Core Viewpoint - Shanghai Sunmi Technology Group Co., Ltd. is preparing for an IPO on the Hong Kong Stock Exchange, marking a significant moment in the commercial IoT sector amid fierce competition in the food delivery market [2][3]. Company Background - Lin Zhe, a 50-year-old entrepreneur from Chaoshan, started his career as a vocational school graduate and has transformed Sunmi Technology into a global leader in Android POS solutions [2][4]. - The company was founded in 2016 after Lin Zhe pivoted from an initial food delivery platform to focus on providing smart hardware solutions for merchants [5][9]. Business Strategy - Sunmi Technology shifted its strategy during the intense competition in the food delivery market, opting to empower merchants with efficient hardware solutions rather than competing in consumer subsidies [7][8]. - The company has developed a comprehensive ecosystem that integrates order management, printing, and kitchen coordination, significantly enhancing merchant efficiency [9]. Market Position - By 2024, Sunmi Technology is projected to be the largest provider of Android-based commercial IoT solutions globally, with its services utilized by over 70% of the top 50 food and beverage companies worldwide [10][11]. - The company has established partnerships with major players like Xiaomi, Meituan, and Ant Group, enhancing its market presence and credibility [10][14]. Financial Performance - Sunmi Technology's revenue for 2022, 2023, and 2024 was approximately 3.404 billion, 3.071 billion, and 3.456 billion respectively, indicating a decline in 2023 but a recovery in 2024 [11]. - The company has maintained a high dependency on hardware sales, with 99% of its revenue coming from smart device sales, raising concerns about its business model's sustainability [11][15]. IPO Plans - After withdrawing its A-share listing application in 2022, Sunmi Technology is now targeting the Hong Kong market, which may offer a more favorable valuation environment [12][13]. - The company aims to leverage its strong market position and backing from major investors to enhance its international profile and financing capabilities [14]. Challenges Ahead - Sunmi Technology faces challenges such as a single business model heavily reliant on hardware sales, which limits growth potential and exposes it to market fluctuations [15]. - The company's profitability is under pressure, with gross margins consistently below industry averages, raising questions about its competitive edge in the tech sector [15].