai, projected more strong profit gains this year, saying it expects to report a profit of 2.67 billion yuan to 2.73 billion yuan for the six-month period, up 75% to 79% year-on-year.

Deye’s gross margin is also relatively high, ranging between 38% and 39.2% over the last three years. It has maintained such high margins by adjusting its product mix, and also by expanding in sales overseas where margins tend to be higher than for China.

Energy storage inverter leader

Deye’s bread-and-butter is energy storage inverters that convert direct current generated by solar and wind farms into alternating current that meets power grid requirements. According to third-party market data in its listing document, the company ranked first in the global residential energy storage inverter market last year with 20.6% share. It also produces environmental management equipment, such as dehumidifiers, solar air conditioners and heat exchangers.

Among Deye's two main businesses, new energy boasts the higher gross margin, which stood at 39.9% in the first four months of this year. Energy storage inverters were the star of that segment with a gross margin of 51.1% during that time, while energy storage batteries and PV inverters clocked in at 31.1% and 30.2%, respectively. Environmental management appliances were the company’s laggard, with a gross margin of 25.4%.

Big business overseas

A key factor keeping Deye’s margins high has been its pursuit of overseas markets. Exports rose from 58% of its sales in 2023 to 79.7% last year, and climbed further to 87.6% in the first four months of this year. Within that figure, Europe was the largest destination, accounting for as much as 45% of sales as EU members raced to install more renewable power in response to challenges created by the Russia-Ukraine war. Deye's overseas gross margin reached 40% last year, far higher than the 28% for domestic sales.

While things generally look positive for Deye, there are also some red flags in its business. Leading those is its heavy reliance on overseas sales, which could place it in the crosshairs of international trade conflicts. Illustrating that, the U.S. recently announced a ban on Chinese power inverters on national security grounds, causing related new energy stocks to plunge. Deye wasn’t too affected by the decision, since North America accounts for only 3.3% of its business. Still, similar moves in an increasingly protectionist Europe and other regions are always possible.

Another important risk lies in the foreign exchange rates. Because the company relies so heavily on exports, a strengthening Chinese yuan this year has resulted in net foreign exchange losses of 172 million yuan in the first four months of 2026 alone. The company states that a 5% appreciation of the yuan against the U.S. dollar would result in 240 million yuan in foreign exchange losses this year through April. A similar appreciation against the euro would generate about 11.4 million yuan in foreign exchange losses over the same period.

China is the world's largest producer of energy storage products that play a key role by storing excess electricity generated by wind and solar farms for later use. The market has grown steadily in recent years, but competition has also become fierce. Reflecting that, the average price of Deye's energy storage inverters fell by about 20% from 8,567 yuan in 2023 to 6,763 yuan in 2025, only to rebound somewhat to 7,015 yuan this year. Its selling price for energy storage batteries also dropped from 6,930 yuan in 2023 to 4,933 yuan in 2025, but then bounced back to 5,325 yuan this year.

Roller coaster stock prices

Deye filed to list in Hong Kong back in January this year, and only refiled last month after that initial application lapsed. That timing may be critical, as investor sentiment towards new energy IPOs has cooled markedly over that time. A case in point is Guoxia Technology (2655.HK), an energy storage company whose shares more than tripled after their IPO last December, giving it a sky-high leading price-to-earnings (P/E) ratio of more than 200 times. But the stock has cratered more recently, and now trades below its IPO price. Sigenergy (6656.HK), a provider of energy storage systems, has followed a similar trajectory. Its shares initially more than doubled after its April IPO, only to give back all those gains and more to trade below their IPO price.

Deye's Shanghai-listed shares haven’t been spared in the bloodbath, also down by half from their peak in May. Shenzhen-listed peers Sungrow (300274.SZ) and Ginlong (300763.SZ) have recorded similar declines, showing that investors remain concerned about stiff competitive and the potential for protectionist measures to affect exports. More broadly, market sentiment has also shifted away from high-growth emerging industries back toward traditional sectors, pressuring new energy stocks across the board.

Deye's performance looks strong, but that hasn’t resonated lately with investors. Its Shanghai-listed stock currently trades at a trailing P/E ratio of about 33 times. While that still looks relatively solid, the figure would drop significantly on a forward basis if its profit continues to grow strongly this year. That could ultimately work to the company’s advantage with the Hong Kong listing, since a pricing at today’s more reasonable valuation levels could draw in not only sector bulls, but also some bargain hunters.

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The company’s Hong Kong listing bid faces multiple headwinds, including its own unstable financials and cooling enthusiasm on robotics stocks

Key Takeaways:

• Topstar has filed for a Hong Kong IPO, reporting steadily falling revenues over the past three years
• The company is actively expanding its industrial robotics business in its bid to jumpstart revenue growth

By Lau Chi Hang

Agile robots performing flips and martial arts on China’s “Spring Festival Gala” Lunar New Year program never fail to dazzle, even as this year’s extravaganza is mostly memory by now. Even so, entertainment value isn’t worth a whole lot without practical, real-world applications. From that perspective, industrial models are the primary commercializing force in the robot sector for now, while the performing variety remain mostly a curiosity.

Against that backdrop, Guangdong Topstar Technology Co. Ltd. (300607.SZ), looks like a solid bet, at least conceptually, as a maker of industrial robots for the plastic injection molding sector. The company is banking on its proven products to lure investors to its planned Hong Kong IPO, following its filing of a listing application last week.

Founded in 2007, Topstar started out focusing on plastic injection molding processes before pivoting toward Cartesian and multi-joint robots. Listed on Shenzhen's Nasdaq-style ChiNext board in 2017, the company has recently introduced its own vertical large model for industrial robots. Last year, it rolled out intelligent single- and dual-arm robots and unveiled China's first intelligent humanoid robot specifically for use in injection molding scenarios.

Tumbling revenues

Despite its recent move into industrial robotics, nearly half of Topstar’s revenue still comes from its older intelligent energy and environmental products. Combined with injection molding equipment and computer numerical control (CNC) machine tools, industrial robots and automation systems only account for slightly more than 20% of the company’s total revenue, showing it’s still highly dependent on older product lines.

Topstar’s revenues have been falling steadily over the last three years, dropping by more than a third from 4.55 billion yuan ($672 million) in 2023 to 2.87 billion yuan in 2024. They fell further to 2.51 billion yuan last year. That uninterrupted string of declines translates to a contraction of more than 40% over the last three years.

Its bottom line has also been less than stellar. The company logged a profit of 106 million yuan in 2023, but then swung to a 240 million yuan net loss in 2024, before returning to the black last year with a 73.14 million yuan profit. It remained in the black with a 42.85 million yuan profit in the first quarter of 2026, but its overall profitability is clearly volatile.

Topstar attributed the massive top-line slump to a deliberate downsizing of its intelligent energy and environmental businesses. Its listing document shows that segment shrank from contributing 59% of the company's revenue in 2023 to 36.5% last year, before plummeting to just 5.6% in the first quarter of 2026.

“Addition and subtraction” strategy

Topstar expects to conclude the ongoing scale-back of its intelligent energy and environmental business by the end of this year. While the segment’s revenue will end up a fraction of its former self, overall profitability is set to notably improve. The business has continually lost money in recent years, maintaining a double-digit gross loss margin that has dragged down the company’s overall margins. By slimming down the segment, Topstar is sacrificing revenue but positioning itself for more sustained profits.

While cutting back its loss-making operations, Topstar has been pooling its resources to aggressively scale up its industrial robotics division. That restructuring helped to lift the company’s overall gross margin from 17.6% in 2023 to 32.5% in the first quarter of this year, showing its “addition and subtraction” strategy is bearing fruit.

Still, it’s worth noting that despite its improving margins, revenue from Topstar’s industrial robotics and automation systems business also fell from 969 million yuan in 2023 to 685 million yuan last year. The company said it strategically decided to reject some new orders to focus on serving core clients in the consumer electronics sector, causing its automation system sales to drop from 2,500 units to 1,300 units over that period.

Things started looking up this year. Automation system sales hit 1,000 units in the first quarter of the year, up by a sharp 230% from the year-ago period, while revenue from the segment also surged by a smaller 81% to 320 million yuan. All this shows that the company’s revenue mix is still quite unstable, as it searches for a return to sustainable growth.

Cash burn and mounting inventories

On the financial front, Topstar’s operating cash flow was negative in the first quarter of 2026, as it recorded an outflow of 130 million yuan — up 119% from the same period last year. Its net cash burn across the entire company reached 295 million yuan for the quarter, in stark contrast to its 380 million yuan net inflow a year earlier.

Inventory turnover days have been on an equally troublesome trajectory, lengthening by 72% from 90 days in 2023 to 155 days last year, before further ballooning to 230 days in the first quarter of this year.

A key element to Topstar's revenue stabilization is the overseas market, whose contribution has been growing steadily. Over the past three years, foreign sales grew from 11% of overall revenue in 2023 to 26.6% in the first quarter of this year.

The overseas expansion owes mostly to Vietnam and Indonesia. But even here, a closer look reveals that underlying revenue generation from overseas sales is less inspiring than the rising ratio of export sales to its overall mix. Instead, that rise is mostly a byproduct of the company’s plunging revenues in its home China market.

Revenues from Vietnam climbed 22% year-over-year to 500 million yuan in 2024, only to sink 27.7% to 365 million yuan last year, before rocketing more than sevenfold year-over-year to 99.7 million yuan in the first quarter of 2026. Indonesia delivered 14.97 million yuan in revenue in the first quarter of 2026, up from zero in the same period last year. Meanwhile, revenues in other foreign regions contracted by nearly 10% to 28.18 million yuan in the first quarter of 2026. As the data plainly shows, the company's international revenue remains volatile and patchy, and total sums are still quite minor.

Judging from its performance and recent financials, Topstar is in the process of navigating a pivotal transition that’s likely to determine its future. It’s trying to strip out its money-losing businesses, while expanding other areas with better potential, resulting in top-line contraction and an unstable bottom line. Its pivot appears to be mostly on track for now. But the strategy is still in an early stage, and more time is needed to gage the outcome.

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The Shanghai supplier of electric-drive systems kept growing this year even as China’s domestic EV market slowed, but half its revenue depends on a single automaker

Key Takeaways:

• Leadrive’s revenue rose 73.3% in the first five months of 2026, supported by the country’s booming exports, even as China’s domestic EV market contracts
• Half of the electric-drive component maker’s sales come from a single customer, leaving it exposed to customer concentration and price pressure

By Hu Minghe

Leadrive Technology (Shanghai) Co. Ltd. is hoping to land on investor radars alongside China’s higher-profile electric vehicle (EV) and battery producers, positioning itself as a key supplier of the machinery that powers those cars. The company renewed its application for a Hong Kong IPO last week, seeking funds to expand its production of electric-drive systems, the components that control the flow of electricity between an EV’s batteries and its motor.

Less visible than an electric car’s exterior design or battery pack, electric-drive systems play a key role in EVs by controlling how electricity from batteries is converted into motion.

The company’s business has grown rapidly in sync with China’s soaring EV sector. Its revenue jumped more than 10-fold from 159.8 million yuan ($23.6 million) in 2023 to 2 billion yuan in 2025, before increasing another 73.3% year-on-year to 956 million yuan in the first five months of 2026. Its gross margin improved to 9% from negative 8.3% over that time, although the company remained in the red with a net loss of 127.5 million yuan in the latest period.

Founded in 2017, Leadrive is part of an emerging new group of lower-profile Chinese automotive suppliers. China’s first generation of EV champions was dominated by automakers such as BYD (1211.HK; 002594.SZ) and battery giant CATL (3750.HK; 300750.SZ). The next wave consists of less visible companies in the EV supply chain, making everything from power electronics to automotive semiconductors.

Leadrive’s challenge is that this market has some powerful competitors. Many leading automakers, including BYD and Tesla (TSLA.US), develop important electric-drive technologies internally. That means independent suppliers must convince automakers that outsourcing these systems can provide better technology, lower costs, or ideally both.

Exported EV leader

Leadrive has already become a significant player in China, with 3.7% of the country’s motor-controller market in 2025, according to third-party market data in its prospectus. More importantly, Leadrive was first in its class from China based on revenue for motor controllers used in exported vehicles last year, highlighting how the company has benefited from the overseas expansion of Chinese automakers.

That export-leading status also highlights one of Leadrive’s biggest weaknesses, namely, its heavy dependence on its largest customer. It doesn’t name that customer in the prospectus, but the description matches Chery Auto (9973.HK), China’s largest passenger-vehicle exporter.

The relationship has become the main driver of Leadrive’s growth. Its largest customer has been crowding out other buyers over the last three years, growing from 10.7% of Leadrive’s revenue in 2023 to 57.1% last year, before easing to 50% in the first five months of 2026. The relationship now covers 32 vehicle models, with Leadrive opening a factory in Chery’s home city of Wuhu in late 2024 to support the automaker’s expanding production.

That close relationship has helped Leadrive scale quickly, but also highlights the risks of relying on one customer. Automotive suppliers often benefit from such relationships because switching to rival companies can be costly. However, Chery’s agreement renews annually after an initial three-year term, meaning Leadrive would receive a massive blow if the deal gets scaled back or terminated. Chery’s critical role also gives it huge power to demand lower prices for its bulk buying, which could pressure Leadrive’s margins.

For now, at least, Leadrive’s strength in exported EVs has placed it on the right side of one of the strongest new trends in China’s auto market. China’s domestic EV sales have fallen sharply this year as incentives were reduced, ending several years of explosive growth. Domestic new-energy vehicle (NEV) sales fell 13.4% in the first half of the year, as the broader Chinese car market fell even more. But exports surged over that time, with NEV exports more than doubling to 2.36 million units.

Chery has been one of the biggest beneficiaries of that shift. Its first-half exports jumped 71.5% to 943,817 vehicles, while its overall NEV sales increased 32.3% – even as many NEV makers logged declines.

Shielded from domestic slowdown

That export-driven growth has helped shield Leadrive from China’s domestic slowdown, but it also exposes the company to rising trade barriers against Chinese vehicles. The EU has imposed anti-dumping duties on China-made EVs, while markets including Mexico and Brazil have also increased restrictions on Chinese imports. And the U.S. bans Chinese EV imports outright.

At the same time, Leadrive faces pressure from China’s automotive price war, which has trickled down the food chain as carmakers pressure their suppliers for lower prices to stem their losses.

Leadrive’s average motor-controller selling price tumbled from 4,328 yuan in 2023 to 2,473 yuan in 2025, a decline of about 43%. It more than offset that decline with explosive sales volume growth over the same period, as the number of units sold rose nearly 20-fold to more than 614,000 units.

The company has responded to margin pressures by bringing more production in-house to reduce costs. Power modules were previously outsourced but are now produced internally, helping that segment’s gross margin rise to 26.2% in the first five months of 2026. Overall profitability, however, remains limited, with Leadrive accumulating more than 1 billion yuan in losses since 2023.

Leadrive is trying to broaden its customer base beyond Chery. A customer that matches the description of Changan Auto (000625.SZ) contributed 13.3% of its revenue in the first five months of 2026. Another NEV maker that matches the description of Seres Group (9927.HK 601127.SH) contributed 9.8%. And German supplier Schaeffler (SHA.DE), also a Leadrive investor, has become another major customer and provides a route into Volkswagen supply chains.

Leadrive says one Volkswagen-linked project covering four Chinese models has already entered mass production, while another overseas hybrid project is expected to begin production in 2027.

Leadrive has a strong pedigree in the investment community. Legend Capital is its largest outside shareholder, while a separate fund backed by Lenovo also invested. A Volvo investment unit became a shareholder in 2023, linking Leadrive to the Swedish automaker’s parent, Zhejiang Geely, one of China’s leading private carmakers.

For Leadrive, these relationships offer potential bridges between China’s fast-growing EV market and foreign auto networks as it looks to expand beyond its domestic customer base.

Leadrive’s rise shows how China’s EV industry is serving up a new generation of companies for investors beyond car brands and batteries that have taken most of the spotlight until recently. Its Hong Kong listing comes at a crucial moment as the company tries to outrace a looming correction that many believe is long overdue in China’s heavily oversupplied NEV industry.

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The SLC NAND flash memory maker is capitalizing on strong demand for its chips, which lifted it into the black this year

Key Takeaways:

• XTX Technology has filed to list in Hong Kong, reporting it swung to a profit in this year’s first quarter on booming demand for its memory chips
• Prices for the company’s SLC NAND flash memory more than tripled during in the first three months of 2026 from a year earlier

By Bai Xin Rui

The global AI explosion is shining a spotlight on the importance of related infrastructure, touching off parallel booms for related hardware like servers, computing chips and data centers. That’s lit a fire under many companies’ stocks, especially makers of computing and memory chips used in high-end AI computing.

Now, XTX Technology Inc., one of China’s leading fabless code storage flash memory chip makers, is hoping to ride that wave to a Hong Kong IPO, shifting gears from its previous plan to list on the country’s domestic markets in Shanghai and Shenzhen. The company submitted its IPO application to the Hong Kong Stock Exchange earlier this month, with heavyweight Citic Securities and the smaller GF Securities as joint underwriters.

XTX was founded in April 2014 by Chairman Long Dongqing, a chip veteran whose resume includes engineering stints at Japan’s Renesas (6723.T), Europe’s STMicroelectronics (STM.US), and America’s Freescale Semiconductor, now part of Dutch firm NXP (NXPI.US). Long currently holds 34.9% of the company, while Ningbo Hongshan Zhisheng holds 9.6%. Pu Xun, a managing director at private equity firm HSG, formerly Sequoia China, also serves as a non-executive director.

XTX designs and sells code-storage flash memory chips, a category that includes NOR flash and SLC NAND flash, which are manufactured by third-party fabs. As AI gains traction, it is rapidly generating strong demand for such chips to meet the technology’s high performance computing needs. XTX ranks fourth globally among fabless makers of SLC NAND flash, its main product. Boasting high endurance and low error rates, such chips are widely used in server system drives, industrial equipment, caching solutions and medical and military equipment.

The global market for SLC NAND flash was worth $5.1 billion in 2025. But with the widespread adoption of AI, the figure is expected to balloon to $42.7 billion by 2030, growing at a breakneck average annual rate of 53% over that time, accounting for 7.9% of the overall flash memory market, according to third-party market data in the listing document.

Global tech giant exodus

Current global leaders in the SLC NAND flash sector include multinationals such as U.S.-based Micron Technology (MU.US) and Japan's Kioxia (285A.T). But most of those have announced plans to discontinue or downsize their legacy SLC NAND flash production to pivot toward the mid- to higher-end of the memory market.

Despite their retreat, demand for legacy SLC NAND flash remains strong, with downstream clients aggressively stockpiling inventory in the second quarter of this year. As supplies shrink, the average price of SLC NAND flash skyrocketed between 130% and 150% in the first half of this year alone.

Analysts expect price increases to moderate slightly in the second half of the year, but are still forecasting additional gains of 70% to 75%. The strongest gains are expected for industrial and automotive-grade products, which require more rigorous specifications.

XTX derives most of its revenue from SLC NAND flash. Its revenue reached 224 million yuan ($33 million) in the first quarter of this year, up 77.4% year-over-year. SLC NAND flash generated 149 million yuan during the quarter, accounting for about two-thirds of total revenue and up 120% annually. The segment’s gross profit hit 101 million yuan, up more than 10-fold year-on-year, accounting for 81% of the company’s overall gross profit.

Sliding volume, soaring prices

It’s worth noting that XTX’s sales volume actually fell this year, even as its revenue and profit soared. The company sold just 11.5 million units in the first quarter, down 34.4% year-over-year. Constrained by a tight supply of semiconductor wafers, one of the main components for chip manufacturing, XTX strategically allocated its limited inventory to higher-value clients.

Skyrocketing prices for SLC NAND flash more than offset the lower chip output, as XTX’s average selling price more than tripled from 3.89 yuan per unit in 2025 to 13.04 yuan per unit this year. That surge lifted the company to a 75.89 million yuan profit in the first quarter of this year from a 2.7 million yuan net loss a year earlier.

While surging prices lifted XTX into the black, ongoing shortages of upstream wafers remain one of the company’s biggest risk factors over the near-term, especially if its sales volumes continue to slide. Potential reversals by international giants Micron and Kioxia, if they decide to re-focus on the segment again, remain another major variable that could dictate whether XTX can sustain its newfound profits.

At the same time, the global memory chip sector has historically been very cyclical. Its boom-and-bust cycles were deeply intertwined with the smartphone and PC sectors, which traditionally depressed their valuations below 15 times forward price-to-earnings (P/E). Such levels were far lower than the multiples enjoyed by other semiconductor peers, such as CPU or GPU firms, whose valuations often exceed 30 times.

Investors are currently laser-focused on whether explosive growth in AI demand could perhaps strip memory chip stocks of their cyclical label and lead to a longer-term expansion, lifting the stocks to higher multiples. But skeptics question if real-world AI applications can meaningfully boost these chipmakers’ earnings, since prices will inevitably come down as producers boost their capacity. Should the AI narrative fail to materialize or stumble, memory chip valuations across the board could come under intense pressure.

Despite their recent stock run-ups, shares of Micron and Kioxia still only trade at modest estimated P/E ratios of 8 times and 9 times, respectively. That means XTX might need to be conservative in pricing its IPO shares to attract investor interest. It could try to be more aggressive by targeting investors who believe that memory chip stocks are set to shed their cyclical nature, though that could scare away many of the AI skeptics. Either way, XTX looks relatively well positioned to ride the upside of expanding valuations as long as chip prices keep rising and that translates to growing profits.

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The PCB maker’s Hong Kong IPO looks aimed at tapping demand for AI concept stocks, even though related high-end products make up a relatively low proportion of its revenue

Key Takeaways:

• Kinwong has filed for a Hong Kong IPO, reporting its gross margin fell from 23.2% in 2023 to 18.7% in the first four months of this year
• The PCB maker’s revenue grew 18% in the first four months of this year, but its profit declined by 25%

By Cheng Shui Tong

The AI era has ushered in breakthrough growth for printed circuit board (PCB) makers, turning this formerly anonymous group into hot property on the Hong Kong Stock Exchange. The latest to jump on that gravy train is Shenzhen Kinwong Electronic Co. Ltd. (603228.SH), which filed its preliminary prospectus for a Hong Kong listing earlier this month.

The company is no slouch within its sector, ranking first among global automotive electronics PCB suppliers with 10.6% of the market, according to third-party market data in its listing document. Its standing is a bit lower among all PCB suppliers, but even in this group it ranks 11^th worldwide and fifth among its Chinese peers, with 2.5% of the global market.

Automotive PCB leader

The PCB industry where Kinwong operates has become a highly speculative concept area in the current market thanks to strong demand from AI servers and other computing equipment. Still, its strong position in that market looks somewhat attractive for investors chasing such AI concept stocks.

