LEO(SZ:002131) Sou Hu Cai Jing·2025-10-16 02:01Core Viewpoint - Liou Co., Ltd. has submitted its prospectus to the Hong Kong Stock Exchange for an IPO, aiming to join the "A+H" listing trend, despite its impressive stock performance over the past year, which saw a price increase of over 230% and a new 10-year high [2][6]. However, the prospectus reveals multiple concerns that cast a shadow over the IPO [2]. Business Overview - Established in 2001, Liou Co. started in the pump industry and expanded into digital marketing through acquisitions in 2014, forming a dual business model of "Digital Marketing + Pumps and Systems" [3]. The digital marketing segment integrates marketing processes and includes self-developed AI-driven platforms to enhance efficiency and effectiveness [3][12]. Market Position - Liou Co. ranks second in the domestic pump and systems market and holds the top position in China's digital marketing and digital advertising agency sectors, according to Frost & Sullivan [5]. Financial Performance - The company's revenue from 2022 to 2024 is projected to be 20.27 billion, 20.47 billion, and 21.17 billion RMB, respectively, with a decline in the first half of 2025 to 9.64 billion RMB compared to 10.66 billion RMB in the same period of 2024 [6][9]. The gross profit margin is low at 8.8%, with the digital marketing segment's margin dropping to 4.4% in the first half of 2025 [13][14]. Profitability Issues - Liou Co. has experienced significant profit volatility, with net profits of -454 million, 1.94 billion, and -304 million RMB from 2022 to 2024, and a profit of 468 million RMB in the first half of 2025 [6][8]. The company's reliance on Li Auto's stock performance has heavily influenced its profitability [8]. Revenue Breakdown - Digital marketing accounts for nearly 80% of total revenue, but this segment has seen a decline in 2024 and the first half of 2025 [10]. The pump and systems business also showed fluctuations, with a slight decrease in revenue in the first half of 2025 [11]. Challenges - The company faces challenges in domestic market performance due to macroeconomic pressures and industry competition, while overseas business has shown strong growth [11]. Additionally, high media costs for acquiring user traffic and significant accounts receivable pose risks to profitability [15][16]. Dividend Policy - Despite the volatility in performance, Liou Co. has maintained its dividend policy, distributing 202 million RMB in 2024 and 193 million RMB in the first half of 2025 [17]. Conclusion - Liou Co.'s dual business strategy has attracted capital attention, but issues such as weak growth in core businesses, profit volatility, low margins in digital marketing, and high accounts receivable present potential risks as the company pursues its "A+H" listing [17].