Cosmoplat asserts independence from parent Haier with Hong Kong IPO

The provider of industrial intelligence products relies on its well-known parent for more than half of its revenue, but the amount has been falling steadily

Key Takeaways:

• Cosmoplat IoT Technology has filed for a Hong Kong IPO, boasting accelerating revenue growth and its first profits in 2024, but also surprisingly low margins
• The provider of industrial intelligence products is being spun off for a separate listing from home appliance giant Haier, which provided 58% of its revenue last year

By Doug Young

Having a wealthy, famous parent is a classic double-edged sword if you’re a company that’s lucky enough to be born into such a family. On the one hand, as the offspring you can draw on your parent’s fame and other resources to build up your own business and reputation. On the other, such offspring are inherently dependent on their famous parents in the beginning, and trying to break out of their orbits can often prove difficult, if not impossible.

That relationship describes the situation for Cosmoplat IoT Technology Co. Ltd., a tech company whose application for a Hong Kong IPO last week represents the latest step in its efforts to emerge from the shadow of Haier Group, its massive parent that is one of China’s leading home appliance and electronics makers.

The IPO application was one of the last of more than 100 published by the Hong Kong Stock Exchange in January, a huge amount for what’s normally a slow month, as the city experiences one of its strongest IPO markets in years. Whether Cosmoplat can stand out from that huge crowd is a big question, though its Haier lineage should certainly help.

Founded in 2017 as Haier Industrial Holdings Co. Ltd., Cosmoplat took on its current name with its conversion to a joint stock company in 2022, marking the start of its attempts to assert its independence from Haier. It bills itself as a provider of industrial intelligence products and solutions that integrate AI, big data and IoT for the manufacturing sector.

Put more simply, Cosmoplat provides products and services that help companies gather and make sense of their huge volumes of data to run their operations more efficiently. Its customers are manufacturers covering a range of sectors, including home appliances, machinery equipment, electronics, automotive, energy and chemicals.

As part of its ongoing transformation, the company sold off its mold-making business last year to another Haier unit to focus on its core industrial intelligence business. Not long afterwards, it acquired another company, Shanghai Discovery Group, last August, giving it an entry into the green manufacturing solutions business. More on that acquisition shortly.

Cosmoplat isn’t shy about its Haier roots, with the name of its famous parent mentioned 273 times in the listing document. But it’s also quick to point out that it has more than 9,500 paying enterprise customers as well.

Such big numbers are quite common among listing candidates, seeking to show they have a broad range and diverse array of customers. But a deeper dive into the listing document shows Cosmoplat’s biggest customer accounted for 58% of its revenue in the first nine months of last year. While that’s high, it’s an improvement from 2023, when the single largest customer accounted for 72% of its revenue.

While it’s never directly stated, that huge presence in its customer book is almost certainly Haier. The fact that Haier still accounts for more than half of Cosmoplat’s revenue is worrisome, though the downward trend is positive. The addition of Shanghai Discovery Group’s business to Cosmoplat’s revenue starting from last September will further drive down the Haier reliance, potentially even pushing it close to or even below the 50% level.

Accelerating growth, weak margins

Three things stand out about Cosmoplat’s financials, led by the positive elements of accelerating revenue growth and its recent move into the black. On the negative side, the company’s gross margins are surprisingly low for this kind of tech company, and are falling in its two core areas, probably reflecting its customer diversification drive.

This highlights another problem of having a wealthy parent, namely, that parent is often willing and able to purchase products from its offspring at inflated prices. But once that offspring goes out into the real world, it quickly discovers it needs to offer prices that are more competitive to potential new customers, undercutting its margins.

The company’s revenue from continuing operations, which excludes the molds business that was sold last year, grew just 1.6% in 2024 from the previous year. But then the growth rate picked up to 22% in the first nine months of last year, as the figure for the latest period rose to 4.42 billion yuan from 3.63 billion yuan a year earlier.

The growth rate is likely to pick up even more when Cosmoplat starts adding revenue from Shanghai Discovery Group starting from September last year. The Shanghai company’s revenue nearly doubled to 396 million yuan in the first eight months of last year from 201 million yuan a year earlier, as it most likely experienced strong demand from manufacturers looking for ways to reduce their carbon emissions in line with China’s aggressive carbon reduction goals.

Then there’s the less positive issue of margins. Cosmoplat’s gross margin has been relatively stagnant at an unimpressive level of around 18% over the last three years. By comparison, Tuya (TUYA.US), a provider of AI internet of things (AIoT) services for smart device makers, has a gross margin of 48%, which is far more typical of providers of such high-tech services.

What’s more, Cosmoplat’s gross margin for its IoT solutions, its main segment that accounted for 71% of revenue last year, was just 12.7% in the first nine months of 2025 and has been falling over the last two years. The margin for its other main segment in data solutions is much higher at 31% in the latest nine-month period, though it’s also generally falling.

Cosmoplat has been quite effective at controlling costs, with administrative, marketing and R&D all dropping steadily over the last three years as a percentage of revenue. That helped the company become profitable in 2024, and its profit from continuing operations in the first nine months of last year more than doubled to 129 million yuan from 53 million yuan a year earlier.

Investors will be watching closely to see how Cosmoplat advances in its efforts to stake out its own identity separate from Haier in the coming years. One other corporate offspring we’ve reported on that attempted a similar separation was financial technology company OneConnect, which was spun off from financial services giant Ping An and separately listed.

But despite its best efforts, OneConnect could never free itself from Ping An, and ended up being privatized by its parent from the New York and Hong Kong stock exchanges last year. Cosmoplat certainly seems to be making better progress in asserting its independence, though it will need to improve its margins if it wants to convince investors of its prowess as a cutting-edge tech company.

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