The company has been growing steadily over the past three years both in terms of revenue and profit. Its revenue rose from 10.75 billion yuan ($1.58 billion) in 2023 to 15.31 billion yuan last year, while its profit climbed from 911 million yuan to 1.24 billion yuan. That formula changed slightly this year, however, as its profit began to retreat, even as its revenue kept growing. Its revenue rose 18% year-on-year to 5.34 billion yuan in the four months to April. But its profit slumped 25% to 317 million yuan, as the company blamed rising raw material prices.

In this case, the culprit behind those price increases is the copper that’s a key raw material for PCBs. The price of copper has risen about 40% over the last year to about $13,500. The company estimates that for every 10% increase in the price of copper, its gross margin will decline by 1.2 percentage points. Consequently, raw materials as a percentage of the company’s cost of sales have been creeping steadily upward, rising from 60.4% in 2023 to 62.9% in the first four months of 2026.

Slumping gross margin

As its cost of sales has grown, the biggest victim has been Kinwong’s gross margin. That figure dropped steadily from 23.2% in 2023 to 21.6% last year, and sank to just 18.7% in the first four months of 2026 as copper prices spiked. Within its portfolio, the company’s gross margin for PCB products was just 12.3% in the first four months of this year, down more than 4 percentage points year-on-year, hitting its overall gross profit margin.

Gross margins for its relatively high-end multilayer printed circuit boards (MLPCBs) and high-density PCBs (HDPCBs) have experienced even larger plunges. The former fell by nearly half from 18% in the first four months of 2025 to 9.7% in the same period this year, while the latter dropped from 19.9% to 12.2% over that time. MLPCBs, a relatively high-end product, accounted for 51.6% of the company’s total revenue in the first four months of 2026, while HDPCBs represented 7%.

As with many Chinese manufacturers, Kinwong also gets sharply higher margins for its products sold abroad than those in the ultra-competitive China market. Its gross margin for the Chinese market has historically lingered in the single digits, standing at a mere 8% in the first four months of this year. By comparison its overseas gross margin was 35.1% as recently as 2023, though even that figure nosedived to 17.8% in the first four months of this year.

Kinwong’s biggest business is PCBs for automotive electronics, which accounts for more than 40% of its revenue. That market was growing at a relatively brisk 8.4% from 2020 to 2025, though the rate is expected to slow to 6.2% between 2025 and 2030, according to its listing document.

Within the PCB universe, Kinwong’s margins not only look squeezed, but are also lower than its industry peers. Delton Technology (1989.HK; 001389.SZ), which went public in March and primarily makes high-speed and high-frequency high-end PCBs, had an overall gross margin of approximately 33% last year. Victory Giant (2476.HK; 300476.SZ), which listed in April and focuses on high-performance computing PCBs, boasted a similarly high gross margin of 34% last year. Meanwhile, the recently listed Circuit Fabology (9630.HK; 688630.SH), the world's largest supplier of PCB direct imaging equipment, had a gross margin approaching 40%.

Like many of the other PCB makers to recently list in Hong Kong, Kinwong’s stock is already traded on China’s domestic A-share market, in this case listed in Shanghai since 2017. Success for the new Hong Kong listing will hinge on whether the city’s more international investor pool feels the stock is reasonably priced.

Discount required

Among Chinese PCB manufacturers making second listings in Hong Kong this year, nearly all have sold their Hong Kong shares at significant discounts to existing listings in Shanghai and Shenzhen. That strategy has provided significant upside for their Hong Kong shares, which have often logged big initial gains as investors narrowed the valuation gap with their Shanghai and Shenzhen counterparts.

Take Delton, for example, which discounted its Hong Kong shares by nearly half relative to its Shenzhen-listed stock. Since then, the Hong Kong stock has risen 128%, narrowing the gap to roughly 30% with the Shenzhen ticker. Victory Giant also offered its Hong Kong stock at a nearly 40% discount compared to its Shenzhen shares. That’s helped the Hong Kong stock log post-listing gains of about 40%, narrowing the discount to the Shenzhen shares to about 17%.

Similarly, Circuit Fabology, whose stock debuted last week, offered its Hong Kong shares at a hefty 60% discount compared to its Shanghai stock. That helped to trigger an 80% spike in its share price when the stock debuted, narrowing its discount to around 20% of the Shanghai shares.

Kinwong's Shanghai listing currently values the company at about 70 billion yuan, with a price-to-earnings (P/E) ratio of about 55 times. That’s notably lower than the 92 times for Shennan Circuit (002916.SZ) and 68 for WUS Circuit (002463.SZ), both of which are listed in Shenzhen. That disparity owes primarily to higher profitability for these two companies compared with Kinwong. Accordingly, Kinwong's may need to offer its own healthy discount compared to its Shenzhen-listed shares to ensure its Hong Kong gets a warm reception from investors.

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Parent Chang’an Auto’s chairman has said his company will strongly support the NEV brand, whose sales plunged by more than half in the first five months of 2026

Key Takeways:

• Avatr’s new Hong Kong IPO application shows it lost a combined $1.6 billion over three years, as it spent heavily on R&D
• The EV maker’s unit sales dropped by more than half year-on-year to 20,160 in the first five months of 2026, after it sold 122,000 units in all 2025

By Edith Terry

Lest any of the many workers at Avatr Technology (Chongqing) Co. Ltd. worry about their employer’s relatively late arrival to China’s hyper-competitive electric vehicle (EV) sector, they needn’t. At least those were the soothing words coming from Zhu Huarong, chairman of the company’s seasoned parent, Chang’an Automobile Group, one of China’s top four state-owned automakers.

“Chang’an Automobile will fully support Avatr whenever it needs us – providing funds, personnel and technology,” Zhu proclaimed at a car launch event in 2025.

Avatr is just a piece of Changan’s aggressive plan to become one of the world’s top 10 automakers by 2030, with a global target of 5 million units by then, 60% of those new energy vehicles (NEVs). That would mark a more than 70% increase from the 2.9 million total vehicles the company sold in 2025.

Now, Avatr, one of three Chang’an NEV brands, which focuses on the lower end of the luxury market, is aiming to charge up its own finances by filing last week for a Hong Kong IPO.The company has launched four models since 2022, including both battery and extended range models, priced between 200,000 yuan ($29,437) and 700,000 yuan.

Avatr bills itself as combining three well-known brands in an asset-light model. Its batteries come from industry leader CATL, while its intelligent drive technology harkens from smartcar technology giant Huawei. Chang’an provides the company’s manufacturing muscle on an outsourced basis, while Avatr focuses on product design, development and sales.

The joint sponsors for the listing are Citic Securities and CICC, both heavyweights.

Avatr’s latest application is its second, after its original filing last November expired before it could complete its IPO. At the time of its first filing, media reports said it was targeting up to $1 billion in proceeds, which it would use to launch five new models or upgrades by 2026 and 17 new models by 2030. The reports said Avatr planned to expand to over 80 countries by 2030.

Strong revenue growth

The latest listing document shows strong topline revenue growth that rose nearly 70% last year to 25.6 billion yuan ($3.77 billion) from 15.2 billion yuan in 2024. Its unit sales growth has been equally dramatic, rising from 20,021 units in 2023 to 122,702 vehicles in 2025. Its gross margin has been rising as it gains experience and scale, reaching 9.4% last year from 6.3% in 2024 and a negative figure in 2023.

On its bottom line, the company’s loss of 3.5 billion yuan last year was 15% narrower than 2024, though both figures still represent massive red ink. And perhaps most worrisome, Avatr’s total NEV sales plunged by more than half in the first five months of 2026 to just 20,160 units from 43,700 in the same period of 2025, according to industry data.

The drop isn’t too surprising, since China’s domestic passenger NEV sales fell 19.7% year-on-year in the first five months of 2026. But Avatr’s far larger decline than the overall market certainly isn’t too reassuring.

While most of its sales are domestic, the company has also performed poorly overseas. In the first five months of 2026 it sold just 2,949 vehicles abroad from its network of 95 distribution points in 43 countries and regions.

The obvious and unapologetic reason for Avatr’s losses is its high R&D expenses, which are quite typical in the sector. At the end of last year, 2,186 employees, or 55% of its workforce, were R&D personnel. Its 2025 R&D expenses totaled 2.1 billion yuan, or 8% of revenue, roughly triple the 660 million yuan it spent in 2023.

The company shows no sign of slowing down in either its international ambitions or R&D spending. It currently operates a global design center in Munich with 144 employees, who play “a pivotal role in shaping the luxurious appeal and world-class aesthetic complexity of our vehicles,” it said in the listing document. It has hired the former artistic director of menswear for Louis Vuitton to help design a limited edition of its AVATR 012 sedan, as well as the former creative director for Givenchy for its limited edition AVATR 011 model.

Parental backing

Whether Avatr’s strategy is reckless or prudent may depend on just how much Zhu Huarong and Chang’an are ready to backstop the company. Chang’an’s own overall sales fell by 21% in the first quarter of 2026 to 557,500 units, with EV sales down 13% to 168,600 units. Besides Avatr, Chang’an also owns the mass market Deepal NEV brand, and Nevo, a mainstream and hybrid brand.

So, what has Changan done to show its love for Avatr? One of its most consequential steps has been integrating Avatr’s manufacturing with Deepal, which focuses on more affordable NEVs costing 150,000 yuan to 300,000 yuan.

Both brands will continue to be marketed separately, but the backend link will help to reduce costs. When Avatr formed a joint stock company in preparation for its IPO last September, Zhu Huarong stepped down as its chairman and was replaced by the younger Wang Hui, a 22-year Chang’an veteran born in 1981. Media reports say Wang was the driver behind Avatr’s relationship with CATL and Huawei, and was also general manager of Chang’an’s overseas business development and Southeast Asia departments.

Chang’an initially set up Avatr as a 50-50 joint venture with private NEV startup Nio (NIO.US; 9866.HK), before Nio’s own IPO and before Chang’an announced a “joint effort” with CATL and Huawei to build a premium intelligent new passenger electric vehicle (NEPV) brand in 2020. After Nio exited, Chang’an raised 19 billion yuan for Avatr in four financing rounds, ending up with 38 shareholders and a 41% controlling interest in the company.

CATL currently holds 9.2% of Avatr’s pre-IPO shares. Huawei is principally a supplier through its smart automotive business, Shenzhen Yinwang Intelligent Technology, which is an open platform for Huawei’s Qiankun smart driving system.

Avatr and another NEV maker, Seres (9927.HK), now each owns 10% of Yinwang, each investing 11.5 billion yuan. Avatr closed its deal in February 2025, and included its share of profits from the joint venture on its balance sheet for 2025.

Just how big a role Yinwang will play in Avatr’s future is an open question, as the former’s customers also include a long list of other state-owned enterprises, from SAIC Motor (600104.SH) and Guangzhou Auto(2238.HK; 601238.SH) to newly listed Voyah Auto (7489.HK). But a more immediate issue for Avatr, if it hopes to impress Hong Kong investors, will be showing how it plans to halt its skidding domestic sales and how its overseas network can provide a more meaningful contribution to the business.

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The company will use a majority of the $68 million it raised from its Hong Kong listing to expand its network of traditional Chinese medicine hospitals and clinics

Key Takeaways:

• Tong Ren Tang Healthcare made its Hong Kong IPO at a lower price, backed by its status as China’s most famous healthcare brand.
• Ranked as China’s biggest private traditional Chinese medicine operator, the company hopes to become a consolidator in the fragmented market

By Doug Young

Is there still room for anything other than AI concept stocks in Hong Kong’s hottest IPO market in years, including companies that have made astronomical debuts despite short track records, little revenue and massive losses?

Beijing Tong Ren Tang Healthcare Investment Co. Ltd. (2667.HK) is finding out with its trading debut on July 7 – its second attempt after a last-minute postponement of its original plan to debut in March amid market uncertainty.

The revised offering raised HK$532 million ($68 million), after the company calibrated a more conservative pricing strategy compared with its initial plans, signaling a more pragmatic valuation approach in the current market. It sold 108 million shares for HK$5.50 apiece.

50% cornerstone commitment 

Tong Ren Tang Healthcare secured cornerstone backing from Airport Port Technology Capital, Aurora SF and CICCFT, which together bought HK$296.1 million of the IPO shares, representing about 50% of the total on offer if the over-allotment option is not exercised. That underscores investor confidence in its traditional Chinese medicine (TCM) healthcare services business.

To cushion the share price around the listing, Tong Ren Tang Healthcare has deployed a team of stabilization dealers who can buy in the market if the price falls below the offer level in early trading. The mix of adjusted pricing, strong cornerstone backing and post-listing support are expected to deliver a smoother debut and protect investor value in a cautious Hong Kong IPO environment.

The firm now ranks as China’s largest private traditional Chinese medicine operator by patient visits, with annual visits growing 39.4% each year on average as it expands its network of hospitals, outpatient centers and clinics.

It operates 13 self-owned hospitals, outpatient healthcare centers and clinics, provides management services for another 13, and runs an internet hospital that pools TCM experts from across the country. It also cooperates with more than 500 external pharmacies, enabling it to send electronic prescriptions to partner pharmacies near customers.

A 357-year TCM brand

Tong Ren Tang Healthcare has a 357-year pedigree to pitch to investors, as arguably the world’s oldest TCM brand. It’s worth noting the company’s promotion expenses were just 0.2% of revenue in 2025, a figure it links to the Tong Ren Tang brand moat and synergies across its integrated TCM business, spanning herbal sourcing, manufacturing, clinics and retail, which drives patient traffic and sales without heavy advertising.

Demographic aging and consumption upgrades are fueling strong demand for TCM, driven by rising needs for chronic disease management and preventive care, alongside broader adoption across age groups. At the same time, supportive policies under China’s 14th Five-Year Plan and expanded insurance coverage are providing long-term tailwinds, and a fragmented market with private institutions holding 54.9% share offers consolidation opportunities for leading players like Tong Ren Tang Healthcare.

According to research in the prospectus, the highly fragmented TCM market is expected to grow 9.5% annually between 2025 and 2030 to reach 1.7 trillion yuan ($251 million) by the end of that period. That offers Tong Ren Tang Healthcare the opportunity to act as a consolidator of the many local providers that operate at a small scale. The company plans to keep adding self-owned and managed facilities, while leveraging its online hospital and supply chain to standardize services and capture share from smaller competitors.

Reflecting its potential to emerge as a consolidator, three of the company’s self-owned facilities were acquired since 2022, including two in 2024. All three are in the affluent Yangtze River Delta region, including two in Shanghai, indicating the company intends to focus on regions with the greatest consumption power where it can fully leverage its well-known brand.

Tong Ren Tang Healthcare’s financials look respectable with its revenue remaining stable last year at 1.17 billion yuan, almost unchanged from 1.18 billion yuan the previous year.

Healthcare services, delivered by more than 2,700 physicians across its network, accounted for about 85% of revenue, rising slightly to 995 million yuan last year from 988 million yuan in 2024. Product sales, the second-largest category at around 13% of revenue, fell to 150 million yuan from 167 million yuan, as the company adjusted one of its recently acquired facilities to avoid competing with Tong Ren Tang Group.

Management services, while still small at 16.1 million yuan in revenue last year, show significant potential, as many independent TCM hospitals and clinics seek specialist operators to raise standards and quality. In a recent example, Tong Ren Tang Healthcare signed a collaboration agreement in April with Guizhou Maotai Hospital, partnering with another prominent name in the region known for China’s best-known liquor, Moutai.

The company reported a gross margin of 18.9% last year and its profit fell to 33.8 million yuan from 46.2 million yuan in 2024. It cautioned that the 2024 figure included a 17.1-million-yuan one-time gain from an asset sale that did not recur in 2025.

In its IPO prospectus, the company said it expects to use about 64% of its listing proceeds to expand its network and enhance its service capacity, including plans to acquire three to five medical institutions by the end of 2030. It also plans to open three medical institutions on its own or through joint ventures with partners using an asset-light model.

The less aggressive listing valuation looks likely to help Tong Ren Tang Healthcare cross the finish line this time, though it still faces the challenge of standing out in a crowded field. A sizable 16 firms made their trading debuts in the last week of June alone, and another 15, including Tong Ren Tang Healthcare, are set to start trading this week.

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The Hefei-based DRAM maker is heading to Shanghai’s STAR Market as AI demand and geopolitical tensions bring new urgency to China’s semiconductor self-sufficiency drive

Key Takeaways:

• CXMT’s planned 29.5 billion yuan IPO comes as AI demand has turned memory chips into one of the hottest parts of the semiconductor market
• The company has become China’s clear DRAM leader and the world’s fourth biggest supplier, but still trails Samsung, SK Hynix and Micron in scale and customer trust

By Hu Minghe

One of China’s most important semiconductor IPOs this year is not coming from traditional tech hubs in Beijing, Shanghai or Shenzhen. Instead, it’s coming from Hefei, an inland provincial capital better known a generation ago for universities and government offices than its technology.

But that’s been changing over the past two decades, as Hefei becomes one of China’s boldest local-government technology investors, using state capital to build or attract companies in displays, electric vehicles (EVs), batteries, AI, quantum technology and semiconductors. Its best-known bets include names like display maker BOE, EV maker Nio, battery maker Gotion and AI company iFlytek, to name a few.

Now, ChangXin Memory Technologies (CXMT) is rapidly rising as Hefei’s newest tech giant. Founded in 2016 with government backing, the company is China’s leading maker of DRAM, the working memory used by phones, PCs and servers when they run apps and process data. Last month CXMT was approved to list on Shanghai’s Nasdaq-style STAR Market, where it plans to raise a hefty 29.5 billion yuan ($4.3 billion).

Companies typically list within three to four months after getting such approval. The IPO could become the largest this year on China’s A-share markets in Shanghai and Shenzhen, and one of the biggest ever on the STAR Market since its launch in 2019.

The timing could hardly be better. AI data centers have turned memory from a cyclical commodity into a goldmine due to short supply. Semiconductor stocks are hot. And business for CXMT, like many of its peers, is currently booming. Tencent has reportedly signed a multiyear server-DRAM deal with the company worth more than 20 billion yuan, and Apple is reportedly lobbying Washington for clearance to buy CXMT memory, as soaring costs have forced price increases for some iPads and MacBooks. That means the listing is almost certain to attract huge investor interest, putting the company on the financial markets map as a made-in-China challenger to global leaders Samsung Electronics (005930.KS) and SK Hynix (000660.KS), both from South Korea, and Micron Technology (MU.US) from the U.S.

The man behind the company

The man behind CXMT is Zhu Yiming, whose career closely follows China’s chip self-reliance story. Zhu studied at Tsinghua University, a key training ground for China’s semiconductor engineers, founders and policymakers. He later studied at Stony Brook University in New York and worked at U.S. memory chip companies before returning to China in 2005. His reason for coming back was simple: China was becoming one of the world’s largest chip consumers, but still lacked strong domestic memory suppliers.

Zhu’s first major company, GigaDevice (3986.HK; 603986.SH), focused on NOR flash, the small memory chips that help devices store boot code and firmware, and MCUs, the tiny control chips used inside appliances, cars and connected devices.

While GigaDevice proved Zhu could build memory chips, CXMT was a harder second act. DRAM requires huge factories costing billions of dollars, constant process upgrades and durability to survive brutal price cycles. Hefei made that leap possible. When Zhu moved into DRAM, private investors saw the sector as too risky. But Hefei was willing to take the chance, reportedly taking an 80% stake in the first phase of a 150 billion yuan 12-inch wafer project.

That patience is now paying off. CXMT spent years absorbing losses, but the current memory boom has transformed its financial profile overnight. After logging 61.8 billion yuan in revenue last year, the figure reached 50.8 billion yuan in this year’s first quarter alone, along with 24.8 billion yuan in profit.

CXMT is now big enough to land on radar screens of both investors and device makers, but is still far from the top tier. The three leading global incumbents still control more than 90% of the DRAM market, while CXMT’s share was 7.67% in the fourth quarter of 2025, making it the world’s fourth-largest DRAM maker. Its chips have crossed a practical threshold for more mainstream customers, with its DDR and LPDDR products used in servers, PCs, smartphones and other devices.

Distant fourth

But the company still lags its larger rivals in scale, R&D spending, product breadth, international supply-chain depth and high-bandwidth memory (HBM) used in AI computing. The company has reportedly faced yield challenges with DDR5, a newer generation of memory used in PCs and servers, showing how hard it is for challengers to close the technology gap.

China’s domestic market gives CXMT its best opening, especially in the country’s current self-reliance drive. Chinese companies buy huge volumes of memory for consumer electronics, cloud computing and now AI servers, but have long depended on foreign suppliers. Tencent’s reported deal shows that one of China’s most important cloud and AI companies is willing to use domestic DRAM as well. Apple’s reported interest would add a different kind of validation, showing that global device makers may also look to CXMT when supply is tight.

The local competitive field is much thinner. Yangtze Memory Technologies (YMTC) is China’s other major memory champion, but it mainly makes NAND flash, which functions like a hard drive for storage in phones, laptops and solid-state drives, rather than DRAM. Fujian Jinhua and Huawei-backed SwaySure are closer in product focus, but both remain far smaller in DRAM. That gives CXMT unusual scarcity value: outside China, it is still chasing the giants. But inside China, there are no comparable alternatives.

Legal and geopolitical risks still hang over the company. DRAM is protected not only by technological barriers, but also by patents and export controls. Fujian Jinhua previously became entangled in Micron-related disputes over patents and allegations of trade secret theft, and was also damaged by U.S. restrictions. CXMT has tried to build a more formal intellectual-property base, including patent licenses for self-developed technology, as well as acquisitions from Qimonda, the former memory unit of Infineon (IFX.DE). But Micron has still warned that CXMT chips might violate some of its patents.

Washington adds another layer of uncertainty. The U.S. has considered adding CXMT to the Commerce Department’s Entity List, which would sharply restrict CXMT’s access to U.S. software, materials and manufacturing technology. But such a move has reportedly been held back for now. Separately, the Pentagon has also designated CXMT as a Chinese military company due to its affiliation with two central government agencies. The same state support that helped CXMT thrive at home could make it harder to win trust abroad.

That is the tension behind the IPO. Hefei helped CXMT survive long enough to profit from the current AI memory boom. Public investors will now decide whether China’s DRAM champion can use that momentum to become a real fourth pillar in the global memory market, or whether it’s destined to thrive only in its protected market at home.

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The maker of a key component for new energy batteries has filed for what could become the biggest New York IPO by a Chinese company in more than a year

Key Takeaways:

• Londian Wason could become only the third Chinese company to list on Wall Street this year, following its application for an IPO that could raise around $350 million
• The copper foil maker’s business has gotten off to a strong start this year, after losing money in 2024, as the highly cyclical new energy battery industry rebounds

By Doug Young

When Wang Guanran entered the prestigious George Washington University in Washington, D.C., as a 19-year-old international relations and economics major in 2019, he probably never dreamed he would lead a company preparing for a massive Wall Street IPO just six years later. But then again, maybe he did, given his status as son of a former Chinese securities regulator who later built a business empire making a key material for new energy batteries.

That’s the personal story behind Londian Wason New Energy Tech Inc., a copper foil maker that’s attempting to become only the third Chinese company to list on Wall Street this year, with its application last week for a New York Stock Exchange IPO. Such listings were once common, numbering in the dozens each year. But that’s slowed to a crawl this year, as companies come under pressure from regulators on both sides of the Pacific.

