Hangzhou Relian Group Co., Ltd. (Relian Group) has submitted a second listing application to the Hong Kong Stock Exchange, with CICC serving as the sole sponsor. This follows the company's first unsuccessful attempt in February of this year, where the filing expired. As a commodity industrial service provider controlled by the Hangzhou-based state-owned enterprise Hangshen Group, Relian Group operates on a massive scale with revenue reaching hundreds of billions of yuan. However, the company is also characterized by razor-thin profit margins, and in recent years, it has seen continuous net cash outflows from operating activities and a rapidly rising inventory scale. As it makes a second bid for listing, the market is closely scrutinizing its earnings quality and liquidity position.

Revenue surpasses 270 billion yuan, but net profit margin remains below 1%. Founded in 2001 and headquartered in Hangzhou, Relian Group is a commodity industrial service provider and trader, sourcing and selling over 294 types of physical goods, including ferrous metals and raw materials, chemicals, and non-ferrous metals. The company conducts trade activities in more than 80 countries and regions, with subsidiaries and offices established in 17. In recent years, its global expansion has accelerated notably, with the establishment of subsidiaries in Saudi Arabia, Thailand, the UAE, Ivory Coast, Tanzania, and several other countries and regions between September 2024 and July 2026. According to Frost & Sullivan data, based on trading volume and sales revenue in 2025, Relian Group ranks as the fifth-largest commodity industrial service provider and trader in China. In specific segments, it is the fourth-largest steel industry service provider (with a 2.4% market share), the second-largest steel exporter (with a 5.1% market share), and the second-largest iron ore service provider (with a 2.9% market share).

In terms of revenue scale, Relian Group generated 252.13 billion yuan, 270.63 billion yuan, and 270.48 billion yuan in 2023, 2024, and 2025, respectively. For the first five months of 2026, the company posted revenue of 110.49 billion yuan. Looking at the revenue composition for 2025, ferrous metals and raw materials were the main driver, generating 147.83 billion yuan, or 54.7% of the total. The chemicals segment contributed 101.31 billion yuan, accounting for 37.4%, while non-ferrous metals brought in 15.65 billion yuan, or 5.8%. Due to the inherent characteristics of the commodity trading industry, Relian Group's profitability lags behind its revenue scale. The company's net profit stood at 1.032 billion yuan, 1.431 billion yuan, and 1.435 billion yuan in 2023, 2024, and 2025, respectively. For the first five months of 2026, net profit was 554 million yuan. Furthermore, the company's net profit margin has been persistently below 1%, standing at 0.4%, 0.5%, and 0.6% from 2023 to 2025, highlighting the "high volume, low margin" nature of the commodity trading business.

Additionally, Relian Group's gross profit margin declined from 0.9% in 2023 to 0.7% in 2024, further falling to 0.6% in 2025. In the first five months of 2026, the gross profit margin rose sharply to 1.9%, marking a significant improvement year-on-year. The company attributes this to performance enhancements in two major categories: the gross profit margin for ferrous metals and raw materials increased from 0.5% to 1.4%, and the chemicals segment swung from a gross loss rate of 0.4% to a gross profit margin of 2.8%. Relian Group also faces certain foreign exchange fluctuation risks. The company recorded net foreign exchange gains of 44 million yuan and 3.2 million yuan in 2023 and 2024, respectively, but this turned into a net loss of 170 million yuan in 2025. For the first five months of 2026, the net foreign exchange loss amounted to 150 million yuan. In terms of return on equity, the figures were 13.4%, 15.9%, and 16.4% for 2023, 2024, and 2025, respectively, indicating a steady improvement in shareholder returns.

Cash flow remains persistently negative, and inventory is on the rise. Notably, Relian Group's operating cash flow turned from positive to negative starting in 2024. The net cash flow from operating activities was 118 million yuan in 2023, but it shifted to a net outflow of 1.876 billion yuan in 2024, with the net outflow further expanding to 4.822 billion yuan in 2025. In the first five months of 2026, due to an increase in inventory of 3.414 billion yuan and a rise in prepayments and other receivables of 2.893 billion yuan, the company's operating cash flow net outflow was 2.268 billion yuan. The company has acknowledged that the pressure on operating cash flow is primarily related to the occupation of working capital. In recent years, inventory levels have increased significantly, growing from 11.441 billion yuan at the end of 2023 to 16.149 billion yuan at the end of 2024, and further climbing to 18.262 billion yuan by the end of 2025. As of June 12, 2026, the inventory scale had grown to 23.198 billion yuan. The growth rate of inventory far exceeds that of revenue, and commodity prices are frequently volatile due to factors such as macroeconomic conditions and geopolitical events. A sharp decline in prices could lead to inventory impairment, eroding profits.

To address liquidity pressures, the company's reliance on external financing is also increasing. Net cash flow from financing activities was 5.305 billion yuan in 2025, and this figure expanded further in the first five months of 2026. Regarding overseas expansion, the company's revenue from international markets reached 43.85 billion yuan in 2025, but its share of total revenue has consistently failed to break through 20%—standing at 17.6%, 11.8%, 16.2%, and 14.7% for 2023, 2024, 2025, and the first five months of 2026, respectively.

Commodity price volatility poses a challenge. In June 2026, the China Securities Regulatory Commission (CSRC) issued a feedback letter regarding Relian Group's overseas listing filing, requesting the company to provide supplementary explanations on several matters: first, the pricing basis for historical capital increases and equity transfers, whether capital contributions were fully paid, and whether there were any instances of failure to fulfill capital contribution obligations, capital withdrawal, or defects in the method of capital contribution; second, the progress of state-owned shareholders in obtaining state-owned equity identification; third, whether the company and its subsidiaries operate in "high energy consumption" or "high emission" industries; fourth, the status of related-party transactions and the company's independence in terms of personnel, business, assets, and finance; and fifth, whether the shares of shareholders intending to participate in the "full circulation" program are subject to any pledges, freezes, or other rights defects.

Furthermore, the prospectus discloses that, in the past, some customers have made payments through the accounts of third-party payers who are not contractual counterparties. The company acknowledges the risk that such third-party payers may request refunds in the absence of a contractual liability. From an industry environment perspective, Hangzhou has a deep-rooted foundation in commodity trading, with several Fortune Global 500 companies based in the city involved in this business. A trillion-yuan industry matrix has been formed by four leading enterprises: Wuchan Zhongda, Relian Group, Hanggang Steel Trading, and Zheshang Zhongtuo. The transaction volume of commodities in the Asian market grew from 26.3 billion tons in 2021 to 27.7 billion tons in 2025, with a compound annual growth rate of 1.3%, indicating a generally stable growth trend. Additionally, commodity price fluctuations, inventory impairment risks, exchange losses, and intensifying industry competition remain challenges for Relian Group. As it expands its business scale, improving cash flow, enhancing earnings quality, and increasing governance transparency are persistent issues the company must address both before and after its listing.