Core Viewpoint - Beijing DeepZero Technology Co., Ltd. (DeepZero) is seeking to list on the Hong Kong Stock Exchange, but it faces significant challenges as its revenue and net profit are declining in contrast to the high growth rates of the industry [1][4]. Company Overview - DeepZero claims to be the leading company in China's marketing and sales decision AI application market, yet it has reported a decline in both revenue and net profit for 2024 [1][4]. - The company aims to use the funds raised from the IPO for continuous R&D, expanding its sales network, seeking strategic acquisitions, and general corporate purposes [2]. Financial Performance - Revenue for DeepZero from 2022 to 2024 was 5.43 billion, 6.11 billion, and 5.38 billion RMB, respectively, with a year-on-year decline of 11.9% in 2024 [4][5]. - Net profit figures for the same period were 59.36 million, 60.66 million, and 21.97 million RMB, showing a significant year-on-year decline of 64.5% in 2024 [4][5]. Market Position - DeepZero claims a market share of 2.6% in the marketing and sales decision AI application market, ranking first, but the top three companies only hold a combined market share of 7.1% [7][8]. - The competitive landscape includes several AI giants, such as Fourth Paradigm and SenseTime, which have significant advantages in the market [8][9]. Profitability and Margins - The overall gross margin for DeepZero from 2022 to 2024 was 30.9%, 31.2%, and 27.3%, indicating a downward trend [10][11]. - The gross margin for its intelligent advertising business was 27.7%, 30.7%, and 27.4%, while the intelligent data management business saw a more significant decline from 45.9% to 26.6% [10][11]. R&D Investment - R&D expenditures for DeepZero from 2022 to 2024 were 46.87 million, 54.06 million, and 56.34 million RMB, representing only 8.6%, 8.8%, and 10.5% of total revenue, which is significantly lower than industry peers [13][15]. Customer Concentration - Revenue from the top five customers accounted for over 50% of total revenue from 2022 to 2024, indicating a high concentration risk [16]. - The largest customer, Alibaba, has seen its contribution drop from 4.4 billion RMB in 2021 to approximately 0.9 billion RMB in 2024, leading to a shift in the customer base [17].