In this case Londian Wason’s Wang family ties are almost certainly a factor behind what’s likely to be a successful New York listing in a difficult environment. Londian Wason is part of an empire built by Wang Guanran’s father, Wang Weidong, who worked at the China Securities Regulatory Commission (CSRC) in the 1990s, before striking out on his own to cobble together a series of companies, some of which lie at the core of Londian Wason.

The Chinese securities regulator must approve all Chinese IPOs in offshore markets, including the U.S. The CSRC has become quite strict about approving U.S. listings lately, partly due to U.S.-China tensions and also in a bid to choke off many of the smaller, low-quality companies that were listing in New York in recent years.

Since Dec. 12 last year, the CSRC has only approved two new Wall Street listings: Londian Wason and used car trading specialist DSC Holdings, which made its Nasdaq trading debut last month after raising about $50 million.

Unlike many of the earlier Chinese listings that typically raised less than $20 million and were underwritten by small, boutique investment banks, first DSC’s and now Londian’s IPO have big names attached. Londian’s counts Cantor Fitzgerald, CMB International and Huatai Securities among its underwriters, all fairly respectable names in the U.S. and China. The company also boasts an A-list of investors from the electric vehicle (EV) battery space, including South Korea’s SK Inc. and Mirae Asset, as well as Chinese auto giant GAC.

Londian Wason’s customer list is also a who’s-who of battery makers, including LG Energy Solution, Panasonic Industrial Materials, SK On, Samsung SDI, CATL and BYD.

Londian Wason didn’t disclose a fundraising target in its prospectus. But Renaissance Capital estimated the listing could raise about $350 million, which would be the biggest IPO since milk tea chain Chagee raised $411 million in its April 2025 Nasdaq listing.

Cyclical business

While Wang Guanjun looks slightly young for such a big job, we should point out this kind of elevation of the next-generation to leadership in a family company is quite common in China. In such cases, a more experienced person usually provides important guidance while the young leader is still learning, and that appears to be the case here. In addition to his chairman’s title, Wang Guanjun, now 26, is also co-CEO, alongside co-CEO Zhou Guangling, 41, who has a financial background and previously served as assistant to the president at Hong Kong-listed Lingbao Gold, another company in the family’s business empire.

Londian Wason looks attractive from a strategic standpoint, since the copper foil it makes is a key component in not only EV batteries, but also batteries used in the booming industry for energy storage systems. What’s more, Londian Wason also gets a smaller but still significant part of its revenue from copper foil used in printed circuit boards (PCBs) that have become a hot area recently due to their use in AI computing products like servers.

The reality is a little more nuanced, however. Londian Wason gets most of its business from a small number of major customers that place big orders, but also have power to demand low prices. The company’s business is also very capital intensive, requiring huge investment to make its copper foil. Lastly, there’s a huge element of cyclicity to the battery industry, which is only now beginning to emerge from a major downturn caused by a rapid buildup of new capacity that led to big oversupply.

The lump sum of all those factors is that Londian Wason got off to a weak start in 2025, before things picked up during the year as both prices and demand improved. The company’s revenue rose by 24% in 2025 to 10.9 billion yuan, and then the figure more than doubled in the first quarter of 2026 to 4.07 billion yuan from 1.91 billion yuan in the year-ago period.

As things improved, its gross margin rose to 10.4% in the first quarter of 2026 from just 3.0% a year earlier. And on its bottom line, the company returned to the black with a 134 million yuan profit in the first quarter of this year, reversing a 68.4 million yuan loss a year earlier.

In addition to industry cyclicity, the company is also weighed down by heavy debt as it constantly spends to maintain its facilities. It had a massive 5.54 billion yuan in short-term debt at the end of last year, and another 4 billion yuan in long-term borrowings. Its heavy spending made the company cash-flow negative on an operating basis in both 2024 and 2025, which is draining its cash reserves. The company even detailed how it recently “suffered from net working capital deficiency that (raised) substantial doubt about our ability to continue as a going concern,” and only recovered after obtaining financial report from a major shareholder.

The bottom line is that this is a well-connected company that is also quite well placed as a leading supplier to the EV and energy storage sectors. But industry cyclicity and price pressure from its customers means it may barely manage to scrape out profits in the best of times, and could come under great strain during industry downcycles.

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The provider of commercial vehicle parts and services has filed to list in Hong Kong, boasting average annual profit growth approaching 800% over the past three years

Key Takeaways:

• New SORL Auto Parts has filed for a Hong Kong IPO, reporting rapid profit growth that is largely the result of reduced sales expenses
• The commercial vehicle parts and services provider faces fierce competition in a highly fragmented market where leading companies command less than 1% share

By Cheng Shui Tong

Hong Kong’s benchmark Hang Seng Index has been on a losing streak lately, even as IPOs continue to boom. Commercial vehicle parts and services provider Zhejiang New SORL Auto Parts Co. Ltd. is driving head-on into that bifurcated mix, submitting its IPO application late last month. As the leader of its industry, the company looks quite strong in terms of overall financial performance over the last three years.

Soaring profits

New SORL's net profit has soared over that period, jumping from just 870,000 yuan ($130,000) in 2023 to 42.51 million yuan in 2024, rising further still to 70.18 million yuan last year, representing eye-popping average annual growth of nearly 800%, albeit from a low base. The company's balance sheet improved in tandem, with total current liabilities falling steadily from 796 million yuan at the end of 2023 to 520 million yuan by April this year. Over the same period, its net current assets rose from 637 million yuan to 952 million yuan.

New SORL operates in a market that’s growing steadily, if slowly. The global commercial vehicle services market where it does business reached 3.29 trillion yuan in revenue last year, and is expected to average 3% annual growth to reach 3.83 trillion yuan by 2030. China’s slice of that market was worth 758 billion yuan, and it is expected to grow by a slightly faster 3.7% annually to 908.5 billion yuan over that time, according to third-party market data in the company’s preliminary prospectus filed on June 26.

As a commercial vehicle parts and services provider, New SORL is plugged into a network of over 3,800 upstream component manufacturers and more than 222,000 downstream end customers. It ranks first among commercial vehicle service providers in China, with 265 stores at the end of last year throughout most of China. The company also operates overseas, with a sales network covering 100 countries and regions. It services its store network with 241 warehouses across China.

As China’s largest company in its field, New SORL enjoys economies of scale. Its highly digitalized operational infrastructure and extensive supply chain network allow it to provide distribution, technical support and after-sales services more efficiently, enabling door-to-door delivery services in as fast as 30 minutes and no longer than 48 hours. The company is developing a massive 18,667-square-meter parts center in Shanghai as its global supply chain hub, which should increase its efficiency further still.

Auto parts capital

New SORL harkens from the city of Ruian in East China’s Zhejiang province, often called the country’s “capital of auto and motorcycle parts.” As early as the 1960s, local farmers were already using simple tools to set up workshops in their homes to make auto and motorcycle parts. The industry evolved from there with the introduction of modern manufacturing equipment that enabled mass production, laying the groundwork for the city we see today with over 4,000 auto parts enterprises.

New SORL grew up in that environment. Founder Zhang Xiaoping, now 63, graduated from Zhejiang Radio and Television University, now Zhejiang Open University, in 1986, and has over 40 years of experience in the auto parts industry. He joined New SORL’s predecessor, Ruian Hongqi Auto Parts Factory, as factory manager in 1988. The current company was established in 2016, and completed its national network coverage and launched an overseas business five years later.

New SORL is banking on its high profit growth and industry-leading status to draw investors to its listing. Yet its roadmap, while broadly positive, is also pockmarked with some less obvious concerns about its future.

Leading that list is the source of its skyrocketing profits, which isn’t from an explosive surge in revenue and instead relies on falling expenses. Most notably, the company’s selling and distribution expenses decreased from 300 million yuan in 2023 to 266 million yuan in 2024, and further dropped by 26% to 196 million yuan in 2025. In that process, selling and distribution expenses fell from 11.2% of revenue in 2023 to 7.8% last year, as the company streamlined and improved its sales division.

But such efficiency gains can only go so far without substantial growth in its core business to maintain its profit momentum.

Such growth is absent from New SORL's top line, which has stalled in the last two years. Its revenue rose by just 1.5% in 2024, before slipping into reverse with a 7.8% decline last year, largely the result of weakness in overseas markets. As that happened, the company’s gross profit margin also slipped, falling from 16.5% in 2023 to 16% the next year, and easing further to 15.8% in 2025.

The company ranks first nationwide in both commercial vehicle service revenue and store count. But even so, its share of the 700 billion yuan market, based on its latest revenue, is still minuscule, at just 0.2%. The top five companies collectively control less than 1% of the market as well, reflecting an extremely fragmented situation with fierce competition that’s likely to further pressure New SORL’s margins.

Sluggish auto sector

This type of fractured landscape with thousands of small companies means that relatively few have attained the mass to go public. Some auto-related listed peers include Zhongsheng (0881.HK) and Harmony Auto (3836.HK), but both are primarily engaged in auto trading, with after-sales services as an auxiliary business. Shares of both companies also currently trade relatively low compared with past levels.

That’s not surprising, since China’s auto sector has slowed considerably in recent years after notching breakneck growth in the 2010s, affected by factors such as weak consumption and overcapacity. That’s put pressure on most auto-related stocks, many of those down 20% to 30% or more over the past month, as new car sales plunged around 20% in the first five months of the year.

New SORL's listing as an automotive services provider is relatively new for Hong Kong, whose stocks from that sector are mostly actual automakers. On the plus side, the current sluggish market may make car owners delay replacing their vehicles, boosting demand for maintenance services and spare parts replacement that are New SORL’s focus. But the broader picture of a weak auto market, combined with investor focus on AI and other tech stocks, could translate to relatively weak demand for the company’s stock.

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The company has filed for a Hong Kong IPO, cultivating a second growth curve in high-margin areas like scalp care, as its core maternal and infant products business stagnates

Key Takeaways:

• Kidswant has filed to list in Hong Kong, reporting its revenue rose above 10 billion yuan last year, even as growth for its core maternal and infant business slows
• The company is looking for new growth engines in high-margin businesses such as scalp care and marketing services

By Lee Shih Ta

China’s fertility rate continues to sink as a growing number of people opt out of parenthood. And yet the market for maternal and infant products will always be lucrative for companies that provide items desired by remaining parents, who are often willing to spend lavishly on their children. That predicament presents a core contradiction tugging at Kidswant Children Products Co. Ltd. (301078.SZ).

Last week, the maternal and infant retailing leader renewed its application for a Hong Kong IPO, which would complement its existing listing in Shenzhen. This time around, Kidswant is aiming to lure investors with new financials showing it broke through the 10 billion yuan ($1.47 billion) revenue mark last year. But investors may be unimpressed, worried about the stagnating Chinese market for the company’s core maternal and infant products.

The company’s business includes sales of products like milk powder, diapers and children's clothing, alongside services related to areas like child development and parenting. Despite China’s falling fertility rate, the company has managed to keep its revenue growing. The figure reached 10.27 billion yuan last year, up about 10% from 2024. Its net profit last year jumped by an even bigger 64.2% to 298 million yuan. The revenue growth slowed to 2.46% in the first quarter of this year, hitting 2.46 billion yuan, though its profit continued expanding at a healthier clip, rising 56.79% year-on-year to 48.62 million yuan.

Kidswant ranked first in China's maternal, infant and child products and services market last year, generating 13.7 billion yuan in gross merchandise value (GMV). But the market remains extremely fragmented, reflected by the company’s miniscule share of just 0.3%, in a market where the top five players combined controlled just 1%. That’s a good thing for leaders like Kidswant, showing they could grow through consolidation in a market where overall growth remains weak. The Chinese market for maternal, infant, and child products and services averaged 3.3% annual growth from 2020 to 2025, and is expected to grow 4% annually from 2026 to 2029, according to market data in Kidswant’s listing document. Consolidation may offer one way to outperform those low growth rates, as well as finding more consumption scenarios from within the market catering to new parents and their infant children.

As a result, Kidswant has positioned itself as a parent-child family services provider. By the end of 2025, the company had amassed over 98 million registered members and more than 12 million active members, while its offline sales and service network reached a total of 3,821 stores, effectively covering nearly all of China.

The company's strategy is to extend one-off transactions into sustained family consumption over time. In 2025, total revenue from sources other than the sales of maternal and infant merchandise accounted for approximately 15.6% of the company’s total. While that remains relatively small, it nonetheless forms the nucleus of a transformation Kidswant is trying to make.

Family care scenarios

As part of that transformation, Kidswant acquired the Hairology Group a year ago, extending its business to broader adult family consumption. Hairology provides scalp and hair care products and related services. Following the purchase, Hairology contributed 379 million yuan in revenue last year, accounting for 3.7% of the total. While small in terms of revenue contribution, the segment was a bigger contributor to Kidswant’s bottom line, thanks to its gross margin of 67.2% – more than triple the 21.2% gross margin for the maternal, infant and child business.

The scalp care market also has more potential than maternal and infant products. Data cited in the listing application shows China's scalp and hair care market was worth 67.5 billion yuan in 2025, and is expected to grow 11% annually to reach 102.7 billion yuan by 2029. In short, the Hairology acquisition enables Kidswant to pivot from the low-margin and slow-growth maternal and infant retail business into the higher-margin and faster-growing domain of family healthcare scenarios.

The reality is that the company’s core maternal and infant business has been facing pressure for a while now. Revenue from that segment rose 5.88% last year, lagging the company's overall growth rate. Meanwhile, the segment's gross margin declined from 23.1% in 2024 to 21.2% last year, with the gross margin for the sale of maternal, infant, and child merchandise similarly dropping from 21.1% to 19.4%.

But such transformations also come at a cost. From 2023 to 2025, Kidswant's net cash flow generated from operating activities grew from 804 million yuan to 1.44 billion yuan, proving that its core business still possesses strong self-sustaining cash-generation capabilities. But over that time, cash outflow tied to investing activities grew substantially from 1.2 billion yuan to 1.84 billion yuan, causing the company’s cash to plunge by more than half from 2.29 billion yuan to 1.01 billion yuan. The company's debt-to-asset ratio similarly climbed from 56.8% at the end of 2024 to 62.7% last year.

At the same time, the company’s acquisitions of Hairology and another company, Fortune Biotechnology, caused its goodwill to balloon from 782 million yuan at the end of 2024 to 1.93 billion yuan at the end of 2025, raising the prospect of future asset impairment charges.

Kidswant's decision to pursue a Hong Kong listing looks aimed at supporting its ongoing transformation. The application indicates that funds raised will be used for product innovation, sales and service network expansion, strategic acquisitions and the enhancement of digitalization capabilities, among other things.

Valuation could be one of the company’s biggest challenges. Hong Kong-listed Goodbaby International (1086.HK) recorded revenue of HK$8.66 billion ($1.1 billion) last year, lower than Kidswant's 10.27 billion yuan. Goodbaby's current market capitalization sits at just HK$1.37 billion, giving it a relatively low price-to-earnings (P/E) ratio of about 6 times. That could pose problems for Kidswant if it hopes its Hong Kong listing can match the market capitalization of more than 8 billion yuan and P/E ratio of 28 for its Shenzhen-listed shares.

This big gap implies that even if Kidswant manages to list in Hong Kong, it’s unlikely to achieve a valuation on par with its Shenzhen-traded shares by solely relying on its core maternal and infant business. Ultimately, its ability to attain higher multiples than rivals like Goodbaby may depend on whether its new businesses, like scalp care, can meaningfully lift its overall gross margins and add some new life to its growth trajectory.

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The AI company, whose shareholders include Xiaomi, plans to list in Hong Kong, delivering a story of strong revenue growth but eroding profitability

Key Takeaways:

• DataStory has applied to list in Hong Kong, reporting its revenue surged nearly 54% in the first quarter as its net loss widened
• The company, which helps businesses grow using enterprise-level large model applications, reported its gross margins continued to decline in the latest quarter

By Bai Xin Rui

The AI sector’s transition from an early phase of technological R&D to a more practical era of commercial application is boosting a new generation of companies, many now selling their AI 2.0 stories to investors. One of those, DataStory Artificial Intelligence Technology Co. Ltd., threw its hat into the IPO ring late last month, pitching itself as a leading provider of AI-native applications. Its planned Hong Kong listing is being underwritten by China Securities International, the international unit of domestic financial giant Citic, indicating it could be mid-sized, perhaps raising up to $100 million.

Founded in 2015 by Xu Yabo, DataStory helps businesses improve their efficiency using enterprise-level large model applications and solutions. Xu is part of a new generation of Chinese with strong AI backgrounds, previously working at Sun Yat-sen University and boasting over 16 years of experience in AI-related research, according to the company’s listing document. His expertise lies in leveraging big data and AI technologies to help companies build comprehensive digital business applications. 

Xu controls his company with about 34.27% of its voting rights, while other shareholders include smartphone giant Xiaomi, with a 6.33% stake.

From a top-level perspective, DataStory falls into an area on the cusp of what many believe is set for a major boom as people look for practical uses for AI. In the past, large model applications were largely confined to simple Q&A or content generation, still requiring significant human participation to make sound decisions and execute on them. But now the core of this technology is undergoing a fundamental evolution, driven by multimodal perception and multi-agent collaboration. That’s giving rise to a new generation of applications that can autonomously execute complex tasks, supplanting the historical reliance on heavy human involvement.

DataStory’s vision addresses business intelligence, which was traditionally limited to retrospective analysis and lacked ability to automatically execute more forward-looking strategies such as decision-making and deployment. Leveraging its proprietary EnlightAI multi-agent and other systems, DataStory is capable of autonomous planning, multi-process coordination and dynamic optimization. Such systems assume direct responsibility for final business outcomes, significantly curtailing the need for human intervention and thereby elevating commercial monetization capabilities.

DataStory says it is well-positioned to capitalize on an enterprise large model-driven business growth market in China that was already worth 8.6 billion yuan ($1.27 billion) in 2025, according to third-party market data in its preliminary prospectus. As enterprises across China improve and perfect their data authorization mechanisms, data acquisition and application are becoming much more seamless. As that happens, the market is projected to skyrocket to 150.1 billion yuan by 2030, representing breakneck annual growth of 77.2%.

Third-ranked

Given the market’s newness and high barriers to entry, it’s not surprising that the enterprise large model-driven business growth market in China is still relatively concentrated. The top five players collectively accounted for 37.8% of the market last year, according to the listing document, with DataStory ranking third at 5.8%. 

The company currently offers two primary service categories spanning key commercial scenarios throughout the full life cycle of business growth. Its enterprise growth AI solutions is the big breadwinner, contributing 70.6% of revenue in the first quarter of 2026. The segment targets the individualized and complex growth needs of large multinational corporations and top brands by providing them with end-to-end AI solutions.

Enterprise growth AI applications are DataStory's other major business, accounting for 25.8% of revenue. Primarily delivered as standardized software-as-a-service (SaaS) or subscription-based applications, this segment equips businesses with out-of-the-box intelligent tools.

DataStory recorded revenue of 79.6 million yuan in the first quarter of this year, up 53.8% from the same period of 2025. It credited the strong growth to rising revenue from enterprise growth AI solutions. Most notably, the number of key accounts jumped by nine year-over-year to 20, as average revenue per key client rose to 2.3 million yuan — a 53.3% jump from the 1.5 million yuan in the first quarter of 2025.

Surging losses

Despite the strong revenue growth, DataStory’s bottom line remained squarely in the red in this year’s first quarter. Its loss ballooned to 144 million yuan for the three-month period, up around five times from a year earlier. Not surprisingly, a major factor behind the jump was swelling R&D expenses, which roughly doubled year-on-year to 40.18 million yuan in the latest period, jumping to 50.5% of revenue from 37.8% a year earlier. DataStory blamed the increase primarily on mounting direct input costs.

On another front, DataStory's eroding gross margins also warrant close scrutiny. Its gross margin fell from 57.2% in 2023 to 52.2% in 2024, and tumbled further still to 42.1% in 2025, slipping again to 39.9% in the first quarter of 2026. Management blamed the erosion on expanding contributions from lower-margin solutions to its revenue mix. If the company completes its IPO, investors will inevitably be watching closely to see if this important metric shows signs of stabilizing and returning to a more positive trajectory.

Overall, U.S. giant Palantir (PLTR.US) arguably boasts the most robust operating model among AI software companies today. Reflecting that, Palantir has maintained a far higher gross margin of more than 80% for five consecutive quarters through the first quarter of 2026, leading investors to reward it with an eye-catching price-to-sales (P/S) ratio of 78 times. While riding the same explosive market wave, DataStory’s shrinking gross margins are far less compelling, underscoring a yawning operational chasm with top-tier players like Palantir.

While DataStory is coming to market as AI 2.0 takes off and investors welcome new stories, the growing number of such companies means buyers may become more selective. To replicate a Palantir-style story, the company will need to pivot from its current focus on growth at any cost toward a more refined approach that focuses on monetization and profitability. Only when its heavy R&D investments can build up a defensible position, and its gross margins stabilize and start to recover, will the company be able to deliver on its grand promise of both revenue growth and sustainable profits.

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Shares of the owner of an operating system used by more than half of China’s used car dealers lost nearly half their value in their first trading day on the Nasdaq

Key Takeaways:

• DSC raised about $50 million in its Nasdaq IPO this week, making it one of the largest new listings by a Chinese company on Wall Street in more than a year
• The company’s stock fell 47% on its first trading day, as investors balked at its aggressive pricing and stalling growth in China’s sputtering car market

By Doug Young

Just when the U.S. market for Chinese IPOs looked dead, along comes a relatively large listing with quite the A-list of players. We’re talking about DSC Holdings Ltd. (DSC.US), owner of China’s leading operating system (OS) for used car dealers, which made its Nasdaq trading debut on Thursday, just a month after making its first public filing for the IPO.

DSC raised a tidy $50 million in the listing, which isn’t huge compared with the many mega-listings we’ve seen in Hong Kong lately. Still, it’s the largest we’ve seen by a Chinese company on Wall Street for more than a year. But reflecting the many issues dogging such listings, DSC’s stock lost nearly half of its value on its first trading day, closing at $9.06 after selling 3 million American depositary shares (ADS) for $17 each.

This kind of early sell-off has become all too common for new Chinese listings on Wall Street, leading many – including Washington politicians and the securities regulator – to suspect behind-the-scenes manipulation. Both the U.S. Securities and Exchange Commission and the U.S. House Select Committee on the Strategic Competition Between the United States and the Chinese Communist Party have taken steps to tackle the problem, which has sharply reduced the number of new listing applications, especially by smaller companies.

Truth be told, DSC’s new listing doesn’t appear to fall into the category of stock manipulation, despite its big first-day decline, due to its A-list of actors with quite respectable backgrounds. The deal was underwritten by leading Chinese investment bank CICC and Deutsche Bank, also a very respectable Western brand. By comparison, most of the other Chinese listings we’ve seen lately have been underwritten by small boutique brokerages.

