An overlooked contender from the fierce unmanned retail battleground, Feng e Zu Shi, is finally knocking on the capital market's door.

The concept of unmanned shelves and unmanned convenience stores surged in 2017. Giants like Alibaba, JD.com, and Wahaha rushed to enter the fray, while newer players like BingoBox, Xingbianli, and Guoxiaomei raised billions within six months of founding, rapidly advancing to acquisition and merger phases. The intensity of competition rivaled the shared bicycle wars of 2016. According to incomplete statistics, among 138 newly registered unmanned retail enterprises that year, 57 secured funding totaling approximately 4.847 billion yuan, with nearly 1.7 billion yuan raised in the fourth quarter alone.

However, the journey from frenzied expansion to a quiet retreat took less than a year for the unmanned retail sector. High rents, high inventory loss, high labor costs, and low gross margins led the unit economics into a dead end. Star companies successively fell into the difficult positions of losses and layoffs, and the unmanned retail concept faded. The remaining players at the table were essentially Feng e Zu Shi, backed by SF Express, and the established vending machine operator Ubox Online Ltd.

Recently, Feng e Zu Shi's operator, Shenzhen Fengyi Technology Group Co., Ltd. (referred to as Fengyi Technology), formally submitted its listing application to the Hong Kong Stock Exchange, aiming for a Main Board IPO. ABCI is acting as the sole sponsor, with CICC and CMBI serving as joint global coordinators.

According to the prospectus, from 2023 to 2025, Fengyi Technology achieved total revenues of 1.244 billion yuan, 1.652 billion yuan, and 2.009 billion yuan respectively, with gross profit margins consistently above 50.0%. Adjusted net profits were 101 million yuan, 77 million yuan, and 119 million yuan, and net cash flow from operating activities remained positive for three consecutive years.

This former 'survivor' appears to have successfully broken the industry's 'curse' of losses. However, a singular business structure and declining per-unit sales continue to limit its future growth potential. Ubox Online Ltd, which rushed to list as the 'first unmanned retail stock', has seen its share price plummet since the lock-up expiry, with its latest market capitalization nearly 90% below its peak. Given the similar business models, will investors view Fengyi Technology differently?

Over-Reliance on Product Sales and Declining Unit Performance

Despite repeatedly emphasizing in its prospectus that it is an AI-driven retail enterprise, Fengyi Technology's business model is essentially no different from traditional vending machines: purchasing beverages, food, and other goods from suppliers and selling them to consumers through retail cabinets.

From 2023 to 2025, sales from smart retail cabinets contributed 99.3%, 99.4%, and 98.8% of total revenue, respectively. Although revenue from advertising and other services increased from 0.7% to 1.2%, its impact on overall performance is negligible. By product category, sales of beverages like drinking water, tea, and coffee were the main revenue drivers, accounting for 63.4%, 64.9%, and 66.9% of total revenue during the reporting period, while snacks and instant food sales each remained around 15.0%.

This shows Fengyi Technology has almost no 'second growth curve' and is highly dependent on the beverage category. Any shift in consumer habits could directly impact its core business. However, benefiting from economies of scale, the growth rate of its procurement costs from beverage and food suppliers decreased from 28.4% to 17.0% between 2023 and 2025, lower than the growth rate of product sales revenue. The cost of sales as a percentage of total revenue was compressed from 47.6% to 44.2%.

Unlike the prevalent franchise or partnership models in the industry, Fengyi Technology adopts a direct operation model, covering the entire chain from point development and equipment deployment/maintenance to daily restocking. Initially leveraging SF Express's logistics network for delivery and utilizing couriers for restocking and repairs significantly reduced operating costs while accumulating vast data, laying the foundation for later improving decision-making efficiency through algorithms. As of December 31, 2025, Fengyi Technology had 184,000 operational points, managed by a team of just over 1,400 operators, averaging over 115 cabinets per operator, a 22.3% increase from 2023.

The key to profitability despite heavy asset investment lies in its differentiated point strategy. During the reporting period, over 70% of its points were located in second-tier cities, with the proportion in third-tier and lower cities growing from 2.4% to 8.2%. In terms of location types, the company avoided high-rent areas with many alternatives like convenience stores and ready-to-drink chains, such as transport hubs and tourist/commercial districts. Points in office buildings and factory workshops have long accounted for about half of the total. Adding commercial venues like hotels, salons, auto 4S shops, and logistics warehouses, these three types of 'light-scenario' points together constitute approximately 85.0%.

