After three attempts to list in Hong Kong, BAIGE DIGITAL, which carries the concept of being the "first AI scenario-based insurance technology stock," is set to officially debut on the main board of the Hong Kong Stock Exchange on June 29.

Announcements reveal that the company's global offering consists of 33.3444 million H shares, with the Hong Kong public offering portion accounting for 10% at 3.3346 million shares. The final offer price has been set at HK$15.60 per share, with total proceeds from the global offering estimated at approximately HK$520 million. After deducting estimated listing expenses, the net proceeds are about HK$466 million. The Hong Kong public offering received 44,599 valid applications, representing an oversubscription of 242.05 times. Despite exceeding the 100-times threshold, the company did not trigger the clawback mechanism, keeping the public offering portion at 10%. The international offering was 2.44 times subscribed with 95 placees.

The grey market trading on June 26 showed BAIGE DIGITAL (02672.HK) closing at HK$59.70, a surge of 282.69% from the offer price of HK$15.60. It reached an intraday high of HK$70.05, with a paper profit of HK$8,820 per board lot. However, the IPO only attracted two cornerstone investors, who subscribed for a combined amount of HK$20 million, representing about 3.3% to 3.8% of the global offering.

Strong Demand Masks Fundamental Questions

The enthusiastic subscription and grey market gains, however, cannot fully obscure the fundamental questions surrounding BAIGE DIGITAL. Over the past few years, the company's revenue has grown rapidly, increasing from 405 million yuan in 2022 to 1.227 billion yuan in 2025, a cumulative growth of over 200%. Concurrently, the company remains unprofitable, accumulating losses exceeding 100 million yuan over the four-year period. While it tells a new story of "scenario-based insurance + AI," its financial statements still reflect the characteristics of a high-investment, low-margin intermediary platform reliant on commissions and distribution.

This is precisely the core focus after BAIGE DIGITAL's listing: Can it evolve from a more efficient insurance intermediary into a genuine insurance technology company with technological barriers and profit leverage? The capital market may pay for the scarcity of the "first AI scenario-based insurance stock," but it will ultimately ask the same question: Can revenue growth translate into profits, and can the technology narrative turn into cash flow?

Revenue Growth Without Profit

From the prospectus, BAIGE DIGITAL's revenue has grown rapidly in recent years, but profitability has not improved correspondingly.

From 2022 to 2025, its revenue grew from 405 million yuan to 1.227 billion yuan, a cumulative increase exceeding 200%. Looking at the revenue curve alone, the company is undoubtedly in a phase of rapid expansion. However, scale growth has not brought profit improvement. During the same period, the company's losses widened from 25.075 million yuan to 46.669 million yuan. Although losses narrowed briefly in 2023, they expanded again in 2024 and 2025, indicating the company remains in a "growth without profit" scaling phase and has not achieved the transition from scale expansion to stable profitability.

Gross margin corroborates this point. From 2022 to 2025, the company's gross margins were 8.27%, 7.89%, 9.10%, and 8.38%, respectively, consistently hovering around 8%, which is relatively low compared to other listed insurance intermediaries.

Commissions Drive Revenue, Technology Not Yet a Profit Engine

To understand why BAIGE DIGITAL is experiencing "growth without profit," the key is to examine where its money comes from.

According to the prospectus, its revenue primarily comes from three segments: insurance transaction services (commissions), precision marketing & digital solutions, and TPA services.

From the revenue structure, the core source has consistently been insurance transaction services, essentially commissions and related service income from insurance product distribution. From 2022 to 2024, this portion's contribution increased from 76.9% to 90.28%, before falling back to 66.92% in 2025, but it remains the largest revenue source.

During the same period, the share of precision marketing & digital solutions grew from 17.53% in 2023 to 32.46% in 2025, becoming the second-largest revenue source. TPA services consistently accounted for around 1%, dropping to 0.3% and 0.62% in 2024 and 2025, respectively.