DSC is also backed by some very respectable investors, led by Ant Group, owner of the Alipay payments service and the financial affiliate of e-commerce giant Alibaba. Ant Group owned 8.8% of DSC’s stock after the listing, and had indicated it was willing to buy about $30 million worth of IPO shares, or about 60% of the offering. DSC’s other major pre-IPO investors included Primavera, 5Y Capital and Cygnus Equity, all also respectable names.

Finally, there’s the company’s founder, Yao Junhong, who has strong credentials in the auto market from his former role as co-founder and COO of Car Inc., one of China’s leading car rental agencies, before he set up his company in 2012.

Unlike many of the other recent Chinese applicants for Wall Street IPOs, DSC is also quite large and has access to large amounts of data that necessitated a data security review by China’s cybersecurity regulator. In its most recent prospectus, DSC specified that it underwent and passed such a review, and the company also received required clearance for the listing from the China Securities Regulatory Commission (CSRC) in late April.

So, why exactly did DSC’s stock tank in its trading debut, and does its listing mean the U.S. market for major Chinese IPOs may still have some life left?

Tough car market

We’ll tackle the tanking stock issue first, which appears related to an aggressive valuation for the stock, and also to weak prospects for the company’s core business in China’s sputtering car market. The company is still losing money, which is never that encouraging for a 14-year-old enterprise that says its core DaFengChe operating system is “embedded in the daily operations” of more than half of China’s used car dealers.

Even after the big first-day drop, the stock still trades at a price-to-sales (P/S) ratio of 4.5, based on its 2025 sales. That’s nearly double the 2.5 for Autohome (ATHM.US; 2518.HK), which is seven years older than DSC and is profitable, and also derives most of its money from transaction-based fees related to new and used car trading.

Then there’s the issue of DSC’s financials, which don’t exactly inspire confidence. That’s not really the company’s fault, and more the result of its reliance on a Chinese car market that has suddenly slammed on the brakes after zooming for most of the first two decades of the 21^st century. As the market has skidded, including double-digit declines for new car sales this year, many of the new and used car dealers that are DSC’s biggest customers have begun losing money and are sharply reining in their spending.

The company’s revenue rose slightly in the first quarter of this year to 146.6 million yuan ($21.6 million) from 142.7 million yuan a year earlier, which isn’t bad considering the sorry state of the market. But it’s hardly the kind of high growth that gets investors excited. The company offers its DaFengChe OS to used auto dealers for free, and makes most of its money by charging fees for marketing services, as well as referral services for things like car inspections and certification.

While its revenue rose slightly, the company’s number of monetized dealers and brokers, as well as its active users, both fell year-on-year in the first quarter. Its average revenue per user (ARPU) rose to 3,399 yuan in this year’s first quarter from 2,872 yuan a year earlier. But the low amount of both figures shows car dealers and brokers are hardly spending heavily on DSC’s services.

As the industry suffers, DSC’s gross margin dropped to 36.8% in the first quarter from 40.5% a year earlier. On the bottom line, its 29.2 million yuan loss in the latest quarter narrowed from a 39.6 million yuan loss a year earlier. But as we’ve already noted, a 14-year-old company with such strong credentials really shouldn’t be losing money at this stage.

That brings us back to the second question we raised earlier, namely, whether DSC’s listing could auger a revival of major Chinese listings on Wall Street. In our view, the answer is a definite “maybe.” This listing shows that Beijing is still willing to green-light major new listings by Chinese companies on Wall Street, especially from more mature sectors like cars.

But the bigger obstacle could be China’s economy, which underpinned strong U.S. investor appetite for China stocks when things were booming. But with that same economy now running low on fuel, U.S. investors will be far more selective on any new “made in China” stocks – especially ones priced as aggressively as DSC’s.

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The Chongqing-based maker of compound seasonings for restaurants hopes to follow in the footsteps of rival Haitian’s $1.28 billion listing last year

Key Takeaways:

• Juhui has filed for a Hong Kong IPO, betting on the $840 billion domestic catering market for growth despite margin pressure from competition
• The company makes customized seasonings for restaurant chains, whose penetration rate in China is relatively low compared to mature markets like the U.S. and Japan

By Edith Terry

In July 1999, two chemistry majors from China’s Southwest University, Gou Zhongjun and Wang Bin, started working part-time helping hot pot restaurant owners create their soup bases, which varied from chef to chef. Orders for their unique business blend quickly poured in, and they began serving as silent partner to popular local hot pot brands like Liuyishou, Chongqing Little Swan and Chengdu-based Shizilou.

The pair set up their own company, Juhui Corporate Management, in 2008, and went on to serve some of China’s fastest growing national restaurant chains, from hotpot specialists Haidilao and Xiabuxiabu, to others like the well-known LXJ chicken chain.

Now, Juhui Food Technology Co. Ltd. has become China’s fourth largest seasonings maker and is seeking to follow larger rival Haitian (3288.HK; 603288.SH) to the capital market with plans for a Hong Kong IPO. State-owned Haitian is the sector’s leader, raising a spicy HK$10 billion ($1.27 billion) in its Hong Kong listing a year ago.

Whether Gou and Wang can do the same will depend on whether the market likes their more niche business supplying compound food seasonings, which makes up about a quarter of the overall domestic seasonings market. Juhui is the largest company in that niche, although competitors like Yihai International (1579.HK) and Teway Food (603317.SH), which is also eyeing a Hong Kong listing, are close behind.

Juhui, which filed its preliminary prospectus last week, is hoping investors will value its track record of industry experience and the low penetration rate of chain restaurants in China, which are its main customers, relative to mature markets like the U.S. and Japan.

Its 2025 profit of 125 million yuan and a price to earnings (P/E) ratio of 21, comparable to Haitian, would value the company at about 2.6 billion yuan ($383 million), a tiny fraction of the roughly 200 billion yuan for the much larger Haitian, the nation’s leading soy sauce maker. Then again, Haitian is much older and more established, with more than a century of history, compared with just two decades for Juhui.

Strong growth potential

China’s compound seasoning market was worth 130.2 billion yuan last year, accounting for about a quarter of an overall national seasonings market worth 511.3 billion yuan, according to third-party market research in its prospectus. While China’s overall seasonings market is expected to grow 6.2% annually through 2030, compound seasonings, which include more than a single ingredient, are expected to grow at a faster 9.8%.

The increasing demand for pre-mixed seasonings partly reflects demand from younger consumers who don’t necessarily feel a need to make everything from scratch. But Juhui sells strictly to other businesses, meaning its growth is driven by the rapid growth of catering enterprises that depend on its consistent quality and customization abilities.

Mid-range restaurant chains with between 500 and 1,000 outlets increased their store count by 32.6% annually last year, with chains operating 101 to 500 stores increasing by 28.3%, according to a 2026 report by the China Chain Store & Franchise Association (CCFA). Overall, chains boosted their share of China’s restaurant market from 21% in 2023 to 25% last year, according to the CCFA.

Chain restaurants accounted for just 22.9% of China’s total last year, well below 56.9% in the U.S. and 53.2% in Japan, which Juhui says offers significant growth potential for its business, which comes mostly from chain operators.

That kind of data certainly spices up Juhui’s IPO application more than the company’s actual revenue and profits, which were relatively flat between 2023 and 2025. Both revenue and profit actually dipped last year, the former down 2.6% to 1.11 billion yuan and the latter down 18% to 125 million yuan. But things picked up in the first three months of this year, with revenue up 21% year-over-year to 297 million yuan and profit up 71% to 29.7 million yuan.

The company’s gross profit margin also flatlined between 2023 and 2025, and then fell slightly to 30.2% in the first quarter from 30.3% a year earlier. Falling average selling prices for the customized compound seasonings that make up 95% of Juhui’s revenue are a factor that continues to pressure its margins. Prices for those customized offerings fell from 21.6 yuan per kilogram in 2023 to 19.9 yuan last year, and dipped further to 19.3 yuan per kilogram in the first quarter of this year. The company cited competition and its desire to gain market share as key factors behind the price declines.

Strong customer retention

While such numbers don’t look too impressive, Juhui says it’s equally important to look at its customer retention. Of the 130,000 restaurants it currently serves, the annual customer repurchase rate has risen sharply from 54.2% in 2023 to 72.1% last year.

Juhui’s makes its customized products at an 84,900-square-meter factory in its hometown of Chongqing, while standardized products are made at a 33,000-square-meter factory. Actual customization takes place at a network of 30 centers across China with 100 R&D specialists and professional chefs, which Jiuhui says is the largest such network in the industry. It says that network functions as “on-the-ground R&D consultancies for our customers, providing free menu development support, co-creation of new recipes, and troubleshooting of operational challenges on site.”

One place where Juhui really shines is on its balance sheet. Its net assets nearly doubled from 333.4 million yuan in 2023 to 627.3 million yuan in the first quarter of this year, largely the result of buying out preferred shares from earlier investors that included CPE Investment and Matrix Partners China. That helped the company shrink its debt from 553.4 million yuan in 2023 to 157.3 million yuan in the first quarter of 2026, and left Gou and Wang with ownership of 80% of their company.

While many of its largest customers are growing, one challenge for Juhui could be that some of the largest chains are focusing their growth outside China. By comparison, chain restaurants in the top category of 10,000 outlets and more have kept their domestic store count relatively stable, according to the CCFA report.

An example is Haidilao, which spun off its overseas operations into a separately listed company in 2022. That operation now has 127 outlets in 14 countries, mostly in Southeast Asia. While Juhui may be able to serve those customers for their overseas operations, such companies could also let their offshore divisions look for suppliers that can produce locally and have a better understanding of local tastes.

On the whole, Juhui’s story offers a mixed packet for investors. On the one hand it’s in a market segment with big growth potential. But it’s far from clear that it can grow in sync with that market, as it races to stay ahead of the domestic competition.

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The autonomous commercial vehicle technology maker plans to top up with a Hong Kong IPO under a rule allowing ‘specialist technology companies’ to list even if they are losing money

Key Takeaways:

• Trunk Technology has filed for a Hong Kong IPO, counting Bosch and Nio among its early backers
• The maker of technology for autonomous commercial vehicles’ revenue rose 35.6% last year, but it has remained in the red for the last three years

By Bai Xin Rui

Losing money used to be a major roadblock for companies looking to list in Hong Kong. But all that has changed in recent years as the stock exchange rolls out a growing list of exceptions to welcome early-stage enterprises with promising new technologies.

One of the latest exceptions, called Chapter 18C, has attracted a growing platoon of such “specialist technology companies” since its rollout in 2023. The latest in that procession is Trunk Technology (Beijing) Co. Ltd., a leading developer of Level 4 (L4) autonomous truck technology and related smart logistics solutions, which submitted its listing application under the Chapter 18C channel earlier this month.

Trunk Technology was established in March 2017, and is now China’s fourth-largest provider of autonomous driving solutions for commercial vehicles. Founder Zhang Tianlei possesses extensive experience in autonomous driving and AI, with a resume that includes earlier stints at Microsoft and Baidu between 2012 to 2015.

The company’s focus is L4 autonomous driving solutions for trucks, with L4 considered the first fully autonomous level on a six-tier autonomous driving scale ranging from L0, which is fully human controlled, to L5. Its backers include big names like German auto parts supplier Bosch, new energy vehicle maker Nio and BAIC Capital, a unit of Beijing Auto. Zhang is currently the largest shareholder with 49.12% of the company’s voting rights.

Trunk Technology’s crown jewel is its self-developed, integrated software and hardware system platform for L4 autonomous driving. The platform is targeted at three major commercial scenarios: logistics hubs, which it calls “trunk port”; road freight, called “trunk pilot”; and urban transportation, called “trunk city.” Among those, trunk port has established commercial partnerships with major urban logistics operators including Tianjin Port, Ningbo-Zhoushan Port and the Zhengzhou Inland Port.

Main breadwinner

Trunk Technology’s biggest revenue source is trunk pilot, its road freight division, which brought in 215 million yuan ($32 million) in revenue last year, accounting for 62.5% of its total. That business designs and sells autonomous driving solutions for highway logistics, involving express delivery, less-than-truckload (LTL) freight, bulk cargo and cold chain transport, among others. Trunk pilot has already completed large-scale commercial verification and demonstration operations in areas including the Beijing-Tianjin-Hebei region, the Yangtze River Delta, the Guangdong-Hong Kong-Macao Greater Bay Area and in China’s Southwest, Northeast and Northwest regions.

The company’s trunk port segment offers unmanned transportation solutions for logistics hubs, and it is the first unmanned transportation system deployed for commercial use at ports and other logistics hubs. It uses smart trucks and smart transport robots tailor-made for logistics hub scenarios, allowing it to operate round-the-clock in myriad weather conditions. Trunk port is Trunk Technology’s second-largest segment, generating 127 million yuan last year, accounting for 37% of the company’s total.

The trunk port segment’s revenue declined last year. But that was more than offset by a boom for the trunk pilot segment, whose average selling price surged 251% to 6.72 million yuan. As a result, Trunk Technology's overall revenue grew 35.6% last year to 345 million yuan.

That said, the company is still an early-stage technological innovator, meaning its R&D expenses are massive, equal to 26.3% of revenue last year. High costs associated with factors like regulatory compliance, system integration and customer customization have kept the company squarely in the red, including a loss of 171 million yuan last year.

Promising prospects

Prospects for China's logistics industry remain vast, which Trunk Technology hopes to capitalize on over the long haul. Last year the country’s social logistics volume exceeded 360 trillion yuan, and the country has retained its position as the world's largest logistics market for the last 10 years. Within that figure, road logistics accounts for over 70% of total freight volume. The industry has long faced structural challenges such as driver shortages, high operational costs, frequent road accidents and low transportation efficiency. Autonomous driving addresses many of those, ending labor shortages and reducing accidents caused by factors like driver fatigue.

The market for commercial vehicle autonomous driving solutions in China was worth just 8.5 billion yuan last year, according to third-party market data in the listing document. But the market is expected to grow rapidly as technology improves and becomes more widespread. The entire industry is expected to reach 246.9 billion yuan in 2030, with open-road scenarios accounting for 88% of that figure, according to forecasts in the prospectus.

At the same time, falling costs for the core hardware will also help Trunk Technology to lower its expenses as it drives towards a profitable future. In particular, prices are expected to fall for autonomous driving computing units (ADCU), whose main costs come from high-performance system-on-chips (SoC) and microcontroller units (MCU). Prices for ADCUs rose steadily from 2021 to 2024 due to a broader global semiconductor shortage. But conditions finally began to ease last year, and since then the average selling price for ADCU core chipsets is down 5.1% from the peak. As the technology further matures and production scales, costs are expected to continue falling, which should indirectly benefit Trunk Technology.

Autonomous driving peers such as Pony AI (PONY.US; 2026.HK) and WeRide (0800.HK, WRD.US), currently trade at high price-to-sales (P/S) ratios of 33.6 times and 21 times, respectively, reflecting high investor hopes for the pair despite their relatively low revenue.

A share sale by Trunk Technology at a P/S ratio higher than 30 times could be a stretch, with limited upside for the stock at that level. On the other hand, an IPO share pricing at below 20 times could be more attractive, implying better upside potential. Either way, the company is really just embarking on a long trip that will inevitably be filled with twists and turns, and its longer-term potential will only become clear as the industry matures.

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The budget smartphone maker has renewed its application for a Hong Kong IPO, reporting revenue for its core Africa market rose last year, as all of its other markets fell

Key Takeaways:

• Transsion has filed for a Hong Kong IPO, reporting its revenue rose 25% in the first quarter of 2026 after returning to growth in the second half of last year
• The budget smartphone maker controlled a massive 61.5% of Africa’s smartphone market by unit shipments in 2024, but just 22.5% of the market by revenue

By Doug Young

Investors may be flocking to AI and chip stocks these days, but that high-tech preference isn’t finding its way to the older and more mature smartphone sector. That could bode poorly for budget smartphone maker Shenzhen Transsion Holdings Co. Ltd. (688036.SH), as it renews its bid to list in Hong Kong, which would complement its existing listing in Shanghai.

Truth be told, the company’s most recent financials, contained in an updated Hong Kong IPO preliminary prospectus filed last week, don’t look too bad. Its revenue began to rebound in the second half of last year and continued to rise by a strong 25% in the first quarter of 2026, reversing a year of declines. That looks quite strong when you consider that revenue for Xiaomi (1810.HK), the company’s closest publicly traded rival, reported that revenue for its core smartphone business fell 12.5% in the first quarter.

Perhaps in recognition of its relatively strong recent performance, Transsion’s Shanghai-listed stock is “only” down 34% over the last 52 weeks, compared with Xiaomi’s larger 54% decline. But both of those large declines show that lower-end smartphone makers have fallen out of favor with investors.

On the whole, smartphones are increasingly seen as a rapidly maturing product category, without much room for major innovation. As the industry increasingly matures, we’re almost certain to see a new generation of manufacturers from lower-cost markets like India rise to challenge the Chinese brands that now dominate the lower end of the spectrum, including not only Transsion and Xiaomi, but also others like Vivo and Oppo.

On top of that broader macroeconomic factor, the entire industry is also being challenged these days by soaring memory prices, which are the single largest cost for most manufacturers. Transsion’s latest listing document shows that its costs for memory chips rose about 10% last year, following an even larger rise in 2024. In that process, memory rose to account for 28% of its raw material costs last year from 21% in 2023.

Higher-end smartphone makers like Apple (APPL.US) and Samsung (005930.KS) have been able to absorb those higher memory costs without raising their prices by sacrificing some of their margins, which are already quite high. But budget players like Transsion have much lower margins, and thus are having to raise their prices to avoid falling into the red, which is weighing on their sales.

Transsion is the brainchild of founder Zhu Zhaojiang, whose history in China’s mobile communications sector dates back to his work at Ningbo Bird, one of the country’s early leaders in cellphone space. Simpler feature phones, which are the precursor to today’s smartphones, still dominated the market back then, and Zhu used his experience to create products targeting the African market that was neglected by most major cellphone makers at the time.

The company quietly rose to dominate the lower end of Africa’s smartphone market with its Tecno, Infinix and Itel brands, and was the top seller on the continent in terms of unit sales in 2024 with a massive 61.5% of the market, according to its listing document. But reflecting its status as a budget brand, it only controlled 22.5% of the market in terms of revenue, making it the second-largest player that year.

Smartphone transition

To broaden its base, boost its margins and appeal to increasingly affluent consumers, Transsion has been slowly phasing out its feature phone business to focus on smartphones. It has also been trying to diversify geographically beyond Africa, though that campaign has been running into headwinds lately as it faces greater competition in those markets.

Smartphones accounted for about 84% of the company’s revenue in 2025, while feature phones made up just 5.5%. As it has moved up the value chain, and has also been forced to raise prices in response to rising memory costs, the average selling price (ASP) for its smartphones rose to 566 yuan ($83.62) last year from 544 yuan in 2024. But that latest price is still less than half the ASP of 1,310 yuan for Xiaomi’s smartphones in the first quarter of this year, showing that Transsion remains stuck in the smartphone cellar.

At the broadest level, Transsion’s overall revenue returned to growth in the second half of last year, after declining in the second half of 2024 and first half of 2025, based on calculations using its previously published data. Its revenue grew 7% in the second half of last year to 36.5 billion yuan from 34.1 billion yuan a year earlier. The growth rate then accelerated to 25% in the first quarter of this year, as the figure rose to 16.2 billion yuan during that period from 13 billion yuan a year earlier, according to its latest quarter results posted to the Shanghai Stock Exchange.

After declining steadily between 2023 and 2025, the company’s gross margin also rebounded to 22.0% in the first quarter from 19.3% a year earlier, showing its ship was steadying.

Geographically, however, Transsion’s “Out of Africa” story is rapidly running out of steam. Africa was the company’s only major market where revenue rose last year, climbing nearly 10% to make up about 38% of its sales. By comparison, revenue from Emerging Asia Pacific markets, its second largest region, fell 3.6% to make up 36% of sales, while the Middle East and Latin America fell 7.1% and 24%, respectively.

In addition to the challenges from competitors, Transsion also faces a series of patent infringement lawsuits in Europe and Southeast Asia filed by telecoms giant Ericsson and InterDigital in 2025 and 2026. China’s securities regulator reportedly requested additional information about that litigation in April, potentially creating another hurdle to getting the necessary approval from the China Securities Regulatory Commission for the Hong Kong IPO.

On the bottom line, Transsion is still profitable, though that metric has been a bit erratic over the last year. Its profit fell 53% to 2.61 billion yuan last year from 5.6 billion yuan in 2024, though that appears mostly related to big drops in “other income” and “other gains” unrelated to its smartphone business. Its profit rose 43% in the first quarter of this year to 700 million yuan from 490 million yuan a year earlier.

If the company succeeds with its latest Hong Kong IPO attempt, appetite for the stock could be weak due to competition from other emerging technology companies. That said, its recent rebound could attract some investor attention, and it could also draw some bargain hunters if it prices the stock significantly below its Shanghai shares, which currently trade at a price-to-earnings (P/E) ratio of 22 and price-to-sales (P/S) ratio of 0.9.

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China’s fifth-largest marketing services provider for cross-border e-commerce customers is shifting to social media platforms and its own direct sales for growth

Key Takeaways:

• Miduoduo has chalked up three years of losses ahead of its application for a Hong Kong IPO, but attributes that to costs associated with its recent business shifts
• The provider of cross-border e-commerce marketing services says its strong revenue growth last year reflects a tie-up with TikTok and focus on Southeast Asia

By Edith Terry

It’s a familiar story when startups head for the capital markets with a track record of losses. Cross-border e-commerce company Miduoduo Group Inc. was one of the latest cases in point when it applied for a Hong Kong listing last week.

The company reported losses of $16.4 million in 2023, $163,000 in 2024 and $24.5 million last year, on revenue of $70.9 million, $71.1 million and $138.1 million, respectively. Prior to rule changes introduced in 2018, the Hong Kong Stock Exchange probably would have simply dismissed Miduoduo’s application due to its earlier requirements for two years of profitability before an IPO.

Adjusted for certain non-cash items, the company’s bottom line looks better – with a net profit of $59,000 in 2023, followed by a loss of $87,000 in 2024 and a $2.3 million profit last year.

Despite that bumpy profit record, more is going on with Miduoduo that merits a closer look beyond its bottom line. For one, the company’s latest backers include sovereign wealth fund Central Huijin Investment, whose fresh funding last year valued Miduoduo at HK$5 billion ($638 million).

The company is trying to position itself more like a hot high-tech startup rather than a 14-year-old player in the mature ad services industry, counting on its most recent embrace of the exploding market for outbound e-commerce selling goods from Chinese merchants to buyers in other countries.

It wants investors to see it not only as a marketing services provider, but also as an operator of its own direct cross-border e-commerce platform with a focus on Southeast Asia. It says it will use IPO proceeds to bankroll localization and e-commerce warehouses in four key Southeast Asian markets – Thailand, Indonesia, Vietnam and Malaysia. Its recent partnership with the popular TikTok short video site, which operates the TikTok Shop e-commerce platform, is also an important part of its story. It credits that growing TikTok relationship for its recent growth, which saw its revenue nearly double last year after a mostly flat performance in 2024.

