Core Viewpoint - Shenzhen Huafu Technology Co., Ltd. has submitted its IPO application to the Hong Kong Stock Exchange, with plans to use the raised funds for R&D, AI service enhancement, strategic investments, and general corporate purposes [1][3]. Group 1: Company Background and Business Operations - Huafu Technology is a pioneer in full-stack AI technology solutions, focusing on integrating advanced AI algorithms, computing power management, and hardware technology for various industry applications [4]. - The company has experienced a decline in revenue, with total income dropping from 4.22 billion RMB in 2022 to 1.69 billion RMB in 2025, reflecting a downward trend [9]. - The net profit has shown significant volatility, with figures of 553.76 million RMB in 2022 and 250.87 million RMB in 2025 [9]. Group 2: Financial Health and Risks - As of June 30, 2025, Huafu Technology's accounts receivable, prepayments, and other receivables accounted for 63.76% of current assets, indicating high credit risk [11]. - The company's accounts receivable ballooned from 210 million RMB to 790 million RMB between 2022 and 2024, with the proportion of accounts receivable to revenue soaring from 49.71% to 204.68% [10]. - The bad debt provision of 18.33 million RMB is significantly lower than the overdue accounts receivable, raising concerns about the adequacy of provisions [13]. Group 3: Shareholding and Control Issues - The actual controller, Zhang Huan, increased his voting power from 29.94% to 40.96% by signing voting rights entrustment agreements with several shareholders just before the IPO application [5][6]. - There are concerns regarding the timing of the voting rights agreements and whether there are undisclosed arrangements that could affect corporate governance [5][8]. Group 4: Competitive Landscape and Market Position - Huafu Technology's core business, AI vertical industry applications, has seen a significant revenue decline, dropping from 281 million RMB in 2022 to 82 million RMB in 2024 [15]. - The company has shifted focus to AI computing services, which have shown rapid growth, but the overall competitive pressure in the AI sector is expected to increase [16][17]. - The reliance on a few major clients for revenue raises questions about the stability and sustainability of its business model [14].

Core Viewpoint - Shenzhen Huafu Technology Co., Ltd. (referred to as "Huafu Technology") is preparing for an IPO on the Hong Kong Stock Exchange, aiming to leverage its position as a leading provider of full-stack AI technology solutions in China [2][12]. Business Overview - Established in 2015, Huafu Technology focuses on integrating advanced AI algorithms, powerful computing capabilities, and cutting-edge hardware and software technologies to provide AI intelligent solutions across various industries [2][3]. - The company is recognized as one of the top ten full-stack AI technology solution providers in China according to a report by Frost & Sullivan [2]. Product and Service Offerings - Huafu Technology has developed a proprietary integrated technology platform called "Unicorn AI," which supports model development, large-scale distributed training, real-time inference services, and elastic computing resource scheduling [3]. - The company offers three main service categories: - **AI Intelligence**: Multi-scenario intelligent recognition solutions with an accuracy rate exceeding 99% [5]. - **AI Vertical Industry Applications**: Tailored solutions for specific industry challenges, covering feasibility studies, infrastructure planning, and deployment [5]. - **AI Computing Technology Services**: Custom technology services for computing infrastructure to meet the demands of large model applications and scientific computing [5]. Shareholder Structure - Prior to the IPO, the major shareholders include Mr. Zhang Huan (29.94% ownership) and a group of individuals holding 11.02% through voting rights delegation, collectively controlling approximately 40.96% of the voting rights [4][6]. - Other notable shareholders include various investment firms and capital management companies [4][6]. Board of Directors - The board consists of nine members, including four executive directors led by Mr. Zhang Huan as Chairman and General Manager, and three independent non-executive directors with significant academic and professional backgrounds [8][9]. Financial Performance - The company's revenue for the years 2022, 2023, 2024, and the first half of 2025 was reported as RMB 422 million, RMB 391 million, RMB 386 million, and RMB 169 million respectively, with corresponding net profits of RMB 55.38 million, RMB 36.80 million, RMB 66.11 million, and RMB 25.09 million [10][11].