Despite emphasizing "technology empowerment" and "digital risk management" in its prospectus, its revenue foundation still heavily relies on insurance distribution and related services. Even with noticeable growth in precision marketing & digital solutions revenue in 2025, its essence remains providing supporting services for insurance transactions and customer conversion, rather than purely independent technology output separate from insurance distribution.

In other words, while BAIGE DIGITAL's business structure appears more complex than traditional insurance intermediaries, its monetization logic has not fundamentally departed from being an "intermediary platform."

This is not to say the company lacks technological capabilities. On the contrary, its prospectus discloses a self-developed, full-process SaaS application system called "BAIGE e-Insurance," covering intelligent underwriting, policy management, claims processing, and more. In 2024, it initiated a risk management digital transformation for large models, developing six MaaS business models including "Ark" risk warning and "Femtosecond" dynamic pricing. The prospectus states the company can process over 50 million policies daily.

The issue is that these technologies have not yet formed an independent, verifiable commercial capability. Placing these capabilities alongside the revenue structure highlights this contradiction. In 2025, insurance transaction services contributed 66.92% of revenue, and precision marketing & digital solutions contributed 32.46%, together accounting for nearly 100%. Revenue from technology output truly independent of the insurance distribution logic accounted for less than 1%.

High Customer Concentration and Cash Flow Pressure

Beyond profitability, high customer concentration and cash flow are also noteworthy.

From 2022 to 2025, the revenue contribution from BAIGE DIGITAL's top five customers consistently exceeded 55%, reaching 77.2% in 2024, indicating high concentration. The largest customer alone contributed 38.3% of revenue in 2024, showing significant reliance on a single client.

This means the company's business expansion heavily depends on top clients and major scenario partners. While this model can rapidly amplify revenue in the short term, it weakens bargaining power and business stability. Any adjustment in cooperation terms, fee reductions, or partner switching by a major client could significantly impact the company's revenue and profits.

Cash flow pressure is also notable. As of the end of 2025, BAIGE DIGITAL held cash and equivalents of 94.03 million yuan but recorded net liabilities of 47.83 million yuan and net current liabilities of 50.06 million yuan. Trade receivables stood at 95.5 million yuan, while payables were approximately 161 million yuan, with average trade receivable days of 28.8 days.

Although operating cash flow turned positive in 2025 with a net inflow of 20.14 million yuan, reversing the net outflow of 7.03 million yuan in 2024, overall cash flow stability still needs strengthening. For a company yet to achieve stable profitability, the combination of high customer concentration, significant receivables, and limited cash reserves means operational resilience relies more on external financing and continuous expansion capability.

Industry-Wide Challenges for Insurance Tech Intermediaries

The challenges faced by BAIGE DIGITAL are not unique but common among a class of insurance technology intermediary companies.

First, the business model is attached to, and thus constrained by, external scenarios. Growth often relies on continuous binding with insurers, platform partners, and channels rather than a proprietary ecosystem.

Second, scale can be expanded, but profits may not grow correspondingly. The unit economic model often fails to improve with scale expansion due to limited commission rates, policy-driven compression of intermediary margins, high channel and referral costs, and ongoing R&D and compliance investments.

Third, technological capabilities exist but have not formed significant barriers or independent profit centers. Technology often serves as an efficiency tool within the distribution chain rather than reshaping the entire insurance value chain or creating a high-margin, standalone business.

Fourth, the recent wave of IPOs reflects pressure from both capital and regulation. Policies like "报行合一" (reporting and implementation integration) continue to squeeze commission space, while primary market funding has cooled. Listing provides a financing channel but also subjects the business model and profitability to intense public market scrutiny, as seen in the weak post-IPO performance of several peers.

BAIGE DIGITAL now stands at this crossroads. It faces not just the question of "becoming the first scenario-based insurance stock" but, more importantly, whether it can find a genuine path to profitability after listing.