In the journey of transitioning from a "major panel producer" to a "leading panel power," achieving self-sufficiency in key upstream materials remains a critical challenge that must be overcome. Against this backdrop, Beijing Xiahe Technology Co., Ltd. (referred to as "Xiahe Technology") is knocking on the door of the STAR Market with its OLED organic light-emitting materials.

This company, which claims to have "broken the long-term monopoly of the American firm UDC," has indeed delivered an impressive report card: a compound annual revenue growth rate exceeding 120% over three years, core products achieving import substitution, and entry into the supply chains of leading panel manufacturers like BOE and Tianma.

However, looking beyond the光环 of "domestic substitution" and scrutinizing its draft prospectus reveals a series of underlying concerns. Excessive customer concentration, risks to sustainable operations, and the hidden dangers behind "revenue growth without corresponding profit growth" all affect the quality of this prospective listed company.

Turning a Profit Only in 2025

Xiahe Technology's prospectus is, first and foremost, a story of "breaking through." OLED organic terminal materials, particularly dopant materials for the light-emitting layer, once formed a high wall dominated by the American company UDC. The emergence of Xiahe Technology has changed this landscape.

According to the prospectus, the company successfully mass-produced China's first independently developed phosphorescent green dopant material (GD) in 2020 and phosphorescent red dopant material (RD) in 2021, followed by the mass production of P-type conductive dopant material (PD) in 2023. These three product categories are the core "lifeblood" of OLED panel manufacturing.

Currently, the company has become the world's sole supplier capable of the sustained and stable mass production of all three material types. This represents an exceptionally high technological barrier that directly determines a panel's luminous efficiency, lifespan, and color performance.

This technological breakthrough has directly translated into explosive performance.

According to the prospectus, during the reporting period (2023-2025), Xiahe Technology's operating revenue soared from 74.5777 million yuan to 365 million yuan, achieving a compound annual growth rate as high as 121.46%. In 2025, the company turned a profit, with net profit attributable to the parent company reaching 97.1265 million yuan.

Despite the surge in revenue, concerns exist regarding the quality of Xiahe Technology's profits.

The prospectus shows that while the company's 2025 revenue was nearly five times that of 2023, the scale of net profit exhibits extreme volatility compared to the absolute value of the 2023 loss. Notably, the company's current profitability heavily relies on high-margin phosphorescent materials.

The company incurred a loss of over 80 million yuan in 2023, yet turned a profit of nearly 100 million yuan by 2025. This rollercoaster-like performance fluctuation reflects the company's weak risk resistance. The panel industry is strongly cyclical; if downstream demand slows slightly in 2026, the company could face a significant risk of performance decline.

Simultaneously, as capacity expands and market competition intensifies (such as patent pressure or price wars from UDC), whether these high margins can be sustained remains uncertain. Furthermore, the company incurred substantial share-based payment expenses in 2025. Excluding these non-cash expenses, the true level of its core profitability still requires a question mark.

The company's operating cash flow turned positive in 2025 but was negative for a long period prior. As business scale expands, rising inventory and accounts receivable will tie up significant capital. Financial statements indicate the company's inventory book value was nearly 120 million yuan in 2025, placing extremely high demands on its working capital management.

Significant Reliance on Major Clients and Underlying Risks

Although the "domestic substitution" narrative is compelling, details in the financial data reveal that Xiahe Technology is experiencing intense "growing pains." Behind the high growth lies unsettling fragility.

During the reporting period, sales revenue from Xiahe Technology's top five clients consistently accounted for over 97% of its total. This extreme level of dependence is a double-edged sword.

Xiahe Technology's client list is impressive: domestic panel giants such as BOE, Tianma, Visionox, and Everdisplay are all included. In 2025, sales to the top five clients accounted for a high 97.49%, which also serves as evidence that its products have gained recognition from industry leaders, forming the foundation for the domestic substitution logic.

On one hand, securing major clients guarantees sales volume. On the other hand, it severely weakens the company's bargaining power. Within the industry chain, panel manufacturing is a capital-intensive, highly concentrated sector where upstream material suppliers are typically in a weaker position. Should downstream giants adjust procurement strategies, lower prices, or reduce orders due to their own overcapacity, Xiahe Technology's performance could change dramatically overnight.

This deep, "prosper and suffer together" binding represents the greatest source of uncertainty in its operations.

Xiahe Technology emphasizes its R&D capabilities, holding 330 invention patents. However, examining the composition of its R&D personnel reveals that while the proportion with master's degrees or higher is high, the number of core technical personnel is relatively small, and the company heavily relies on founder Xia Chuanjun (a former UDC executive) and his team.

The company can be described as a technology-driven firm with a strong "rule-by-people" characteristic, facing two major risks. First is the loss of core talent. Should competitors offer high salaries or internal incentives prove insufficient, the stability of the technical team could be tested. Second is the risk of patent litigation. Although the company claims to possess independent intellectual property, the OLED field's patent network is complex and intricate. Patent challenges potentially launched at any time by giants like UDC remain a Sword of Damocles hanging overhead.

Although Xiahe Technology has broken the monopoly, it still faces a significant gap in market share compared to giants like UDC and Novaled. UDC possesses a strong patent moat and substantial financial resources. Xiahe Technology currently primarily relies on "price advantages" and "local service" to enter the market. If UDC adopts a price reduction strategy, Xiahe Technology's survival space could be rapidly squeezed.

Simultaneously, the company's revenue is highly dependent on three product categories: GD, RD, and PD. While these are core products, it also implies poor risk resistance. Should the OLED technology roadmap undergo transformation, such as printed OLED fully replacing evaporated OLED, or if a technological substitute emerges for a particular color material, the company could face the risk of product obsolescence.

Furthermore, the company also needs to address challenges in internal control management.

During the reporting period, the company engaged in numerous related-party transactions and had a complex history of equity holdings through nominees, such as the situation involving Zhongjin Investment. Although these have been rectified, it reflects that the company's governance structure was not sufficiently standardized during its early development. As a prospective public company, establishing a more transparent and standardized internal control system is a key focus for regulators.

Xiahe Technology's IPO application for the STAR Market undoubtedly represents a significant breakthrough for China's OLED materials industry. It demonstrates that domestic enterprises have the capability to break the technological blockade of international giants and secure a share at the top of the value chain.

However, for investors, Xiahe Technology currently exhibits characteristics of "high risk, high volatility." Its core investment logic hinges on whether the dividends of domestic substitution can outweigh the risks associated with its operational management and industry cycles.

While applauding this "pride of domestic industry," the market should also calmly examine the underlying issues. For Xiahe Technology to achieve stable and long-term progress in the capital market, it cannot rely solely on "market trends" and "sentiment." It must more urgently address deeper issues such as excessive customer concentration, fortifying its technology moat, and standardizing internal governance.

A company can only be considered a truly mature "unicorn" when it can operate independently of any single client and confidently navigate competition from international giants.