Corporate evolution

Minduoduo’s rapid evolution from domestically focused ad services provider to an integrated provider of cross-border online selling services in some ways spotlights a rapidly emerging new corner of China’s giant e-commerce industry.

With 15.52 trillion yuan ($2.3 trillion) in online retail sales in 2024, China represents roughly half of the global online retail market. Its cross-border e-commerce industry generated $461.7 billion in revenue in 2024, and is expected to grow 15.1% annually through 2029, according to the listing document. That’s providing fertile ground for growth of the cross-border e-commerce services segment, which is projected to more than double from $36.3 billion in 2024 to $73.7 billion in 2029.

Five companies currently represent 36.5% of the total market for outbound e-commerce marketing services. Miduoduo is the smallest in that group, ranking fifth in 2024, with a tiny 0.5% market share. Guangdong Advertising Group (002400.SZ) is the leader, with 17.2% of the market, while unlisted Tec-do, Donson and Singoo Cloud are next, collectively representing 18.8%.

The group has faced pressure lately in the U.S., a major market for Chinese e-commerce sellers, following the closing of a loophole last year that previously let packages valued at under $800 enter the country tariff-free. A similar movement is occurring in Europe, as the EU prepares to abolish its own tariff waiver for parcels worth less than 150 euros ($173) starting next month.

Miduoduo’s response to those and other pressures is a textbook study in resilience and opportunism.

The company started out as Huiyuan Information, a cross-border trade intermediary based in South China’s Fujian province, initially working with Google to increase the U.S. company’s advertising business from Chinese customers. In 2021, the company’s co-founders, Chairman Ruan Weixing and CEO Deng Hai, began a pivot from providing inbound marketing services to offering outbound services for Chinese advertising agencies.

Direct e-commerce services

After 2023, the company also began doing business with individual brand customers in addition to its older business working with agencies. After May 2025, it began its own overseas e-commerce operations working with TikTok Shop.

Miduoduo’s core business has been overseas marketing services since 2021, and that business still accounted for 93.1% of its revenues last year. Its own direct overseas e-commerce operations made up just 3.1% of revenues in the first year of that business. The key to Minduoduo’s latest expansion beyond its core marketing services is its relationship with TikTok, which began in 2024. The relationship has since matured into a platform for the company’s own direct e-commerce business as well as e-commerce advertising services.

As that relationship matured, TikTok’s share of Miduoduo’s revenues went from 0.2% in 2023 to 30.3% in 2025, with most of the rest coming from Google. Under its marketing services business model, Miduoduo buys ad space on platforms like Google and TikTok, and sells that to agency customers, and makes some of its money via rebates from the platforms. But Google’s rebates went from $1.49 million in 2023 to just $838,000 in 2025, after the U.S. search giant reduced its rebate policy in 2023. By comparison, rebates from TikTok totaled $4.38 million in the first full year of that relationship.

Miduoduo gives full credit to TikTok for helping to increase its gross profit from $2.9 million in 2023 to $11.8 million in 2025, although its relationship with Google continues. Revenue from services provided through TikTok increased from $9.7 million in 2024 to $38.9 million in 2025, with the number of active customers rising from 706 to 1,209. The company’s gross margin is quite low, reflecting its status as a middleman provider of marketing services. But the figure has been improving with the growing TikTok relationship and rise of its higher-margin direct e-commerce business, climbing from 4.1% in 2023 to 8.6% last year.

In addition to the ad services relationship with TikTok, the company’s own TikTok Shop-based direct e-commerce business contributed revenue of $4.2 million last year, with a much higher gross margin of 72.1%. That business sold products to consumers in the U.S., Malaysia, Thailand and Vietnam last year, apparently confined to a single brand partner. But the company says three additional brand partners signed up for the service in the first four months of 2026, showing that business could have strong future potential.

It’s probably too early to say whether Miduoduo’s new relationship with TikTok will be able to keep delivering such strong growth and margin improvement over the longer haul. But its embrace of an outbound e-commerce model, combined with its Southeast Asian focus, look like smart moves amid growing Chinese tensions with the West and growing stinginess at Google, which is facing its own challenges as AI eats away at its core search business.

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China’s biggest platform for licensed images has filed for a Hong Kong listing as it tries to reposition itself as a provider of AI-enabled design services

Key Takeaways:

• The company’s core revenue from content licensing fell 14% last year, slipping below 70% of overall turnover
• Visual China hit the headlines in 2019 when it tried to charge for a landmark scientific image that had been issued as free for general use

By Lee Shih Ta

Generative AI is disrupting creative industries across the board, and the business of sourcing visual content is no exception.

Whether for news coverage, corporate marketing or advertising campaigns, businesses have traditionally obtained images through platforms such as Getty Images (GETY.US) and Shutterstock (SSTK.US). But the rapid adoption of AI-powered tools has meant that many users are opting to create their own images, without the help of a go-between.

Still, the stalwarts of the licensed image industry believe their extensive content libraries remain a store of value, as they reposition themselves as integrated platforms offering content assets and AI capabilities. This strategy lies at the heart of an IPO pitch by China’s biggest provider of stock images, Visual China Group Co. Ltd. (000681.SZ), which wants to raise money to invest in its AI services.

The founder of Visual China, Chai Jijun, started out as a photojournalist at China Youth Daily before getting into the business of content licensing.

In 2016, the company acquired the image licensing division of Corbis, the photo agency founded by Bill Gates, gaining access to an international portfolio of copyrighted content. It later added the photographer community 500px and obtained a controlling stake in Chengdu Guangchang Creative Technology, building a content ecosystem spanning images, videos, audio and 3D models.

By the end of 2025, the company managed more than 700 million content assets, working with over 800,000 contributors and maintaining partnerships with 300 copyright agencies. According to third-party research cited in the prospectus, it ranked first in China's market for visual content licensing by revenue last year, serving advertising agencies, tech giants, government agencies and small businesses.

But the company has faced controversy over its commercial practices and copyright enforcement. In 2019 a scandal erupted after Visual China listed an image of a black hole that had been issued free for general use by the scientific team behind the Event Horizon Telescope. The move sparked debate over whether a commercial platform should be able to profit from a publicly shared asset.

The company's long-standing copyright enforcement model also came under scrutiny, with media reports that some users were being turned into paying customers after receiving infringement notices. The company was accused of developing a business model in which enforcement drove licensing revenue. Visual China argued that it was safeguarding the rights of content creators, saying its core business was copyright protection and licensing. Internet regulators weighed in, interviewing company executives and temporarily shutting down the service for what was called a rectification process.

Fewer big customers

The controversy highlighted a heavy reliance on content licensing, which remains the company’s main revenue source. According to the listing application, annual revenue from content licensing services totaled 575 million yuan ($85 million) in 2023, rising to 610 million yuan a year later but falling 14% to 524 million yuan last year. The share of total revenue from content licensing fell from 75% to 67%, as tighter marketing budgets and AI use changed procurement patterns.

The number of clients regarded as key accounts fell 7.5% from 2023 to 2025, from 17,244 to 15,956. Earnings have also come under pressure, with gross margin slipping from 51.2% in 2023 to 41.7% in 2025, while net profit dropped from 154 million yuan to 92.67 million yuan.

With its business under pressure, Visual China has been searching for new growth drivers, such as customized content. Corporate clients can get a service package with

graphic design, video production and branded communications content. Revenue from the segment surged from 152 million yuan in 2023 to 209 million yuan in 2025, with the share of overall revenue rising from 19.4% to 26.9%. Rather than purchasing individual images, clients are increasingly buying integrated content solutions that include advertising design, short-form videos and AI-generated content.

The company has also begun expanding into AI training services, offering data collection, cleansing, annotation, rights verification and licensing. It has also invested in a developer of large language models, MiniMax (0100.HK). If AI models increasingly need to be trained on legally sourced and verifiable data, Visual China's extensive portfolio of copyrighted content could regain a strategic value.

Whether Visual China can win over Hong Kong investors remains uncertain. On the Shenzhen market, the company is valued at about 15 billion yuan and trades at roughly 50 times earnings. Yet its share price has risen just 11% over the past 52 weeks, suggesting investors remain cautious about its AI transformation.

Getty Images has also been moving aggressively into AI licensing and data training and is planning to merge with Shutterstock to form an international powerhouse in visual content. Visual China offers a vast library of Chinese content and deep expertise in local copyright matters. But it remains to be seen whether investors will value the company as a traditional provider of content licensing or as a supplier of AI data services.

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The behind-the-scenes provider of supply chain logistics services for manufacturers has an impressive revenue base, but it operates on paper-thin profit margins

Key Takeaways:

• Annto has filed for a Hong Kong IPO as parent Midea seeks to let its former logistics unit stand on its own
• The company operates on a gross margin of just 7%, as its heavy reliance on Midea for business leaves it with little pricing power

By Warren Yang

A massive revenue base can impress investors at first glance, making a company look like a corporate giant. But those big numbers mean little if only a tiny portion of that money trickles down to the company’s bottom line.

Annto Supply Chain Technology Co. Ltd. is a classic example of such a top-line mirage. As it seeks a Hong Kong listing, its biggest challenge will be spinning its paper-thin margins into an attractive investment case as a logistics middleman for manufacturers, led by its biggest client and parent Midea, one of the world’s top home appliance makers.

Annto’s prospectus, filed last week, features some big numbers that make the company look like a cash cow to the undiscerning eye. Its revenue grew at a solid annual growth rate of 15% over the last three years to reach an impressive 21.5 billion yuan ($2.96 billion) in 2025.

But peel back the wrapper, and the not-so-glamourous financial reality of Annto’s business model becomes starkly vivid. The company plays the grueling, low-margin role of a logistics-problem solver, mostly for Midea. In effect, most of its big numbers come from securing logistics facilities and services from third party suppliers, and then making them available to Midea and other clients for tiny markups.

Demand for supply chain logistics services is rising across China as domestic manufacturers look for ways to lower costs by outsourcing their warehousing and freight management needs to specialists like Annto.

By employing sophisticated delivery models and automated sorting robotics, Annto can cut a factory's inventory costs significantly. Unsurprisingly, home appliance supply chain management is Annto’s crown jewel due to its Midea ties. It offers an "integrated production logistics" model, managing everything from the raw steel and compressors going into air conditioners, to the final "last-mile" delivery of a heavy refrigerator to a consumer's doorstep. Annto is the largest integrated supply chain solution provider for the domestic home appliance industry, according to third-party research cited in its prospectus.

However, while demand for these advanced, data-driven coordination services is growing, actual profits for the company and other operators are heavily capped by their large overhead.

Razor-thin margins

Annto operates on a razor-thin gross profit margin of about 7% as it relies on an army of third-party drivers, manual laborers and warehouse leases. Other expenses further squeeze its net profit margin to a miserable 2%. That means the company made a net profit of just 449 million yuan last year, despite the mountain of money it brought in as revenue from Midea and other customers.

For investors following companies with similar business models, Annto's financial profile should sound familiar. For example, the gross profit margin for JD Logistics (2618.HK), a unit of e-commerce giant JD.com, is similarly thin.

Annto’s heavy reliance on Midea, which supplies more than two-thirds of its revenue, puts further pressure on its margins. Essentially, Annto’s primary job is doing behind-the-scenes work for its parent for tiny fees. When a single customer controls that much of a company’s business pipeline, its pricing power is tenuous at best, especially if that customer is also its controlling shareholder.

Midea’s biggest responsibility is to its own shareholders, who want to see the company boost its profitability. That means Midea can squeeze Annto on fees, giving the latter little choice but to absorb the blow. Worse yet, a shift in the Midea relationship, including an outright severing of ties or diversification to using other logistics vendors, could easily plunge Annto into a crisis. This could leave Annto’s independent minority shareholders, should its IPO succeed, constantly worrying about the company’s lopsided relationship that strongly favors Midea. Annto is up front about this risk.

“We have a high degree of customer concentration and rely significantly on our controlling shareholder,” Annto said in its prospectus. “If Midea Group terminates, reduces, or adversely alters the terms of its logistics and supply chain agreements with us, our business, financial condition, and results of operations would be materially and adversely affected.”

This isn't a theoretical risk. For a real life example, look no further than what happened to JD Logistics soon after its IPO. Its e-commerce parent, JD.com, adjusted its internal fulfillment pricing to weather market headwinds, and the logistics arm bore the brunt of that decision, posting massive net losses in 2021 and 2022. It only returned to profitability by pivoting to other third-party customers – something Annto will also be trying to do. But its shares are still down more than 70% from their peak in 2021.

JD Logistics shares trade at a trailing price-to-earnings (P/E) ratio of just 10.9 and an even weaker price-to-sales (P/S) multiple of just 0.3. At the same P/S ratio, Annto’s market capitalization would be about 6.5 billion yuan, or less than $1 billion. Using JD Logistics’ P/E ratio as a benchmark would drop Annto’s value to an even smaller 4.9 billion yuan, reiterating the company’s weak bottom line that could easily drop into the red if Midea’s demands become too burdensome.

Furthermore, the Chinese home appliance market is mature and deeply cyclical, tethered directly to a sluggish domestic real estate sector where new home sales have plunged for several years now.

These risks are forcing Annto to expand its customer base beyond home appliances to include makers of fast-moving consumer goods, auto parts and electronics. But entering those areas also means going toe-to-toe with fiercely competitive logistics heavyweights like JD Logistics and S.F. Holding (6936.HK; 002352.SZ). In any pure price war with these deep-pocketed and highly experienced rivals, Annto's already-poor margins would suffer even more.

Fresh capital from the Hong Kong IPO may help Annto become more competitive. It plans to use the proceeds to upgrade its digital supply chain platform, automate its warehousing network, and fund an aggressive expansion into third-party customer markets.

In trying to lure investors, Annto will probably pitch a narrative of digital supply chains, automated fulfillment centers and its ties to a global appliance giant. But unless it can wean its massive revenue machine from huge dependence on its parent, investors might want to let this new share delivery pass them by.

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The computing power provider has filed for a Hong Kong IPO, hoping to attract investors with its surging AI cloud business

Key Takeaways:

• PPLabs has filed to list in Hong Kong, reporting revenue from its AI cloud business surged by more than 10 times last year to 119 million yuan
• The computing power scheduling platform has yet to achieve profitability, and gross margin for its AI cloud business remains at a negative 10.7%

By Lee Shih Ta

The rapid rise of AI agents has made computing power infrastructure one of the hottest investment themes in capital markets lately. That tide is washing some names from China’s golden internet era back to center stage for encore performances.

One of those is none other than Yao Xin, founder of PPTV, which was once at the cutting edge of China’s online video revolution. Now, Yao has now returned for his encore with a Hong Kong IPO application for his similarly named PPLabs Technology Ltd. From his earliest days building a content delivery network two decades ago, to his latest foray integrating decentralized GPU resources to build an AI computing power network, Yao Xin has always focused on the infrastructure at the base of the internet world.

PPLabs does not train models, nor does it directly provide AI applications. Instead, it integrates decentralized computing power resources across the globe to provide edge cloud and AI cloud services to enterprises and developers. The company's computing power network covered over 1,340 cities and counties globally at the end of last year, with more than 4,600 compute nodes.

The platform had over 574,000 registered developers at the end of April this year. According to third-party market data in its preliminary prospectus, the company is the largest independent edge cloud computing service provider in China, and is also the country’s largest independent AI cloud computing service provider.

Yao Xin founded his original PPTV online video platform in 2005, placing him in the generation of China's earliest internet entrepreneurs. After leaving PPTV, he became a partner at Lanchi Ventures before founding PPLabs in 2018. If PPTV’s mission was tackling problems surrounding video transmission in the early internet era, then PPLabs is now tackling a new problem set involving computing power scheduling in the new AI era.

According to its listing application, the company's revenue rose from 358 million yuan ($53 million) in 2023 to 770 million yuan last year, averaging 46.6% annual growth over that time. The most eye-catching piece of its pie is AI cloud computing services, whose revenue surged from just 265,000 yuan in 2023 to 10.39 million yuan in 2024, and rose more than 10-fold to 119 million yuan in 2025. In that process, the segment’s share of total revenue jumped from 1.9% to 15.5%. The platform's average daily token consumption jumped from 271 billion at the end of 2025 to 1.028 trillion this April, and revenue from its AI cloud business also continued to grow rapidly over those four months.

Rather than simply renting out GPU computing resources, PPLabs hopes to position itself as a computing power scheduling platform. Through its self-developed systems, the company integrates heterogeneous computing resources from different suppliers, while simultaneously emphasizing its inference optimization capabilities. According to the listing application, its platform can reduce first-token latency by 95% and increase total throughput by 300% when compared to the same model using the SGLang inference engine.

In other words, the company can get more mileage out of the same amount of GPUs than rival products. Management has also put forward the concept of “agent infrastructure,” with an aim of providing underlying services to AI agents in the future.

Still in the red

Despite all the possibilities, PPLabs has yet to find profits. The company's overall gross margin dropped from 17.7% in 2023 to 12.3% in 2024, and fell further still to 9.4% last year. Its AI cloud computing business is even deeper in the red, with a gross profit margin of negative 95.1% in 2024. And while that improved to a negative 10.7% in 2025, the business is still far from profitable. The company recorded a loss of 223 million yuan last year, narrowing from a loss of 293 million yuan in 2024.

Obtaining and managing computing power is an extremely high-cost business, and PPLabs’ primary costs come from procuring computing resources from third parties. In 2025, the AI cloud business incurred costs of 132 million yuan, outstripping its 119 million yuan in revenue for the year. In other words, the company is currently still building market share by selling its services at a loss, hoping to build a scale advantage and developer ecosystem while the industry is still in an early stage of rapid growth.

The company’s financial data reflects this pressure. At the end of 2025, PPLabs’ net liabilities totaled 889 million yuan, giving it a current ratio of only 0.4 times – far less than the ratio of 1 or higher that is generally considered healthy. Not only has it recorded net operating cash outflow in each of the last three years, but the scale of that outflow has also been growing. The new listing will help the company replenish its funds, but it will still need to pour much of that back into new investments in computing power and platform construction to keep its AI cloud business growing.

One of PPLabs' greatest advantages is its asset-light business model, since it doesn’t need to build its own data centers or hold large-scale GPU assets. Instead, it focuses on computing power procurement, scheduling and optimization. But that also makes the company highly dependent on external computing power suppliers, requiring ongoing investment to ensure it can procure the computing power it needs.

At the same time, PPLabs also faces competition from much larger cloud service providers such as Alibaba Cloud, Tencent Cloud, Baidu Cloud and Kingsoft Cloud (3896.HK). Most of those possess their own data centers and GPU resources, giving them better control of their computing assets. Hong Kong investors have becoming quite fond of AI-related stocks lately, but PPLabs’ valuation will still depend on whether investors believe it can establish itself in the computer power industry chain using its asset-light model and ability to use computing power resources more efficiently than its peers.

In both PPTV and now PPLabs, Yao Xin has bet on the infrastructure business. Two decades ago, it was video transmission. Now, it’s computing power scheduling. For investors, the key lies not in the company's scale, but in whether it can establish technological skills that make its services more effective than its peers, and create a developer ecosystem around its product. If the market sees the company as an AI infrastructure platform, its valuation upside could be far higher than if it’s simply viewed as just another computing power service provider.

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The company is part of a second generation of unmanned retailers, as its Hong Kong IPO tests investor appetite for a cabinet network offering help-yourself snacks and drinks

Key Takeaways

• Fengyi Technology has filed for a Hong Kong IPO, after building China’s largest smart retail cabinet network with nearly 184,000 cabinets and 2 billion yuan in annual revenue
• The company’s business metrics are all moving in the right direction, but its thin margins show the difficulties of wringing profits from thousands of low-sales cabinets

By Hu Minghe

In office buildings, factory rest areas and campus corridors across major Chinese cities, a familiar ritual is playing out. A worker or student scans a QR code on a glass-fronted cabinet, which unlocks the door. She then opens the door, takes a bottle of tea, packet of biscuits or other drink or snack of choice, closes the door and walks away. The machine uses sensors to detect what was taken, and payment happens automatically.

Now, one of the biggest operators behind those cabinets, Shenzhen Fengyi Technology Group Co. Ltd., wants public investors to take the same “help yourself” approach with its stock. The smart cabinet operator filed for a Hong Kong IPO last week, unveiling a business that is thriving in a sector written off by many. Its menu includes some healthy growth, led by top-line revenue that rose to 2.01 billion yuan ($300 million) last year from 1.24 billion yuan in 2023. But the filing also shows why unmanned retail remains hard: Fengyi sells mostly cheap drinks and snacks, while managing a vast network of small retail points in lightly trafficked areas.

That makes the company less a hardware maker and more like a retailer whose stores happen to be tiny, unmanned and algorithm-managed. Nearly all of its revenue comes from selling goods through its cabinets, with advertising and other services still just small contributors. The company’s pitch is that AI can turn a logistics-heavy retail model into a scalable network able to operate both reliably and profitably.

Rocky history

History hasn’t been kind to this sector. China’s original unmanned retail boom began around 2017, the same year Fengyi was founded, when venture money flooded into open shelves placed in offices and gyms. The idea was simple: put snacks close to consumers in a friendly help-yourself format, and avoid store rent and cashiers. But the reality was harsher. Theft, stale inventory, poor replenishment and weak site discipline quickly wrecked the economics. Many early players collapsed almost as fast as they expanded.

Fengyi belongs to a second generation looking for success in the concept. Its cabinets are closed, reducing the theft problem that doomed open shelves. They also target what the company calls light-traffic scenarios: offices, factories, logistics parks, schools, hospitals and other semi-closed locations that traditional stores and vending machines may not cover efficiently. These places have fewer buyers than more open transport hubs or shopping malls. But they often have repeat users and lower site costs.

The tradeoff shows up in Fengyi’s market share. The company had about 184,000 installed smart retail cabinets at the end of 2025, giving it 21.5% of China’s installed base. But its share of industry gross merchandise value (GMV) was only 11.5%. Fengyi has more cabinets than anyone else, but its average cabinet sells less than higher-traffic rivals. It is betting that enough lighter traffic cabinets, managed efficiently, can add up to a profitable network.

The company is still losing money, though its earnings trend is more nuanced than the headline loss suggests. Its revenue rose 32.9% in 2024 and 21.6% in 2025. Gross margin improved from 52.4% in 2023 to 55.8% in 2025. And most importantly, it swung from a 14.2 million yuan operating loss in 2023 to operating profits of 48 million yuan in 2024 and 50.8 million yuan in 2025.

That is real progress, but not fat profitability. Fengyi’s 2025 operating margin was only 2.5%. Its selling and marketing expenses that year were 960.8 million yuan, accounting for nearly half of revenue and close to the company’s 1.12 billion yuan in gross profit. Those expenses reflect the reality of the business: site acquisition, local staff, cabinet operations, replenishment and customer service don’t disappear just because checkout is automated.

Fengyi is still losing money on a net basis due to non-cash financing items. But it’s profitable on an adjusted basis, including an adjusted net profit of 118.6 million yuan in 2025, up from 77.4 million yuan in 2024.