The prospectus shows that Fengyi Technology's point operation, point development, warehousing/logistics, and depreciation/amortization of smart retail cabinets are all classified under selling and marketing expenses. From 2023 to 2025, these costs accounted for 47.1%, 45.3%, and 47.8% of total revenue, respectively. Among these, point and labor expenses to support ongoing cabinet operations constituted over 40%, while point development, depreciation/amortization, and warehousing/logistics together accounted for about 30%-35%. These four cost items represented 68.9%, 64.2%, and 66.7% of gross profit during the period.

According to a joint report by Frost & Sullivan and LeadLeo, the total sales of China's unmanned retail market in 2025 were approximately 53.3 billion yuan, with vending machines holding a dominant 97.3% share. Even so, this represents only about 1.4% of the total offline FMCG market. Although the report optimistically projects this could reach 57.6%, it estimates a 50-year timeframe is required.

In other words, Fengyi Technology's current market is not particularly broad, with numerous alternative competitors like convenience stores and instant retail. Its business scale and growth are tied to point expansion. A simple calculation based on year-end points and gross merchandise volume shows a clear decline in the company's average daily sales per cabinet, dropping from 37.91 yuan in 2023 to 35.34 yuan in 2025, a cumulative decrease of about 6.8%, with a 9.1% year-on-year drop in 2025. Meanwhile, the room for further reducing variable costs like point operation, development, and warehousing/logistics is limited, with average daily operating expenses per cabinet decreasing by only 4.0% cumulatively during the period.

Backing from SF Express and SoftBank, CEO's Pre-IPO Share Transfers

At its founding in 2017, Fengyi Technology was wholly owned by SF Express's investment platform, SF Chuangxing. Key management, including COO Shan Xinning, previously served as SF Express's Deputy Director of Strategic Management; CEO Yuan Shengbiao was formerly Head of SF Express's Cross-border E-commerce Department; and Operations Management Director Zhao Yu held senior manager roles in market research and product management at SF Express.

With the introduction of an employee持股 platform in 2018, SF Chuangxing's stake decreased to 87.5% and was transferred to Mingde Holding in 2019, which is 99.9% directly owned by SF Express founder Wang Wei. Between June 2021 and June 2024, Mingde Holding gradually reduced its stake through multiple rounds of equity transfers to parties including Shan Xinning, Fengyi Technology's employee持股 platform, the Hunan provincial government-guided fund Caixin Industrial Fund, and SoftBank Asia, for a total consideration of 200 million yuan.

Notably, in June 2024, Mingde Holding transferred its entire remaining 12 million yuan in registered capital (equivalent to a 10.85% stake) to Shan Xinning for 100 million yuan, completing its exit. For this transaction, Shan Xinning personally contributed 20 million yuan, with Fengyi Technology providing an 80 million yuan loan. The agreement stipulated that if Shan Xinning repaid the loan with self-raised funds, no contractual interest was required. However, if he transferred the acquired shares to a third party, he would need to pay the company interest on the corresponding loan portion.

To repay the loan quickly, between November 2024 and December 2025, Shan Xinning transferred a total of 9.08% of equity to Yilian Chuangtou, CICC Capital, Songhe Capital, and the employee持股 platform at 8.33 yuan per share, for a total consideration of 90 million yuan. As of December 31, 2025, Shan Xinning had fully repaid the 80 million yuan loan to the company, with an additional 4.809 million yuan paid in interest.

Prior to this listing attempt, Fengyi Technology completed three financing rounds totaling 385 million yuan, with its post-money valuation rising from 800 million yuan to 1.805 billion yuan, a cumulative increase of approximately 125.6%. Its largest external investor is SoftBank Asia, holding a 26.6% stake. CICC Capital, Caixin Industrial Fund, Shenzhen Capital Group, Songhe Capital, and Yilian Chuangtou hold 8.4%, 8.8%, 5.3%, 4.1%, and 3.4% respectively.

With these six VC/PE institutions collectively holding over 56% of shares, all subject to a 12-month lock-up period, the potential pressure from concentrated selling is evident. Ubox Online Ltd serves as a cautionary tale. In November 2023, Ubox Online Ltd listed on the Hong Kong Stock Exchange at an issue price of HK$10.35 per share, surging 40.9% on its first day and briefly surpassing a market cap of HK$10 billion. However, cornerstone investors and early shareholders held a substantial 217 million shares subject to lock-up, representing about 27.9% of total shares, posing a significant overhang. When the lock-up expired a year later, selling pressure was unleashed, causing Ubox Online Ltd's share price to plummet 53.3% in a single day, wiping over HK$4.4 billion from its market value. Its performance has remained weak since, with the share price lingering in single digits.