Core Viewpoint - Beijing Defeng New Journey Technology Co., Ltd. has submitted its main board listing application, highlighting its position as a "hidden champion" in the industrial AIoT sector, serving major state-owned enterprises like State Grid and oil giants [1][2] Financial Performance - Revenue for Defeng Technology was approximately 313 million RMB, 442 million RMB, and 525 million RMB for the fiscal years 2022, 2023, and 2024, respectively, showing a revenue growth of about 67% over three years [1] - The company recorded continuous losses during the same period, with losses of -165 million RMB, -297 million RMB, and -228 million RMB, totaling nearly 700 million RMB [1] - Gross margin improved from 22% in FY2022 to 26% in the first six months of 2025, indicating gradual improvement in profitability [1] Business Positioning - Defeng Technology focuses on providing AIoT production optimization software solutions aimed at enhancing energy efficiency, operational excellence, safety production, and sustainable development for China's energy, manufacturing, and mixed industries [1] - The company has completed over 600 projects and serves more than 200 clients, primarily in the electricity and utilities, oil and gas, and tobacco sectors [1] Market Position - According to Frost & Sullivan, Defeng Technology is the fifth largest independent AIoT service provider in China by revenue for FY2024, with a market share of approximately 1.8% [2] - In the energy sector, the company ranks third with a market share of 9.9%, showcasing its competitive advantage in this vertical [2] Technology and Solutions - The company's technology is supported by its self-developed integrated Delt@AIoT platform, which enables rapid development and large-scale deployment of AIoT applications [2] - The application suite focuses on three main areas: energy management, health safety environment quality, and smart manufacturing [2] Challenges - Defeng Technology has faced negative operating cash flow, with net cash used in operating activities of -172.7 million RMB, -192.9 million RMB, and -64.2 million RMB for FY2022 to FY2024 [2] - The company also faces credit risk from delayed customer payments, with trade receivables and notes receivable amounting to approximately 214.1 million RMB as of June 30, 2025 [2] Industry Outlook - The AIoT market in China is rapidly growing, with market size increasing from approximately 54.1 billion RMB in 2020 to an estimated 111.9 billion RMB in 2024, and projected to reach about 220.9 billion RMB by 2029 [3] - This growth is driven by policy support, urgent demand for digital transformation in manufacturing, and the widespread application of 5G and AI technologies [3] Shareholder Structure - As of the last feasible date, the founder Wang Qingjie controls approximately 44.4% of the voting rights through direct holdings and controlled incentive platforms [3] - The shareholder list includes notable institutions such as Yunzhou Venture Capital, Innovation Works, and others, providing financial and resource support for the company's development [3] Future Prospects - Defeng Technology has secured approximately 44 new contracts post-June 30, 2025, expecting to recognize revenue of about 100 million RMB in FY2026 [3] - The upcoming IPO in Hong Kong is seen as a critical step for the company to leverage capital to navigate the industrial internet wave while addressing profitability and cash flow challenges [3]

Core Viewpoint - Defeng Technology is an AI-enabled Industrial Internet of Things (AIoT) software solution developer focused on enhancing energy efficiency, operational excellence, safety, and sustainability in China's energy, manufacturing, and mixed industries [2][3]. Company Overview - Defeng Technology has completed over 600 projects, primarily serving state-owned enterprises in China, with around 200 clients, including major players in the electricity, public utilities, oil and gas, and tobacco industries [2]. - According to a Frost & Sullivan report, the company is the fifth largest independent AIoT service provider in China by revenue for the fiscal year 2024, holding a market share of approximately 1.8%. In the energy sector, it ranks third with a market share of about 9.9% [2]. Product Offerings - The company has developed an integrated Delt@AIoT platform that enables rapid development and large-scale deployment of AIoT applications. This platform includes proprietary software, systems, and solutions embedded with relevant connected devices [2]. - The application suite focuses on three main areas: - **Energy Management**: The Delt@EM system monitors and analyzes real-time energy consumption to reduce costs and enhance sustainability [3]. - **Health, Safety, Environment, and Quality (HSEQ)**: The Delt@HSEQ system conducts real-time monitoring and hazard detection in industrial settings to prevent accidents and ensure regulatory compliance [3]. - **Smart Manufacturing**: The Delt@MOM system optimizes production processes from planning to supply chain management, improving efficiency and reducing costs [3]. Financial Performance - Revenue for Defeng Technology in the fiscal years 2022, 2023, 2024, and the first six months of 2025 was approximately CNY 313 million, CNY 442 million, CNY 525 million, and CNY 159 million respectively [4]. - The company reported losses of CNY 165 million, CNY 297 million, CNY 228 million, and CNY 40 million for the same periods [4]. - Gross profit margins for the fiscal years 2022, 2023, 2024, and the first six months of 2025 were 22%, 23.8%, 24.9%, and 26% respectively [6]. Industry Overview - China's IIoT market has rapidly expanded, with its market size growing from approximately CNY 9 trillion in 2020 to an estimated CNY 14 trillion by 2024, and projected to reach around CNY 20 trillion by 2029 [8]. - The AI penetration rate in the IIoT sector is expected to rise from about 6.1% in 2020 to approximately 11.0% by 2029, indicating a significant increase in AI applications across various industrial processes [8]. - The AIoT market in China has also seen substantial growth, expanding from approximately CNY 54.1 billion in 2020 to an estimated CNY 111.9 billion by 2024, with projections of reaching around CNY 220.9 billion by 2029 [12]. Market Applications - AIoT solutions are expected to be widely applied in key sectors such as energy, petrochemicals, automotive, engineering machinery, mining, tobacco, mold manufacturing, and equipment manufacturing [16]. - The market for HSEQ solutions is projected to grow from approximately CNY 500 million in 2020 to about CNY 3.1 billion by 2024, and further to around CNY 8.6 billion by 2029 [16]. - The energy management market is anticipated to increase from approximately CNY 6.3 billion in 2020 to CNY 14.5 billion by 2024, and to about CNY 32.7 billion by 2029 [17]. - The smart manufacturing market is expected to grow from approximately CNY 38.3 billion in 2020 to CNY 73.9 billion by 2024, reaching around CNY 146 billion by 2029 [17].