Core Viewpoint - The recent IPO of Zhida Technology, known as the "first stock of smart charging piles," has attracted significant attention due to its massive oversubscription and soaring stock price, despite the company's poor financial performance and high debt levels [1][2][17]. Group 1: IPO Performance - Zhida Technology's IPO was marked by an oversubscription of 5,440 times, with approximately HKD 250 billion in frozen funds, making it the "super subscription king" in the Hong Kong stock market for the year [2]. - On its first trading day, the stock price surged by 192%, closing at HKD 195.5, with a market capitalization reaching HKD 11.6 billion [2]. Group 2: Financial Performance - The company has experienced declining revenues for three consecutive years, with figures of CNY 697 million, CNY 671 million, CNY 593 million, and CNY 217 million from 2022 to Q1 2025, resulting in a compound annual growth rate of -7.76% [4]. - Since its establishment in 2010, Zhida Technology has never reported a profit, with a loss of CNY 236 million in 2024, which is more than three times the previous year's loss [5]. - The company's debt-to-asset ratio exceeds 900%, indicating that over 90% of its total assets are financed through debt [6]. Group 3: Business Strategy and Challenges - The IPO is viewed as a "lifesaving drug" for the company, as it faces declining gross margins, which fell from 20.4% in 2022 to 14.9% in 2024 due to price wars in the electric vehicle sector [7]. - Zhida Technology has consistently reported negative operating cash flows from 2022 to Q1 2025, indicating a lack of self-sustaining financial capability [8]. - The company faces significant cash flow issues, with accounts receivable turnover days exceeding 200, meaning it takes over six months to collect payments after delivering goods [9]. Group 4: Market Position and Future Prospects - Despite its financial struggles, Zhida Technology has positioned itself as a leader in the global home electric vehicle charging pile market, with over 1.3 million units shipped and a market share of approximately 9% globally and 13.6% in China [13]. - The company is shifting its focus to international markets, with overseas revenue increasing from 1.9% to 12.1% in 2024, and plans to allocate 38% of IPO proceeds for overseas expansion [14]. - The choice to list in Hong Kong is strategic, as the market is more accommodating for companies like Zhida Technology that are still in the red but have compelling narratives to tell [15]. Group 5: Investor Dynamics - The backing of major stakeholders like BYD, which not only invested in Zhida Technology but also serves as its largest customer, enhances the company's market appeal [13]. - The founder, Huang Zhiming, is under pressure due to a performance guarantee agreement with investors, which necessitated the IPO to avoid personal financial penalties [10][11].