AI as efficiency tool

AI is central to Fengyi’s story, but should be understood as an efficiency tool rather than a magic sales engine. Fengyi’s Flow Pilot system helps decide where to place cabinets, what products to stock, when to refill them and how to route work across its network. In the fourth quarter of 2025, the system made nearly 120 million decisions a day, with about 20,000 requiring human intervention. As the system became more efficient, the average number of points handled by each operations manager rose from 303 in 2023 to 504 in 2025.

That matters in a business where it’s time-consuming and costly to manage thousands of small locations by hand. AI can reduce products running out of stock, improve selection and make refill routes more efficient for restockers. But it can’t make a quiet office corridor behave like a busy convenience store. The cabinet still needs enough real consumers reaching for enough drinks and snacks every day to create a profitable business.

Fengyi was originally founded as a subsidiary of delivery giant S.F. Holding, which helps to explain its strength in logistics. The company was incubated from a logistics culture, and that background may help it understand delivery routes, corporate customers and site operations. That relationship ended in 2024, when S.F. disposed of its remaining stake in the company, according to the listing document. Fengyi now describes itself as operating its own network of regional warehouses, front warehouses and delivery drivers.

Fengyi’s broader context operating in a Chinese environment also matters. The smart cabinet model fits China’s dense workplaces and schools, ubiquity of mobile payments and strong delivery networks.

Fengyi is not the first automated-retail name to test Hong Kong investors. Shares of smart vending machine operator Ubox (2429.HK) have lost nearly 80% of their value since it listed in 2023, as the company remained loss-making last year. Another rival, Qunabox (0917.HK), has lost about 60% of its value since its 2024 listing, even after swinging to a 290.1 million yuan profit in 2025. Those weak share performances show the bar may be high for yet another automated-retail listing.

Fengyi has already proved more than most unmanned retail startups did. It gained valuable lessons from the sector’s first shakeout, scaled its network, improved margins and has reached profitability on both an operating and adjusted net basis. The IPO now asks investors to believe AI and skillful logistics can turn a dispersed snack network into a durable and profitable retail platform. Fengyi may have solved many of the early issues with unmanned retail 1.0. But it still needs to prove that fix is valuable enough to entice public investors.

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Zhengxin Food is reportedly chasing a public listing, as its shrinking restaurant network highlights the dangers of relying on franchisees for rapid expansion

Key Takeaways:

• Zhengxin is reportedly planning a Hong Kong IPO, even as the store count for its chicken chain has contracted from 25,000 to 9,545 over the last five years
• Whether the downsizing is positive or negative, representing a ‘rightsizing’ or collapse, may depend on a closer look at the company’s financials when they become public

By Edith Terry

Its business may be shrinking, but that isn’t stopping China’s “Chicken King” from charging ahead with plans for a $300 million IPO.

That’s the word on the street, following a Bloomberg report late last month that Shanghai Zhengxin Food Group Co., China’s largest homegrown fried chicken chain, might soon join the pipeline of some 500 companies waiting to go public in Hong Kong. Although quickly denied by the company, the report included enough juicy details to keep the rumor mills churning about Zhengxin and founder Chen Chuanwu’s plans for the company.

In addition to the fundraising target, the Bloomberg report also said Zhengxin is working with domestic banking heavyweights Galaxy Securities and CICC as advisors for the deal.

Zhengxin joins a short list of other chicken chains also chasing Hong Kong IPOs. Homegrown rival LXJ International and Taiwan’s Ting-Qiao, operator of the Dicos chain, have both publicly filed for listings, though neither has made it to market yet.

KFC, operated by Yum China (9987.HK, YUMC.US), still rules China’s fast food chicken roost, with over 13,000 restaurants nationwide. But at its peak in 2021, Zhengxin’s more budget friendly chicken briefly topped KFC with its 25,000 outlets across China. It has shrunk considerably since then, though an IPO may provide the feed it needs for another run.

Zhengxin’s “Chicken King” logo, featuring a stylized rooster wearing a crown, symbolizes its aspirations in the sector. It has 188 franchises in Shanghai alone and is present through most of China. Unlike KFC, which runs traditional sit-down restaurants, Zhengxin typically uses a much smaller format more like takeaway chicken stands with very limited or no seating.

In its early days, after the chain’s launch in 2012, well-known comic actor Huang Bo helped boost the brand’s popularity in ads bragging that its chicken cutlets were “bigger than your face.” At an affordable 10 yuan, or about $1.50, per meal, including a drink, the business rapidly grew to 10,000 stores by 2017 and reached 20,000 two years later – more than twice KFC’s 9,000 stores in China at the time and seven times the 4,000 for McDonald’s (MCD.US). Zhengxin was able to grow so quickly by working with hundreds of franchisees, unlike KFC and McDonald’s, which mostly operated their own stores or worked with just one or two major partners in the market.

Growing market

Zhengxin reached its super size by tapping into a Chinese fried chicken market that grew from 60 billion yuan ($8.85 billion) in 2019 to an estimated 105 billion yuan in 2025, according to a report by the Red Food Industry Research Institute. China was home to about 164,000 fried chicken stores at the end of last year, and the category was growing at 11.7% annually.

But Zhengxin hasn’t thrived with the market since its business crested in 2021. Instead, the company has been rapidly closing stores since then, and is currently down to 9,545 stores in China, a 60% drop in five years, according to Narrow Gate Group. Zhengxin admits that its store count is down, but says the contraction was intentional.

Today, Zhengxin says it has over 12,000 stores globally, including 1,200 new stores signed in last year’s third quarter alone. The company says sales by stores under its “strong control” increased by 13% year-over-year last year, its supply chain capacity increased by 28%, and its overall performance – presumably a reference to revenue – increased by 30%.

The company’s shifting profile is the result of a “forest project” that it launched back in 2018 to develop new sub-brands, according to Zhengxin President Jin Jian. In addition, the company began downsizing its core chicken chain in 2023, phasing out older stores with outdated décor, aging equipment, and poor food safety standards.

The same year, it began a global recruitment drive as part of plans to open 4,000 overseas stores within three years. It opened its 15th store outside Mainland China and first in Japan in Tokyo’s busy Shinjuku district in May 2023.

After a global franchise recruitment conference in February 2023, Zhengxin claimed it signed 49 agreements for overseas stores, including ones in Vietnam, Thailand, Laos, Malaysia, Indonesia, Japan, the U.S., Australia and New Zealand. The largest franchisee had eight stores in Laos, and Zhengxin’s first U.S. store opened in March 2024 in Milpitas, near San Francisco.

Different narratives

While Zhengxin likes to talk about its shifting business at home and growing global footprint, critics have a completely different narrative. They say its lack of new products and frequent complaints over food safety and from unhappy franchisees continue to haunt the company.

And all the while, more competitors are piling into an already crowded market. Behemoths like bubble tea king Mixue (2097.HK), which operates more than 50,000 stores in China and another 4,500 overseas, also offers fried chicken. And hotpot king Haidilao (6862.HK) has also taken a place at the table with a separate fried chicken brand.

Given the crowded market, what is motivating Zhengxin to seek an IPO? It helps to know more about Zhengxin’s Chairman Chen Chuanwu, a serial entrepreneur legendary for his frequent and successful business pivots. A native of Wenzhou, an Eastern China city famous for its entrepreneurs, Chen built his first business in 1995 in frozen food working with Wall’s ice cream, owned by consumer goods giant Unilever (UL.US). He later opened a chain of shops selling Taiwan-style snacks, before making his fried chicken pivot in 2012.

His small-store format appealed to franchisees, with individual shops costing just 80,000 yuan to open, compared to around 5 million yuan for a typical KFC or McDonald’s.

Behind the scenes, Chen began building a logistics and production base in 1999 with 40 warehouse and logistics centers, over 400 refrigerated trucks and 10 factories. The company uses a typical franchising model that earns money through franchising fees, and by selling food products, kitchen equipment and shop furnishings to franchisees.

The bottom line is that Zhengxin’s Chen seems quite open to trying new recipes with his businesses, even if he doesn’t often talk publicly about his plans. That may be why a single report has set off such a frenzy of guessing, and why investors will be looking closely for more details on Chen’s chicken empire if and when Zhengxin files its IPO prospectus.

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Just five months after its Hong Kong IPO, the capital-hungry AI large model company has launched a plan to list on Shanghai’s Nasdaq-style STAR market

Key Takeaways:

• Knowledge Atlas plans to raise up to 15 billion yuan through a listing on Shanghai’s STAR Market, more than double what it raised in its Hong Kong IPO earlier this year
• The AI company’s Hong Kong-traded shares rose more than 10-fold at one point after their debut at the start of this year

By Lee Shih Ta

Talk about double dipping.

Just five months after debuting its shares in internationally focused Hong Kong as “China's first large model AI stock,” Knowledge Atlas Technology Joint Stock Co. Ltd.（2513.HK) has announced plans for a second listing on the Shanghai Stock Exchange's Nasdaq-style STAR Market targeting domestic investors. Emboldened by the meteoric rise of its Hong Kong shares since their January debut, the company is aiming to raise up to 15 billion yuan ($2.22 billion) in the second listing, more than triple what it raised in the first one.

As a newly listed company, Knowledge Atlas’ rapid return to the capital markets in such a short span underscores just how China's AI sector has become a frenzied dash for cash, as companies rapidly burn through their capital.

According to its Hong Kong filing last week announcing the new IPO plan, Knowledge Atlas plans to issue up to 38.8 million Shanghai-listed shares, representing about 8% of its enlarged share capital. The new funds will be used in three ways: for AI general-purpose foundational large language models (LLM); for a large model-as-a-service (MaaS) one-stop service platform; and for the replenishment of working capital. The AI general-purpose foundational large model project is the most capital-intensive, requiring 12 billion yuan alone.

The company, previously known as Zhipu, raised net proceeds of about HK$4.9 billion ($625 million) from its Hong Kong IPO in January. As of May 29, it still had about HK$2.84 billion in unutilized funds from the listing, indicating the Shanghai IPO is being driven more by industry competition and long-term planning than short-term operational needs.

Knowledge Atlas has developed at a striking pace these last few years. Its revenue last year reached 724 million yuan, up 131.9% from 2024, though its adjusted net loss was even higher at a hefty 3.18 billion yuan, widening from a 2.21 billion yuan loss in 2024. Put differently, the company's loss last year was more than quadruple its revenue, showing large model developers are still huge cash burners. The company’s focus isn’t short-term profitability, but rather developing model capabilities, computing power scale and gaining market share.

Knowledge Atlas' proposed Shanghai fundraising is equivalent to more than 20 times its full-year revenue for 2025. For an unprofitable large model enterprise, such massive financing exceeds conventional business expansion needs and looks more like preemptive resource stockpiling as competition is likely to remain intense in the years ahead.

Hong Kong first, Shanghai later

Knowledge Atlas’ decision to tap the Shanghai market isn’t due to a lack of enthusiasm for its Hong Kong shares. After going public by selling shares for HK$116.20 apiece in January, the company’s stock skyrocketed as high as HK$1,291, representing a 10-fold rise, pushing its market capitalization past HK$570 billion. Its current price-to-sales (P/S) ratio has reached an astronomical 769 times, positioning it at the very high end among even the priciest global AI concept stocks.

That shows Hong Kong investors have not only bought into Knowledge Atlas’ AI narrative, but have embraced the entire package by awarding the company such an aggressive valuation. That reality further supports the premise that the new Shanghai listing is aimed at raising more funds, rather than simply chasing a higher valuation.

In the past, many companies listed in Shanghai and Hong Kong typically listed in the former city first, tapping domestic investors, before moving to the more internationally focused Hong Kong later. But AI enterprises are breaking with that tradition. As Hong Kong investors become more receptive to unprofitable tech startups, a growing number of Chinese AI startups are beginning to opt for Hong Kong first, before returning to domestic markets in Shanghai and Shenzhen later for additional financing.

In terms of its capital depth and policy support, the STAR Market still boasts advantages that Hong Kong can’t easily match. In recent years, domestic markets in Shanghai and Shenzhen have routinely assigned higher valuations to hard tech companies than Hong Kong. Take semiconductors, for instance, where players like Cambricon Technologies (688256.SH) and Hygon Information (688041.SH) have both achieved market capitalizations in the hundreds of billions of yuan. Investors prize not merely profitability, but long-term narratives such as independence, domestic substitution and being part of China’s national tech roadmap.

Knowledge Atlas is not an isolated case. MiniMax (0100.HK), another AI company that listed in Hong Kong early this year, has also initiated the process for an eventual listing in Shanghai or Shenzhen. Although it remains premature to conclude whether the “Hong Kong first, Mainland later” route will become mainstream for Chinese AI companies, the nearly simultaneous return to the Mainland by two leading large model companies demonstrates that capital markets are increasingly vying for hot AI companies.

For Knowledge Atlas, the return to Shanghai after debuting in Hong Kong has some strategic significance beyond simply more fundraising. The Hong Kong market has already taken the lead in establishing a market-driven valuation for the company, proving that investors are willing to pay a premium for its large model narrative. But valuation is merely the first step for a company with such big cash needs, and more crucial is its access to sustained financing.

What Knowledge Atlas needs is not simply general corporate growth capital, but rather massive funds to prop up its model R&D, computing power construction, and commercial expansion for the next few years. Listing on the STAR Market after going public in Hong Kong seems, to some extent, like a strategy of proving its worth in Hong Kong first, before returning to the Mainland market where funding and policy support are more abundant.

Both Knowledge Atlas and MiniMax are currently in a phase of intense investment, signaling that China's large model sector still has a long way to go before offering a more mature business model for investors. Over the past two years, Chinese AI firms have competed on model capabilities. In the years ahead, the battlefield may well shift to financing prowess. As technological gaps steadily narrow, whoever can keep securing computing power, talent, and capital support will have the best shot at staying in the game.

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Known globally for its power banks, the company wants to be valued as a multi-category hardware maker as it files for a Hong Kong IPO

Key Takeaways:

• Anker Innovations has filed for a Hong Kong listing, seeking to add an offshore fundraising channel to its existing listing on Shenzhen’s ChiNext board
• The power bank maker’s revenue and profit are growing, but weakening cash flow, Amazon dependence and big bets on energy storage and AI audio complicate its story

By Hu Minghe

Anker Innovations Technology Co. Ltd. (300866.SZ) used to be an easy company to explain. It sold chargers, power banks and cables trusted by overseas consumers, winning it strong ratings on Amazon, the world’s biggest e-commerce operator.

That’s still the brand many global shoppers know. But as Anker pursues a Hong Kong listing, with heavyweights CICC, Goldman Sachs and JPMorgan as sponsors, the company is asking investors to look beyond the charger shelf. It wants them to believe it can turn its Chinese cross-border brand into a global shopping cart for a much wider range of consumer hardware, spanning home energy storage, smart security, headphones, projectors, creative printers and more AI-driven devices.

That puts Anker at the edge of an emerging trend for the next stage of China’s export economy. The first stage was contract manufacturing, where anonymous Chinese factories churned out products that ultimately got branded with big Western names. The second was Amazon-native direct-to-consumer sales of Chinese branded products. Anker is trying to ride a third wave by becoming a Chinese company with strong product development capabilities and a premium image that could help it break free from reliance on low prices that are often a key selling point for many Chinese brands.

The numbers give Anker a credible starting point. Its revenue rose 23.5% last year to 30.5 billion yuan ($4.2 billion), while its net profit increased 18.4% to 2.62 billion yuan, according to its Hong Kong listing document filed last week. Its gross margin has also been improving steadily, rising from 42.7% in 2023 to 43.9% last year, suggesting Anker has brand power that many Chinese hardware exporters lack.

But its net margin slipped to 8.6% from 9.7% in 2023, and operating cash flow tumbled 82.5% over that period to 481 million yuan, largely due to growing R&D costs from big spending as the company tries to diversify its product portfolio. That raises the question of whether the cost of becoming more complex is beginning to drag on the company.

‘Shallow sea’ strategy

Despite sitting on a brand that’s synonymous with power banks, Anker is already more diversified than its reputation suggests. Charging and power storage accounted for 50.5% of 2025 revenue, while its Eufy smart-home and creative products contributed 27.1% and Soundcore audio products and Nebula projectors made up 22.4%.

Founder Yang Meng, previously a senior software engineer at Google, calls his strategy “shallow sea.” That means avoiding giant categories such as smartphones, PCs and TVs, and instead entering many mid-sized electronics segments that are less competitive and where things like product design and online reviews can still sway consumers. Anker avoids going head-to-head with giants like Apple, Samsung, Huawei and Xiaomi in their strongest arenas like smartphones and PCs. Instead, it looks for niches big enough to offer strong business opportunities but still too small to attract the global giants.

The problem is that shallow seas don’t necessarily mean weak competitors, especially when it comes to emerging Chinese brands battling for recognition. In chargers, Ugreen (301606.SZ) and Baseus-like brands are pushing equally hard. In robot vacuums and smart cleaning, there are rivals like Roborock (688169.SH), Ecovacs (603486.SH) and Dreame. In portable and home energy storage, there’s EcoFlow, Bluetti and Hello Tech Energy’s (301327.SZ) Jackery brand. And in projectors, there’s Xgimi (688696.SH).

That competitive landscape explains why Anker is trying to move up the technology curve to differentiate its products from the crowd and charge more premium prices. Its Anker Solix storage products are probably its most meaningful new leg, because they extend the company’s charging and battery expertise into bigger-ticket household energy products. Its Soundcore audio business is also becoming a technology test bed: Anker has worked with Zhicun Technology on a compute-in-memory AI audio chip designed to run noise-cancelling models in low-power headphones. The company is also pushing EufyMake creative printers and AI-enabled home security products.

These efforts make Anker more interesting than the usual one-trick pony brand, but also riskier. A charger can win with good design, safety, certification and distribution. But a home energy system may need installation, after-sales service and stricter safety control. A security camera brings privacy and data-protection risk. AI headphones require chips, algorithms and longer R&D cycles. Robots require still more capital, patience and talent. And all these new products take Anker into areas where it has little experience, while also charging up its R&D spending.

Déjà vu?

Investors have seen this movie before with Anker. Around 2022, after expanding into too many product lines, the company cut a number of categories where it couldn’t build enough competitive advantage. Since then Yang has said new categories now need longer upfront investment, often three years or more. That shift helps explain why R&D spending rose 37.2% last year to 2.89 billion yuan – well ahead of revenue growth.

Channel risk is another issue. Amazon still accounts for more than half of revenue, despite Anker’s efforts to expand its own website and sell through Walmart, Best Buy, Target, Costco and other retailers. That dependence is a strength when Amazon traffic is cheap and rankings are favorable. But it can become a weakness if platform rules or fees change, or if new competition arrives and gets strong reviews.

Anker’s manufacturing is also mostly outsourced. That keeps the company asset-light, but also puts pressure on it to control quality among its suppliers. Recent recalls involving the company’s power banks in multiple markets are a reminder that consumer trust can be expensive to maintain when you have less control over your suppliers. And that issue only becomes more difficult when products move beyond small accessories into more complex household energy and security.

Valuation therefore matters. Anker’s Shenzhen shares currently trade at roughly 24 times trailing earnings, giving Hong Kong investors a visible reference point for its future Hong Kong listing. That multiple is not excessive for a branded hardware exporter whose revenue is growing by more than 20%. But it’s not cheap if cash flow is weakening and new product development keeps absorbing capital.

Anker has already proved that a Chinese company can build a trusted global charger brand. Its Hong Kong IPO asks investors to believe something more: that the same system can keep producing winners as the products become more complex, more regulated and more expensive to develop. For now, Anker is still growing. The big question is whether its many “shallow seas” can come together to create a new ocean around its growing stable of brands, or whether the foray could take it into deeper waters where it has trouble staying afloat.

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Despite lagging its rivals in size, the pet food maker hopes to attract investors to its Hong Kong listing plan, three years after its Shanghai IPO attempt stumbled

Key Takeaways:

• Fubei has filed to list in Hong Kong, reporting its profit fell 40% last year as its own-brand business contracted
• The pet food maker agreed to distribute a 100 million yuan dividend to shareholders prior to filing its listing application

By Cheng Shui Tong

China's economy may be slowing, but that hasn’t dampened the craze for pets, whose owners are happy to spend lavishly on furry friends that are often treated the same as family members. Riding that sentiment, pet food maker Fubei (Shanghai) Co. Ltd. last week filed to list in Hong Kong, hoping to sell investors on its pet-friendly story. While its business is a relative novelty for Hong Kong investors, several of its peers are already listed across the border on the Shanghai and Shenzhen stock exchanges targeting domestic investors.

This isn’t the first time Fubei has sat up and begged investors for cash. It applied for a Shanghai listing in 2021, but withdrew the application two years later, citing uncertainties over the listing timetable and adjustments to its future development strategy. While its IPO lay dormant, rivals such as Gambol Pet (301498.SZ) made their own IPO leaps with less trouble. They joined a kennel of other rivals like China Pet Foods (002891.SZ) and Petpal Pet Nutrition (300673.SZ) that listed as early as 2017 and used their new funds to aggressively expand, leaving Fubei trailing behind.

Fubei traces its origins back to 2005, when founder Wang Yingchun opened a pet food factory in Shanghai. The company launched its Bi Le brand two years later. China’s pet food market certainly has strong growth potential. It was worth 108.4 billion yuan ($16 billion) last year, and is expected to grow 10.4% annually over the next five years, according to third-party market data in Fubei’s listing document. But competition is also quite intense, with many players chasing the same group of pet owners. Reflecting that, the top 10 pet food brands account for just 22.1% of the market combined. Despite its two decades in business, Fubei's Bi Le brand only ranks ninth among pet foods nationwide, with a meager 0.9% of the market.

Declining core brand sales

Fubei divides its business into two main categories: original design manufacturing (ODM) and original brand manufacturing (OBM). ODM is an older model with lower margins, making products for other brands; while OBM products bear the producer’s own brand and carry fatter profits. The ODM business has delivered stronger sales for Fubei, which ranks second in the country among pet food manufacturers for third parties. But there’s no question that the OBM business is far more profitable.

In 2025, gross margin for Fubei’s ODM business stood at 23.1%, while OBM was more than twice that at 49.1%. Given that reality, the company naturally hopes to boost the share of business from its own-brand products. But unfortunately for Fubei, developments haven’t run in that direction over the last few years.

The company’s OBM revenue actually dropped from 432 million yuan in 2023 to 404 million yuan in 2024, and fell further to 350 million yuan last year. Notably, revenue from its core Bi Le brand fell by nearly 76 million yuan over that two-year period, showing customers were running to other names in the hotly contested market. As that happened, the OBM business fell from 41.3% of Fubei’s revenue in 2023 to just 34.3% last year. Its ODM segment moved in the opposite direction, rising from 58.6% of revenue to 61.7% over that time.

Distributor caution

Fubei’s OBM business took an especially big hit from its sales to distributors, whose purchases dropped sharply from 227 million yuan in 2024 to 166 million yuan last year. The company blamed the broader OBM decline to adjustments in its product mix, with new products taking longer to find an audience to replace older ones being phased out. Slow progress in that transition led distributors to order more cautiously, contributing to their big drop in OBM orders.

