On November 3, 2025, Guoxia Technology Co., Ltd. (hereinafter referred to as "Guoxia Tech") submitted its main board IPO application to the Hong Kong Stock Exchange for the second time this year. As a China-based renewable energy solutions provider driven by platform technology and AI in the energy storage sector, Guoxia Tech achieved revenue growth from RMB 142 million in 2022 to RMB 1.026 billion in 2024, with a compound annual growth rate of 168.9%.
However, behind these impressive growth figures, the company's gross margin plummeted from 25.1% to 12.5%, nearly halving. More concerning is its valuation surge—from approximately RMB 400 million in March 2023 to RMB 6 billion in April 2025, a 14-fold increase in just two years—raising regulatory concerns over potential improper benefit transfers.
**Valuation Puzzle: Last-Minute Investments and Regulatory Scrutiny** Guoxia Tech’s pre-IPO valuation spike has drawn significant market attention. While its valuation stood at around RMB 400 million in March 2023, it skyrocketed to RMB 6 billion by April 2025.
This 14-fold surge prompted regulators to demand explanations. In July 2025, the China Securities Regulatory Commission (CSRC) required Guoxia Tech to justify the pricing rationality of new shareholders added within the past 12 months, reasons for price discrepancies, and whether improper benefit transfers occurred.
Notably, two institutions—Kaibo Hongcheng and Shenzhen Ninggan—made last-minute investments. Shenzhen Ninggan injected RMB 30 million in April 2025 for just a 0.5% stake, pushing the valuation to RMB 6 billion. In contrast, Kaibo Hongcheng had acquired a 4.29% stake for RMB 70 million the previous month, implying a valuation of RMB 1.632 billion. This suggests a 2.75x valuation jump in under a month.
**Profitability Woes: Halved Gross Margin and Plummeting Net Profit Margin** Guoxia Tech faces the paradox of rising revenue but shrinking profits. From 2022 to H1 2025, revenue grew from RMB 142 million to RMB 691 million, while gross margin collapsed from 25.1% to 12.5%. Net profit margin nosedived from 17.1% to below 1%, hitting just 0.8% in H1 2025.
The margin erosion stems from two factors: fierce industry price wars (average energy storage system bids dropped 60% from RMB 1.24/Wh in 2023 to RMB 0.5/Wh in 2024) and a shift from high-margin European residential storage (72.1% of 2022 revenue at 25.1% gross margin) to low-margin domestic large-scale storage (80% of 2024 revenue at 10.2% gross margin, down from 31.4%).
Guoxia Tech’s touted "AI + storage" edge has yet to translate into profitability. Its 2024 R&D spending accounted for just 3.08% of revenue, lagging behind tech-focused peers.
**Financial Risks: Tight Cash Flow and Soaring Receivables** The company’s cash flow is alarming. From 2022 to H1 2025, operating cash flow swung from net outflows of RMB -30.32 million and RMB -72.91 million to a brief RMB 3.73 million inflow in 2024, before plunging to RMB -205 million in H1 2025.
Meanwhile, trade receivables and bills ballooned from RMB 42 million in 2022 to RMB 952 million in H1 2025, representing 137.74% of revenue, with payment cycles stretching from 56.2 days to 198.0 days.
As of June 2025, Guoxia Tech held just RMB 46.687 million in cash against RMB 331 million in short-term debt, yielding a precarious cash-to-debt ratio of 0.14.
Further red flags include a RMB 57.75 million non-business loan to a related party in late 2024—equivalent to a quarter of its cash flow—potentially violating HKEX rules as "fund occupation."
**Business and Governance Risks: Customer Concentration and Murky Control** Guoxia Tech relies heavily on major clients. Though its top-five customer revenue share fell from 98.9% in 2022 to 77.7% in H1 2025, concentration remains high.
In 2023, its gross margin from top client
Governance concerns persist as controlling shareholders Feng Lizheng, Liu Ziye, and Zhang Xi (collectively holding 58.54%) lack a joint action agreement, risking decision-making conflicts or control disputes. HKEX’s stringent disclosure requirements may complicate approval without clarity on this front.
**Outlook and Challenges** The global energy storage market is poised for expansion, with cumulative installed capacity for renewable storage systems projected to grow over 160% by 2030. Yet, amid tightening HKEX scrutiny—2024’s sub-20% approval rate for new energy IPOs—Guoxia Tech’s listing hinges on justifying its valuation, demonstrating profit recovery, and improving cash flow management.
Investors should monitor CSRC’s findings on the valuation surge and track core metrics like margin stabilization and cash flow health.
*(Note: This article incorporates AI-generated content and does not constitute investment advice. Market risks apply.)*