To protect its brand’s market share, Fubei has been ramping up its promotional spending. Over the last three years, its sales and marketing expenses rose from 106 million yuan in 2023 to 133 million yuan in 2025. But even those efforts weren’t enough to stop sales for its proprietary brand from shrinking. Concurrently, the company slashed its R&D spending by more than half, from 24.06 million yuan in 2023 to just 11.51 million yuan last year.

As its OBM business stumbled, the company’s overall gross margin fell from 35.7% in 2023 to 31.6% in 2025.

Dragged down by its growing reliance on the lower-margin ODM business, Fubei’s profits have move steadily downward in the last three years, even as its total revenue remained relatively stable at about 1 billion yuan. Its profit stood at about 162 million yuan in both 2023 and 2024, before skidding by 40% to 96.5 million yuan last year.

Big dividend payout

The falling profits have taken a toll on Fubei’s cash, which has fallen steadily from 626 million yuan in 2023 to 309 million yuan by the end of last year. Despite that draining liquidity, the company nonetheless opted to make a massive dividend payout. Its latest annual general meeting saw the approval of a resolution to distribute 100 million yuan in dividends to shareholders, set to be paid out this month.

Fubei isn’t the only one among its peers suffering lately amid intense competition. Gambol Pet's stock has been getting hammered, plummeting more than 60% over the past year as it reported its profit grew just 7.7% in 2025. Even after that decline, the stock still trades at a relatively high price-to-earnings (P/E) ratio of about 25 times, giving it a market capitalization of about 17 billion yuan. Similarly, China Pet's stock price has plunged by over 50% over the past year, while its profit for the year fell by 7.3%. Its current P/E ratio also stands at around 24 times, giving it a market capitalization of about 9.5 billion yuan.

Compared to that pair, which each has annual revenues of 5 billion to 6 billion yuan, Fubei is noticeably smaller in scale and even weaker on its bottom line. That means it may need to seek an IPO valuation substantially below those two industry leaders if it hopes to attract investors.

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The company has launched a new attempt to list in Hong Kong, banking on spiking prices that have made memory chip companies the latest investor darling

Key Takeaways:

• Longsys has applied to list in Hong Kong, reporting its profit surged nearly sevenfold last year to nearly 1.5 billion yuan
• The memory product maker’s short-term bank liabilities reached 6.1 billion yuan last year, nearly double the level from 2023

By Lau Chi Hang

What does it take to become a dragon? If your name is Longsys Electronics Co. Ltd. (301308.SZ), the answer is simply being in the right place at the right time. In this case, Longsys just happens to be right in the middle of a red-hot market for memory chips and related products, which have lately become investor darlings on spiking prices as the latest group of AI concept stocks.

Memory chips are playing a pivotal role as AI looks poised to dominate the future, making stocks of related companies into hot commodities. Shares of GigaDevice (3986.HK; 603986.SH) have more than quadrupled since their IPO in January, while Montage Technology (6809.HK; 688008.SH) has nearly tripled since its debut a month later. Longsys’ Shenzhen-listed A-shares have done equally well, skyrocketing more than sixfold over the past year.

The company’s Hong Kong listing attempt follows a recent pattern that has seen many Chinese firms already listed on domestically-focused markets in Shenzhen and Shanghai making second listings in Hong Kong to target the city’s more international investor pool.

The late Hong Kong stock commentator Cho Yan Chiu once famously remarked that “Riding the momentum beats relying on wisdom.” Longsys perhaps understands this best. Its initial Hong Kong listing application stumbled last year. But that may have worked to its advantage, as memory stocks have soared this year in tandem with soaring memory chip prices. Sensing an opportunity, the company refiled its listing application with the Hong Kong Stock Exchange at the end of last month.

Longsys is an independent maker of memory storage products. It was the world's second largest independent semiconductor memory product maker by storage product revenue last year, and ranked first in China, according to third-party market research in its listing document.

That document shows the company's business has been on a strong upward trajectory over the past three years, in tandem with the AI boom. Its revenue more than doubled from 10.13 billion yuan ($1.5 billion) in 2023 to 22.77 billion yuan last year, including 30% year-on-year growth in 2025. Over that time, it swung from a net loss of 816 million yuan in 2023 to a profit of 209 million yuan in 2024. Its profit then surged to 1.5 billion yuan last year as memory prices boomed.

Twin founders

Established in 1999, Longsys has evolved from a small stall on Huaqiang North Road in the then-sleepy boomtown of Shenzhen into a massive enterprise with a market capitalization of 250 billion yuan. Founder Cai Huabo boasts neither a degree from a prestigious university nor a resume from a multinational corporation. After graduating from high school, he traveled alone from East China’s Jiangxi province to Shenzhen to try his luck.

Three years later, he and twin sister Cai Lijiang scraped together enough money to launch their business. Auspiciously born in the Year of the Dragon, they combined the last character of each of their names, Jiang and Bo, with the “long” character for dragon, to create their company’s Chinese name, Jiangbolong.

Longsys started out as a chip trader. But market challenges by 2002 made it difficult to sell their chips, prompting them to turn their inventory into USB flash drives. The timing coincided with the rise of Apple's iPod, which drove massive demand for flash memory chips, not only reversing Longsys’ fortunes but also lifting it to big profits. That success prompted Cai Huabo to try his hand at manufacturing instead of simple trading. In the early days, the company focused on original equipment manufacturing (OEM), making products for other brands. But later Cai became determined to establish his own brand, which typically carriers much higher margins than OEM production.

In 2012 the company began building its Forsee memory brand, and continued to expand from there. Along the way, it acquired the Lexar brand from U.S. memory chip maker Micron (MU.US), then purchased Smart Brazil, and subsequently launched the new Zilia brand. Over the years, the company has developed an integrated model that combines product development, as well as packaging and testing.

Forsee ranked second among independent memory brands, based on its B2B sales of storage product revenue last year; Lexar also ranked second among independent B2C memory brands. Meanwhile, Zilia has been a standout in Latin America, building a position as the region’s largest independent memory brand last year.

Inflated stock

While Longsys is already a leading player in the memory space and has become popular among investors, it remains to be seen whether its lofty share price is justified or perhaps just a tad ahead of its time.

The company’s Shenzhen-listed stock soared from 70 yuan to more than 500 yuan in just a year, giving it an inflated price-to-earnings (P/E) ratio of 163. The speed and scale of its surge have been largely driven by the AI narrative. Market capital has swarmed in to seize on the momentum, pushing the stock to nosebleed levels in a very short time.

While demand for memory products certainly exists, is it possible investor optimism is overblown? The company’s ability to keep boosting profits at a rapid clip to justify the high valuation remains an open question. But the lofty valuation is an undeniable fact. Even a slight stumble in its growth makes the likelihood of a major stock correction quite high.

High debt pressure

What’s more, the company’s financials also seem to include some warning signals that may warrant attention. Its liabilities are by no means low, and its debt-to-equity ratio has been climbing steadily, rising from 112% in 2023 to 172% last year.

Its interest-bearing long-term bank borrowings reached 4.38 billion yuan last year, up 74% year-over-year. Interest-bearing bank borrowings with short-term durations have grown equally fast over the past three years, nearly doubling from 3.17 billion yuan in 2023 to 6.1 billion yuan last year. At the same time, its cash stood at just 1.47 billion yuan at the end of last year, well below its short-term liabilities.

Another warning sign comes from the company's inventory levels, which have continued to mount. Inventory grew from 5.89 billion yuan in 2023 to 7.83 billion yuan the next year, and climbed further to 11.68 billion yuan in 2025. Last year’s rise of nearly 50% alone was also notable because it significantly outpaced Longsys’ 30% growth that year.

The company’s cash flow is also less than ideal. Over the past three years, the company has consistently recorded net cash outflows from operating activities of 2.8 billion yuan, 1.19 billion yuan, and 1.2 billion yuan, respectively.

Its steady cash outflows and elevated debt are manageable for now as the memory market booms and Longsys’ stock keeps touching new records. But all that could quickly change if the memory chip industry crests and starts to subside, or if the market’s voracious appetite for AI stocks starts to wane.

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The smart garden ecosystem maker boasts strong double-digit revenue growth

Key Takeaways:

• Fairland Corp. has submitted its IPO application to China’s securities regulator, bringing it closer to a Hong Kong listing after filing its preliminary prospectus in April
• The company is using its expertise as a leading smart swimming pool equipment maker to expand into the adjacent and much larger market for smart garden equipment

By Doug Young

Outdoor living spaces are fast becoming the next frontier for smart homes, with traditional devices like pool cleaners, swim jets and even lawnmowers getting major upgrades using AI and internet connections to create smart gardens of the future. That process goes beyond simply linking devices, with the potential to reshape the way homeowners interact with their outdoor environs.

That’s the proposition being made to investors by Fairland Corp. Ltd., whose plans for a Hong Kong IPO moved ahead on May 27 when its listing application was officially accepted by the China Securities Regulatory Commission (CSRC), according to the regulator’s website. That step follows Fairland’s submission of its original preliminary prospectus to the Hong Kong Stock Exchange on April 17, followed by an updated filing on April 30.

Both the CSRC and the Hong Kong Stock Exchange must vet the listing plan and give their separate approvals before an IPO can occur, which could happen later this year.

The company hasn’t disclosed any fundraising plans just yet. But any proceeds would be used for additional development of its existing ecosystem of interconnected equipment and devices, as well as new devices in its pipeline. Its current stable of pool-related devices includes smart heat and water pumps, salt chlorinators, pool-cleaning robots, swim jets and multiport valves.

Fairland acknowledges its smart product aspirations don’t come at a low cost, reflected in its climbing R&D costs. What’s more, competition is heating up in the global market for integrated smart garden robot ecosystems, as more companies enter the rapidly growing space. That’s putting pressure on Fairland’s margins and bottom line, which it’s trying to counter by developing its own brand, rather than manufacture for other brands; and by selling more products directly to consumers, rather than through costly distributors.

The company and its peers are chasing a global integrated smart garden robot ecosystem market that was worth nearly $20 billion last year and is growing at double-digit rates. The global smart pool equipment market that is Fairland’s core business was worth $3.1 billion in 2024 and is forecast to grow 15.4% annually to $6.34 billion in 2029, according to third-party research in the preliminary prospectus. The smart garden equipment market is even larger, expected to grow 17.3% annually from $15.9 billion in 2024 to $35.3 billion in 2029.

Fairland was the largest China-based pool equipment maker in 2024 with 3.4% of the global market. Its strongest suits were smart pool heat pumps, where it controlled 15% of the global market, and smart pool water pumps, where it controlled 6.6%. Many of its devices are connected to the internet of things (IoT), allowing owners to access and use them remotely using the company’s iGarden app.

Fast growth

There are many ways to parse Fairland’s revenue, including by product type, geography and direct sales versus sales through distributors. But at the highest level, the company’s revenue is growing quite rapidly. It rose 33% last year to 1.02 billion yuan ($151 million) from 765 million yuan a year earlier. The latest annual figure is also more than double the 488 million yuan Fairland reported in 2023, showing it’s finding a growing audience for its products.

Founded in 2004, the company started off making traditional pool equipment before moving into its more automated, connected smart portfolio of devices – a transition it likens to going from feature phones of the early cellphone era to today’s smartphones that can do much more. It points to its launch of a binocular-vision AI pool cleaning robot earlier this year as one of its latest cutting-edge achievements. Such robots use the technology to actually “see” the pool environment around them to do things like avoiding obstacles and targeting areas with higher dirt accumulation for more intensive cleaning.

Such robots are the company’s second biggest breadwinner, logging 18% year-on-year growth last year to reach 104 million yuan, accounting for about 10% of its revenue. Its biggest category – and one of its strongest performers – is its core smart pool heat and water pumps, which it groups together as “energy management products.” Sales for that segment rose 31% year-on-year last year to 823 million yuan, accounting for about 80% of its revenue.

The company made its first big move beyond the pool with its launch of smart lawnmowers in 2023. That segment has recorded explosive growth since then, rising from just 167,000 yuan in 2024 to 1.43 million yuan last year, though it still accounts for less than 2% of overall revenue.

Despite the healthy increases, growing competition and high product development costs are weighing on the company’s profitability. The former element shows up in Fairland’s gross margin, which fell to 33.0% last year from 36.1% in 2024. The latter shows up in its R&D spending, which rose to 14% of revenue last year from 12% in 2024.

Its sales and distribution costs also rose to 21.2% of revenue last year from 10.8% in 2024, as it began cultivating more direct sales using its own and third-party e-commerce websites. Such efforts should ultimately help the company’s profitability by cutting out costly distributors that still account for the vast majority of its sales. Another effort at boosting its profitability comes from Fairland’s development of its own brands, including iGarden, Fairland, Aquark and Aquagem. Such higher-margin branded sales surpassed its original ODM business for the first time last year.

The bottom line for Fairland is that smart product ecosystems are clearly the wave of the future, both for swimming pools and the yards where it hopes to enter new terrain. But such efforts take both time and money, and Fairland isn’t the only company looking for a place in a global market with such strong growth potential.

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The 5-year-old eVTOL maker’s latest fundraising includes backers like Legend Capital and HSG, formerly known as Sequoia China, who join investors tied to the Shanghai government

Key Takeaways:

• Volant has raised a fresh 1 billion yuan in its series C+ funding, just a month after it raised $300 million in its series C
• The eVTOL maker reportedly plans to list in Hong Kong, boasting a well-connected executive team and a product in the regulatory certification process

By Doug Young

When it comes to electric vertical take-off and landing (eVTOL) vehicles, Shanghai Volant Aerotech Co. Ltd. certainly looks like a company that’s quite well fueled up in terms of industry prowess, investor backing and its path to a Hong Kong IPO. The company has just completed its C+ series funding, raising a fresh sum of nearly 1 billion yuan ($148 million), just a month after raising $300 million in its series C round, according to media reports.

Despite its short history, only founded in 2021, Volant also has a big list of backers, both private and government-linked, which we’ll review shortly. Its founding team reads like a who’s-who of people from the Chinese and foreign aviation sectors. And last but perhaps most important, it appears to have a product that is rapidly moving towards flight certification, as well as a strong order book from companies that have expressed interest in its products.

All this seems to point to an IPO in the not-to-distant future, and Chinese media have reported Volant has set its sights set on Hong Kong, citing insider sources. Such a listing looks likely to value Volant at more than $1 billion, given that it has raised 5 billion yuan to date, equal to about $740 million.

All that said, we’ll take a closer look at this high-flying company’s credentials, which really do look quite impressive. Volant is zooming into an increasingly crowded global eVTOL market, though also one that’s expected to grow rapidly as such small vehicles become increasingly common for the types of short flights well suited for air taxis, delivery vehicles and at scenic spots.

Many countries are putting strong emphasis on their low-altitude economy for such functions, which means Volant and its peers will get strong policy support, especially in China where the sector has been singled out as a development priority. The sector is expected to grow between 30% and 50% annually through 2030, according to different forecasts, reaching anywhere from $5 billion to as much as $15 billion by the end of that period.

Volant’s flagship product, the VE25-100, looks quite typical of the types of eVTOLs being developed. The aircraft can seat up to six, and carry commercial payloads weighing up to 500 kilograms. It runs using eight electric motors, and has a range of 200 kilometers to 400 kilometers, according to the company website.

According to the latest reports, investors in the company’s C and C+ series fundings included names like Legend Capital and HSG, formerly known as Sequoia China, as well as Dubai-based Stone Venture. Equally important, the company also has very strong government backing from investors including SAIC, Shanghai’s leading government-owned carmaker; and Futeng Capital, which also has strong ties to the Shanghai government.

Such government backing is often critical to any company’s success in China, ensuring everything from access to funding, to other resources like permits and land. In this case, the government connections are especially important as Volant seeks the critical flight certificates it will need for companies to commercially operate its eVTOLs in China. To date, one of the few to receive a certificate is EHang (EH.US), one of the industry’s oldest players whose Nasdaq listing dates back to 2020.

Destination Hong Kong

While EHang has found a place on the Nasdaq, the environment on Wall Street has become increasingly uneasy these days for Chinese companies in leading-edge tech industries like eVTOLs. EHang’s stock has gyrated in sync with the rising and falling sentiment over its own fortunes, as well as the changing sentiment on Wall Street. The company is currently worth just $770 million, though it was briefly worth five times that amount at a peak back in 2021, and was also worth nearly double that amount as recently as early 2025.

The increasingly difficult environment on Wall Street is probably a major factor steering Volant to Hong Kong, which still provides access to global investors, unlike China’s domestic A-share markets in Shanghai and Shenzhen that are largely closed to foreigners. That’s an important distinction for companies like Volant, which are developing their business in China, but clearly have a longer-term eye to the global market and want to build global investor bases.

Volant doesn’t publicly disclose any financial information, and its revenue is probably quite limited so far due to its youth and lack of aircraft certification. The company’s type-certificate application for the VE25-100 has been accepted by the East China Regional Administration of the CAAC, and the application remains under review, according to media reports.

According to its website, the company has received confirmed orders and letters of intent for 1,900 of its aircraft from potential customers including China Southern Airlines, Asian Express and ABC Finance Leasing. It says the potential orders are worth more than 47.5 billion yuan, though the vast majority of that is probably just letters of intent without any firm commitment.

Then there’s the company’s list of top executives, which really does look quite impressive, including people with experience in both the private and government sectors. The latter is quite important, as it means Volant will have good access to the aviation regulators whose approvals will be critical to its success or failure.

Founder and CEO Dong Ming previously worked at leading aircraft engine maker GE, as well as domestic aircraft maker Avic, where he worked on the C919, which is trying to challenge the Boeing 737 and Airbus A320 in the global marketplace. The company’s technical leader Yu Wei, who also uses the name William, has background as the technical manager of aviation systems at CAAC, China’s aviation regulator, as well as at Honeywell, according to his LinkedIn profile.

The company is flying into an increasingly crowded eVTOL sector, not only at home but also globally. At home, it faces competition not only from EHang but also from XPeng AeroHT, owned by electric carmaker XPeng; and Aerofugia, which is backed by automaker Geely. Globally it faces competition from the likes of Joby Aviation (JOBY.US) and Beta Technologies (BETA.US), both of which, like EHang, have already started generating revenue. While Volant is clearly a relative latecomer to the eVTOL game, its strong connections in China’s aerospace industry and government contacts certainly look like strong selling points for its future development. Accordingly, the company could be quite attractive to Hong Kong investors, who are especially interested these days in tech offerings from emerging industries with strong government support.

Anhui-based Liuliumei has changed its name for its latest attempt to list in Hong Kong, but will investors find its fruit snack business any tastier?

Key Takeaways:

• With revenue up 30% and net profit 84% over the past three years, Liuliu has a strong story to tell in its latest IPO application, following three earlier attempts
• New products and market channels are boosting the snack maker’s revenue, but price-cutting for larger customers is pressuring its margins

By Edith Terry

“Suan liuliu” is a Chinese expression that mimics the sound of sucking a lemon. A quarter century ago, entrepreneur Yang Fan registered the trademark LIUM, combining the old expression with the first letter of the word “mei,” or plum, to connate a snack made from dried plums, a fruit widely grown in his home in East China’s Anhui province.

As he tells the story, Yang, born in 1969, dropped out of school and headed to Beijing in 1988 with just 50 yuan in his pocket, then worth about $13.40. He later brought his experience as a door-to-door salesman back to his hometown of Wuhu, where he set up a pastry company in 1997. In 2006, he noticed that his dried plums had become a hit, and decided to stake his company on a market that was largely untapped at that time.

Today “Uncle Liu” or the “Plum King,” as Yang is sometimes called, presides over China’s largest fruit snack company. His latest bet is on a listing for his company in Hong Kong’s highly stoked capital market, where a record of nearly 500 companies is currently in the listing pipeline.

The Plum King’s newly renamed company, Liuliumei Co. Ltd, is one of those, after filing an application to list in Hong Kong last week. The filing marks Yang’s third attempt to list in Hong Kong, and his fourth overall if you include an attempt to list on Shenzhen’s ChiNext market in 2019. The clock is ticking in the latest attempt IPO attempt, since three of his investors are entitled to have their nearly 200 million yuan ($29.5 million) in pre-IPO funding returned if Liuliumei fails to list before late June.

Yang is a high roller in a relatively low-key but still lucrative industry. Retail sales for China’s fruit snack market totaled 52 billion yuan in 2024, accounting for 5.6% of the total snack market. And despite criticism of his single-minded fascination with relatively mundane plums and prunes, he has managed to juice up the images of both using flashy marketing campaigns.

Celebrity endorsements

For a decade between 2013 and 2023, Yang hired one of China’s most bankable film and television stars, former child actress Yang Mi, who is unrelated, as his brand ambassador. After Yang Mi, other celebrity faces for Yang Fan’s company have included singer Xiao Zhan and boy band Teens in Times, with promotional campaigns on China’s major social media sites.

The heavy spending helped to popularize his company, previously called Liuliu Orchard until the most recent listing application, when it changed its name to Liuliumei. But the aggressive marketing has also been a drag on profits.

Since bringing on a branding consultant seven years ago, Liuliumei has introduced two new product lines: plum jelly in 2019 and pitted prune products in 2023. Starting around the same time, Yang also began to focus on juicing up his sales network by working more closely on directly selling to supermarkets and membership stores, along with snack food chains.

Liuliumei’s latest filing shows its revenue rose 30% over the last three years from 1.32 billion yuan in 2023 to 1.71 billion yuan last year, while its profit nearly doubled to 182 million yuan from 99 million yuan over that time. While sales and distribution remains one of its top expenses, it has managed to bring down the figure from 23.4% of revenue in 2023 to 15.9% last year, helping profits outpace revenue growth.

But the company’s gross margin, which doesn’t factor in marketing expenses, hasn’t fared as well, falling from 40.1% in 2023 to 35.6% last year. That decline is the result of lower prices as Liuliumei cultivated supermarkets and membership stores like Sam’s Club, as well as China’s growing snack food chains. Such buyers are typically very large and thus demand lower prices than smaller distributors, chains and individual stores.

Yang’s major customers in 2024 and 2025 were both snack food chains. One was Fujian Wanchen Food (300972.SZ), parent of the Haoxianglai chain, which is eyeing its own Hong Kong IPO. The other, Busy Ming (1768.HK), raised a sizable HK$3.67 billion ($468.4 million) in its January Hong Kong listing, and is currently up about 42% from its IPO price, showing the category is big business and remains popular among investors.

Changing sales channels

As it targets more direct sales, Liuliumei’s older channels using distributors have sunk from 66.7% of sales in 2023 to 31% last year. Snack food chains rose from 10.1% of sales to 38% of sales over that time, while supermarket and membership stores rose from 12.9% to 23.5%. Liuliumei’s fourth sales channel, its online self-operated stores, declined from a 10.3% of revenue in 2023 to 7.5% in 2025.

Relatively high valuations for Liuliumei’s customers like Busy Ming, with a price to earnings (P/E) ratio of 28 and Wanchen at 21, suggest the Plum King may also be valued strongly by snack-hungry investors. A ratio in the middle of those two, or about 25, would value the company at about 4.6 billion yuan, based on its 2025 profit. But here we should point out such a valuation would still be much smaller than the HK$73 billion for Busy Ming and 35 billion yuan for Wanchen.

And not all is peachy with Liuliumei, which is still haunted to some extent by its failure to complete its listing so far. The company’s withdrawal of its first Shenzhen listing application in 2019 led to the departure of its first major investor, forcing Yang to return that investment with interest. Another group that has invested 191 million yuan in the company has a similar agreement that allows those investors to ask for their money back if Liuliumei fails to list by the end of June. That means the company is racing against the clock to complete its listing within the next month.

Liuliumei first applied to list in Hong Kong in April last year, followed by a second application in October. Both applications lapsed after it failed to complete the listing within a mandated six-month period, which explains why the company has made yet another new filing.

Another issue for investors to consider is Liuliumei’s shrinking cash reserves, which stood at just 33.9 million yuan at the end of last year, down from 78 million yuan at the end of 2024. Those question marks hanging over the company show it’s far from clear whether the market will see Liuliumei as a “plum listing” if it finally completes an IPO on its fourth attempt.

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Growing complexity of China’s power grid with the rise of AI and NEVs is driving demand for the company’s ‘simulate first, operate later’ simulation services

Key Takeaways:

• KeLiang Information has applied for an IPO, as its business feeds off surging demand for power grid simulation services driven by new energy technology and AI infrastructure
• The company embodies the concept of industrial simulation, but nearly all its revenue still comes from China and is heavily reliant on individual projects

By Lee Shih Ta

Large wind farms in Northwestern China’s Gobi Desert suddenly landing in the doldrums, or AI data centers in Eastern China driving up electricity loads, or millions of electric vehicle owners all deciding to charge up in the evening hours. Such scenarios, which are growing in frequency, increasingly put today’s power grids to the test, forcing them to balance loading capabilities with the ability to dispense power to where it’s needed.

That mix is where Shanghai KeLiang Information Technology Co. Ltd., which applied to list in Hong Kong last week, is finding a comfortable place as “invisible guardian” of China's power systems of the future.

Established in Shanghai in 2007, KeLiang provides power system simulation and verification technologies. It uses technologies such as electromagnetic transient simulation, hardware-in-the-loop (HIL) simulation, and frequency-domain stability analysis to build digital models for energy grids and large-scale energy systems, simulating their operating conditions under various extreme scenarios when they are still in the design phase.

Simply put, the company constructs virtual power grids in the digital world to simulate how energy and large-scale electricity consumption systems will perform under extreme conditions. Clients can then use that information to mitigate the risk of failures or massive fluctuations after systems are officially integrated into the grid.

The company's revenue mostly comes from its simulation tools and customized solutions. In 2025, its revenue related to new power systems reached 508 million yuan ($75 million), accounting for 84.7% of its total. That ratio was up from 72% in 2024, showing that new energy power grid services are quickly becoming the company's most important growth engine.

Large-scale construction of wind and solar farms in recent years has transformed sparsely populated areas of Northwest China, such as the Xinjiang, Gansu, and Inner Mongolia regions, into powerful new bases for power generation. That shift has necessitated the transmission of vast amounts of green electricity to China’s power-hungry eastern regions through ultra-high voltage (UHV) transmission systems and voltage source converter-based high voltage direct current (VSC-HVDC) technology.

KeLiang has participated in all of China’s VSC-HVDC power transmission projects to become operational to date, according to its prospectus. This includes the Zhangbei VSC-HVDC Project, the world's first VSC-HVDC power grid project, which transmits wind and photovoltaic power from the Zhangbei region of Central China’s Hebei province to Beijing, and previously supplied green electricity for the Beijing Winter Olympics in 2022.

Largest independent supplier

Third-party data in the prospectus shows that KeLiang was China’s largest independent domestic supplier of digital energy solutions for the new power system industry last year. It operates in a space that has long been dominated by China’s massive state-owned power grid operators and major state-owned equipment makers, making it relatively unique in its independence and market-driven focus.

More importantly, KeLiang’s industry is highly dependent on engineering case studies and long-term technological accumulation. For power grid companies, the simulation system constitutes a fundamental part of their infrastructure security planning. Consequently, grid operators are unlikely to easily allow any service providers lacking large-scale project references to participate in the verification of their core systems. That creates high barriers to entry that can benefit more established players like KeLiang, which has accumulated experience by working on more than 1,000 engineering projects to date.

The company's founder, Sang Suming, worked at the Shanghai Academy of Spaceflight Technology in his early years, before founding KeLiang in 2007. The need for high degrees of reliability for aerospace and power grid systems make both very suitable for a “simulate first, operate later” engineering mindset that underpins KeLiang’s business.

The company has posted relatively strong growth over the last two years, with revenue rising from 425 million yuan in 2023 to 599 million yuan last year, representing a cumulative 41.2% increase over that time. Its gross profit margin has also improved over that period, rising from 42.3% to 47.1%. Benefiting from the growing contribution of its higher-margin new power system business, the company's profit reached 93.03 million yuan in 2025, more than triple the 26.13 million yuan it recorded in 2024.

While many of the signs are positive, KeLiang still possesses some shortcomings. Perhaps most notably, the nature of its revenue is still heavily skewed towards a project-based model, rather than a typical software as a service (SaaS) model that provides more stable recurring revenue flows. This means that its revenue growth is highly tied to project cycles, making it more akin to a high-tech engineering services provider.

What’s more, the company currently relies almost entirely on China, deriving 99.7% of its income from the Mainland market in 2025. The company has yet to scratch the surface of the overseas market, and its current model shows its business is highly reliant on domestic infrastructure construction in China.

A positive factor for the company is China’s advancing “East Data, West Computing” project, which is seeing a large number of AI data centers being set up near recently constructed wind and solar farms in Western China. Such development, coupled with the buildup of ultra-high voltage transmission lines to bring power from Western China to the East, is making China’s grid increasingly complex. That should provide fertile ground for Keliang, as its simulation services that were once considered niche begin to attract investor attention.

Among China's current industrial simulation concept stocks, companies such as ZWSOFT (688083.SH) and Suochen Information (688507.SH) currently trade at price-to-sales (P/S) ratios ranging between 10 to 20 times. Such valuations are generally higher than those of traditional engineering companies, reflecting investor willingness to pay a premium for scarcer industrial software concept stocks. But KeLiang dependence on project contracts and engineering verification services could give pause for some investors. Whether the company can attain a valuation comparable to those of other industrial software firms will ultimately depend on its future capabilities in transitioning towards software and platform-based models that offer stable revenue streams.

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China's largest provider of intralogistics solutions for lithium-ion battery makers hopes to capitalize on the recent boom for robotic stocks

Key Takeaways:

• Zhongding Intelligent has applied to list in Hong Kong, reporting its revenue grew by nearly 5% last year
• The onsite logistics company's revenue is heavily concentrated on few new energy clients, mostly in the lithium-ion battery sector

By Bai Xin Rui

Ever since its introduction by Nvidia CEO Jensen Huang to describe AI-powered devices acting autonomously in the physical world, “Physical AI” has been taking on a life of its own. That was especially evident in the onsite logistics realm last year when Figure AI wowed observers with the launch of its Figure 03 robot, which can process 45,000 packages over 30 hours in a logistics facility. Since then, stocks blending logistics operations and robotics have become a new investor darling in their own right.

Riding that wave, Chinese intelligent logistics equipment and system integration provider Zhongding Intelligent (Wuxi) Technology Co. Ltd. submitted its application for a Hong Kong IPO earlier this month.

Founded in 2009, the company initially collaborated with a new energy firm to provide stacker cranes. It was acquired in 2016 by Shanghai-listed Noblelift Co. (603611.SH), which currently holds nearly all of Zhongding’s shares with a 99.6% stake.

Logistics spending in China is massive, worth 19.5 trillion yuan ($2.86 trillion) last year, forming a crucial pillar of the economy. The industry is broadly divided into external and onsite logistics, the latter also known as intralogistics. While external logistics primarily covers various transportation modes and supply chains between separate companies and facilities, intralogistics focuses on production lines and inventory systems within individual factory and warehouse walls. Driven by technological advancements, the broader logistics sector is shifting toward high-end, intelligent development to boost efficiency and reduce human error.

Compared to external logistics, intelligent intralogistics has higher technological barriers, covering multiple stages of operations, such as storage, conveying, and sorting, within factories and logistics parks. The global intelligent intralogistics market grew from 379.8 billion yuan in 2021 to 528.6 billion yuan last year, averaging 8.6% annual growth. Fueled by the increasing use of intelligent intralogistics solutions worldwide, the market is expected to keep growing at a strong clip to potentially surpass 850 billion yuan by 2030.

Profit, revenue continue to grow

Intelligent intralogistics solutions require the integration of various software and hardware components to function. Key hardware includes automated storage and retrieval systems (AS/RS), automated conveyors, sorting systems and robots. Accompanying software primarily consists of warehouse control systems (WCS) and warehouse management systems (WMS).

Automated storage and retrieval systems significantly boost storage density by making better use of vertical space, drastically reducing land costs. Stacker cranes are core equipment within these systems, while robots are used in stages such as material handling, picking, and conveying to reduce the need for manual labor. China’s status as the world's largest manufacturing powerhouse, accounting for nearly 40% of total global industrial output, means its demand for such equipment is huge.

The country’s intelligent intralogistics solutions industry was worth 111 billion yuan last year, and is expected to grow at an average annual rate of 11.1% to 187.7 billion by 2030, according to third-party market research in Zhongdian Intelligent’s prospectus.

But China’s intralogistics landscape is highly fragmented, with the top five players accounting for just 9% of the market. Zhongding Intelligent ranks fourth, but its market share stands at just 1.6%. The industry leader’s share isn’t much higher at just 2.1%, showing the race remains tight among even the leaders. That high fragmentation leaves Zhongding Intelligent well-positioned to emerge as a consolidator if it can successfully boost its market share both organically and through acquisitions.

Zhongding Intelligent's revenue is growing, though not at lightning speed. The figure rose from 1.8 billion yuan in 2024 to 1.88 billion yuan last year, up 6.1% and 4.7%, respectively, in those two years. Over that period, its net profit rose 13.4% to 88.63 million yuan in 2024, and another 9.8% last year to 97.37 million yuan. Its gross margin climbed to 15.1% last year, marking a 2 percentage point improvement from the previous year.

High customer concentration

A breakdown by industry reveals the vast majority of Zhongding’s revenue – about 1.68 billion yuan last year – comes from the new energy sector, which accounted for 93.8% of its smart intralogistics solutions revenue. This segment generated a gross profit of 263 million yuan, equal to a gross margin of 15.7%. The company further specifies that its “new-energy operations” encompass warehousing and intelligent production solutions tailored for lithium-ion batteries. Since lithium-ion batteries are sensitive to environmental conditions and can pose safety risks, such as combustion if mishandled, they demand extraordinarily rigorous safety standards for warehousing and transport.

Zhongding Intelligent ranks first among providers of intelligent intralogistics solutions in China's new energy lithium-ion battery sector. The country’s lithium battery shipments reached 1,100 GWh last year — accounting for over half of the global total. What’s more, they are expected to more than double to 2,600 GWh by 2030, providing fertile ground for Zhongding to feed off.

Zhongding’s client concentration from the lithium-ion battery sector is quite high and getting higher, growing from 77.1% of its revenue in 2023 to 92.6% last year. Moreover, raw materials constitute a massive portion of the company’s expenses, representing between 72% and 75% over the same three-year period. Its reliance on raw materials like steel plates means the company is highly exposed to related price fluctuations. That means rising commodity prices that can’t be passed on to clients could cause the company’s overall gross margin to suffer.

Overall, Zhongding Intelligent operates in a highly attractive industry with big growth potential and has been consistently profitable. As a reference, logistics equipment peer Geekplus (2590.HK) currently trades at a very high forward P/E ratio of more than 100 times. But Geekplus boasts gross margins as high as 37%, significantly above Zhongding Intelligent's. That means Zhongding is unlikely to try to price its IPO at such a lofty valuation. Nevertheless, a high but more realistic forward valuation of 30 times could make the stock compelling, given the big growth potential in China and current strong appetite for robotic stocks. International expansion could also hold out big promise, since the company’s global revenue currently sits at just 5.7% of its total.

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The maker of enterprise resource planning solutions for manufacturers has applied to list in Hong Kong, seeking funds to expand its Athena Digital and Intelligent Platform

Key Takeaways:

• Digiwin has filed for a Hong Kong IPO to complement its current Shenzhen listing, reporting stable but unimpressive profit growth over the last three years
• The company's valuation isn’t cheap, including a P/E ratio of more than 70 for its Shenzhen-traded shares

By Lau Chi Hang

For Sun Ur-bane, the best decision he ever made was to shift the development focus of his company, Digiwin Co. Ltd. (300378.SZ), from his native Taiwan to the Chinese Mainland over two decades ago. That decision opened the door for Sun to ride an era of explosive growth among a new field of Chinese small- and medium-sized enterprises (SMEs), as Beijing embraced market economics. Now, Sun’s company is taking further steps into the international market with its application last week for a Hong Kong IPO.

Born in Taiwan in 1948, Sun got degrees in physics and information management before founding Dingxin Computer in 1982. The company initially focused on enterprise resource planning (ERP) products, and went on to list in Taiwan as its operations grew. It began to develop the Mainland China market after 2000, and at one point even established a joint venture with Digital China, the IT services spinoff of PC giant Lenovo.

Winning bet on the Mainland

As the 21^st century began, Sun saw how China’s economy was rapidly developing and the many business opportunities that presented. In response, he decided to concentrate his company's focus entirely on the Mainland. Reflecting that shift, he delisted his company from the Taiwan Stock Exchange in 2008 and later renamed it as Digiwin.

That decision turned out to be the right one, as rapidly developing Mainland enterprises readily gobbled up Digiwin’s ERP software. That growth led Digiwin to seek a new financial home on the Shenzhen Stock Exchange’s then-young ChiNext board for growth companies in 2014.

The company's current main business is providing digital and intelligent solutions for key business processes in the manufacturing industry, allowing enterprises to improve their efficiency through digital and intelligent transformation. Its business lines include provision of digital and intelligent software products, integrated digital and intelligent software and hardware solutions, and digital and intelligent technical services.

Hon Hai, the world’s leading contract manufacturer for electronics, has long been a Digiwin supporter. Its Foxconn Industrial Internet subsidiary currently holds 12.37% of Digiwin’s shares, and is part of an “acting-in-concert” group that collectively holds 20.12% of the company’s stock and includes Sun, as well as Digiwin Chairman Yeh Tzu-chen.

After more than 40 years in its space, Digiwin has carved out a comfortable place in China’s industrial manufacturing sector as a leading software supplier. According to third-party market data in its prospectus, Digiwin was the largest domestic provider in the Chinese manufacturing digital and intelligent solutions market in 2025, based on revenue. It ranks fifth in that market overall, with 1.4% share.

Slow growth

Despite its steady advancement and top-tier status in the manufacturing digital and intelligent solutions market, Digiwin lacks an explosive growth story to dangle in front of potential Hong Kong investors.

The company’s revenue has climbed steadily over the past three years, rising from 2.23 billion yuan in 2023 to 2.43 billion yuan in 2025. But the annual growth rate is quite low, at just a few percentage points. Its profit has grown at an equally unimpressive pace, barely rising from 155 million yuan in 2023 to 158 million yuan the next year, before picking up to 174 million yuan in 2025. Unlike many new listing candidates whose top line gains are accelerating, Digiwin’s modest gains create an impression of just the opposite.

Other elements of the company's financials are also far from dazzling. To the contrary, they appear to show more signs of a slowdown. The company’s trade receivables and bills receivable reached 909 million yuan by the end of last year, up nearly 40% from 655 million yuan in 2023. Turnover days for trade receivables also climbed over that time from 57.4 days in 2023 to 95.3 days last year, rising by nearly 38 days. At the same time, Digiwin’s inventory turnover days also rose steadily over the period, climbing nearly 50% from 24.2 days to 36 days.

Those metrics all rose far more quickly than the company’s revenue, though the underlying reason isn’t directly stated. Could it be due to a deliberate decision to relax customer payment terms to maintain the company’s sales volume?

Additionally, Digiwin’s impairment losses on financial assets have been growing steadily in the last three years, rising from 26.45 million yuan in 2023 to 57.79 million yuan last year. The losses owe mainly to increased provisions for expected credit losses on trade receivables, reflecting rising bad debt.

High valuation

When compared to industry peers, both Kingdee International (0268.HK) and Yonyou Network Technology (600588.SH) boast higher visibility and greater customer usage volumes in the ERP market than Digiwin. Last year, revenue for each of those companies was also two to three times higher than Digiwin’s, and they were both far larger in terms of market cap.

In terms of valuation, Kingdee’s price-to-earnings (P/E) ratio exceeds 300 times, and Yonyou Network remains money-losing, showing how difficult it is to make big profits in this area. The P/E ratio for Digiwin’s Shenzhen-listed shares is lower at 72 times, though even that level seems high. Unless the company's profit can improve significantly, the risk-reward ratio at the valuation level of its Shenzhen stock appears unattractive.

For the time being, the company's future may hinge on its “Athena Digital and Intelligent Platform.” The company began an all-out effort to develop the platform in 2022, and has been gradually integrating it into its core digital and intelligent solutions for manufacturers. Digiwin says the Athena Platform is at the core of its AI strategy, and expects it to help the company maintain its edge in the competitive market. A big portion of funds from the Hong Kong listing is earmarked for the platform, whose success or failure could be a key factor for the company's future development.

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The pig and chicken breeder has filed to list in Hong Kong, with mid-sized underwriter CMS International as the sponsor

Key Takeaways:

• Tinoos Group has filed for a Hong Kong IPO, reporting gross profit for both its Qingyuan chicken and pork businesses both fell substantially last year
• The meat producer’s revenue dropped by more than 10% in 2025 to 4.3 billion yuan on falling meat prices, sending the company’s bottom line into the red

By Bai Xin Rui

Chickens from the city of Qingyuan in Guangdong province are renowned throughout China, lauded as “top of the roost” among regional chicken breeds. That fame, combined with a hot IPO market, are driving top Qingyuan chicken breeder Guangdong Tinoos Group Co. Ltd. to file for a Hong Kong listing, aiming to attract investors with the fame of its high-profile core product. Mid-sized underwriter CMS International is sole sponsor for the deal, indicating it’s likely to be relatively small, raising less than $100 million.

Founded in 2003 as a poultry farmer, Tinoos has evolved into one of China’s leading providers of high-quality meat products. The company runs a vertically integrated whole-industry-chain system centered on its core Qingyuan chickens, pigs and other meat products, encompassing breeding, feed production, slaughter, and food processing, as well as brand marketing.

Tinoos is the clear king of China’s Qingyuan chicken roost, accounting for about two-thirds of the national market, according to third-party data in the prospectus. It ranks sixth among all yellow-feathered broiler providers in China. Its pork business, based in the city of Chongqing, ranks tenth among pig breeders in Southwest China.

Boosted by policy support and growing “brand” awareness, Tinoos points out that the market for Qingyuan chickens is expected to expand from 1.88 billion yuan ($276 million) in 2025 to 2.92 billion yuan by 2030, representing 10.4% annual growth.

But don’t let its Qingyuan reputation fool you. While Tinoos is indeed China’s largest supplier of Qingyuan chickens, its core business is actually pork. In 2025, its pig business accounted for 62.4% of the company's revenue, reaching 2.66 billion yuan. Qingyuan and other local chickens accounted for just 22.9% of the pie, amounting to 975 million yuan.

The company’s gross profit last year totaled 457 million yuan, sliding 49% year-on-year. Within that, the live pig business supplied 306 million yuan, or 67.1% of the total, down 53.5% year-on-year; gross profit from Qingyuan and other chickens was a slimmer 57 million yuan, down by an even sharper 67.6%, accounting for just 12.5% of the total.

The gross profit plunge owed mostly to tumbling prices. The prospectus reveals that while Tinoos’ live pig sales volume was flat last year at 1.4 million heads, the average selling price fell 16.8% from 2,281.6 yuan per head in 2024 to 1,897.8 yuan last year.

The story was similar for Qingyuan chickens, whose average price fell 15.9% from 37.2 yuan per head in 2024 to 31.3 yuan last year. Unlike pork, sales volume for the chicken business actually grew 8.2% year-over-year last year to reach 31.1 million heads. Furthermore, a 2% year-on-year rise in the first quarter for yellow-feathered broilers, which tend to move in tandem with Qingyuan chickens, shows chicken prices may finally be stabilizing.

War fallout

The falling prices caused Tinoos' revenue to drop by 10.8% to 4.26 billion yuan last year, dragging the company into the red with a 102 million yuan annual loss, reversing a profit of 890 million yuan in 2024. Looking ahead, a greater cause for concern is whether the Middle East conflict could pressure the company’s costs for feed, its biggest expense. Feed costs alone have accounted for between 66% and 70% of Tinoos’ cost of sales over the last three years, consisting mostly of corn and soybean meal.

The corn-growing process requires intensive use of nitrogen fertilizer that generally accounts for 60% to 70% of total fertilizer costs for the crop. The main raw material for nitrogen fertilizer production is urea, which is typically refined from natural gas. That’s where the Middle East comes in, since its high capacity for low-cost natural gas has given it more than 30% of the global export market for urea.

The ongoing U.S. and Israeli war with Iran, and resulting closure of the Strait of Hormuz, caused the price of urea to briefly soar above $700 per ton in April, representing a massive 80% increase over February. Observers believe the big price jump will ultimately trickle down into feed prices, which could deal a fresh blow to Tinoos as it struggles with low pork and chicken prices.

Oversupplied pork market

Tinoos’ reliance on pigs, despite the fame of its chickens, could also be problematic due to slowing demand for pork, the country’s most popular meat. China's pork production capacity reached 720 million heads in 2025, translating to just 1.8% average annual growth for that market between 2021 and 2025. A saturated market and falling prices have led research institutes to forecast that China's pork production capacity will start to fall, dropping to 680 million heads by 2030. That means Tinoos could also be forced to retire some of its older, less efficient capacity, pressuring its revenue.

Other pork-related stocks include WH Group (0288.HK) and Joycome Foods (1610.HK), which currently trade at price-to-book (P/B) ratios of 1.3 times and 0.67 times, respectively. Tinoos is far smaller than WH Group, whose high valuation also owes to its controlling stake in U.S.-listed Smithfield Foods (SFD.US). Tinoos is also hamstrung by weaker prospects for China’s pork industry, and is unlikely to get much of a lift from its high-profile but much smaller chicken business. That combination of factors means a targeted P/B ratio of 0.7 times for its IPO, similar to Joycome’s, might be all that Tinoos can hope for. If it aims too high, it could find a lack of investor appetite for the stock, causing its shares to sink on their trading debut.

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