Core Perspective: One year before IPO counseling, JAKA Robotics changed the revenue recognition policy for its core products, which is quite important for the company's A-share STAR Market IPO application, as it allows some revenue to be recorded earlier. However, JAKA Robotics has not disclosed the specific amounts "advanced" in key years such as 2021 and 2022 due to the revenue method change. Data discrepancies with customers like Green Harmonic Drive and the "acceptance" model with other robot manufacturers raise questions about whether JAKA Robotics has prematurely recognized revenue. Moreover, while the company's revenue increased significantly in 2021 and 2022, its cash collection ratio decreased, and free cash flow has been negative for years.
Recently, JAKA Robotics Co., Ltd. (hereinafter referred to as "JAKA Robotics") had its audit cancelled by the exchange on the eve of its review due to related matters requiring further verification. JAKA Robotics became the first company in 2025 to have its IPO review cancelled before the meeting, breaking Guotai Junan's 100% approval rate for IPO sponsorship projects this year.
Before announcing the review meeting, JAKA Robotics was asked by the Shanghai Stock Exchange to explain specific situations regarding revenue recognition timing changes, relaxed credit policies, and accounts receivable confirmation. Some investors believe JAKA Robotics may have changed accounting policies to prematurely recognize revenue. Through examining fragmented information hidden in obscure corners and other public information, there appear to be some questionable aspects regarding JAKA Robotics' change in revenue recognition methods on the eve of its IPO application.
Furthermore, JAKA Robotics' technology innovation attributes also raise many questions. The exchange inquired about the company's core technology independence (having deep connections with Shanghai Jiao Tong University) and advancement in both rounds of inquiries. The company's actual controller's acting-in-concert party, Shanghai Jiaorui, is a shareholding platform wholly owned by multiple Shanghai Jiao Tong University professors, holding 10.53% of JAKA Robotics' shares (third-largest shareholder), with many interest bindings between both parties. During the reporting period, the company's sales expense ratio has consistently been higher than its R&D expense ratio, raising questions about whether it is marketing-driven or research-driven.
**Revenue Recognition Method Changed Before IPO Counseling - Whether Revenue Was Prematurely Recognized Remains to Be Examined**
According to the prospectus, JAKA Robotics mainly engages in R&D, production, and sales of collaborative robot complete products, and conducts robot system integration business including integrated equipment and automated production lines. The company's collaborative robot complete products are divided into multiple standardized products including Zu series, Pro series, and C series; integrated equipment mainly includes collaborative robot workstations and composite robots; automated production line business refers to the company integrating robots, equipment units, tooling workpieces, software systems, etc. according to specific field customers' personalized needs using technology to form automated equipment combinations or automated production lines with specific functions.
JAKA Robotics was established in July 2014 and was restructured into a joint-stock company in November 2022. In December 2022, JAKA Robotics signed a listing counseling agreement with Guotai Junan, launching the IPO process.
One year before launching IPO counseling, JAKA Robotics changed the revenue recognition method for its core product collaborative robots. Before June 2021, after customers completed confirmation, they needed to issue acceptance documents regarding quantity, model, and appearance according to contract templates, and the company confirmed revenue after receiving corresponding acceptance documents.
In June 2021, JAKA Robotics gradually changed standard contract acceptance clauses to receipt clauses through consultation with customers, with customers conducting receipt confirmation regarding quantity, model, appearance, etc. according to changed contract templates.
JAKA Robotics stated that the aforementioned changes had relatively small impact on revenue recognition during the reporting period, but did not specifically disclose revenue that could be "faster" confirmed in 2021 and 2022 and corresponding profits.
From data provided in application materials, in 2021, JAKA Robotics' amount converted from acceptance confirmation to receipt method was 39.6031 million yuan (47 existing customers), accounting for 31.28% of domestic complete machine revenue that year.
In 2021, JAKA Robotics' overall revenue confirmed through receipt method was 68.1789 million yuan, accounting for 38.86% of total revenue, while in 2020, the company's revenue confirmed through receipt method was 0, surging to 68.17 million yuan in 2021.
According to information disclosed in the prospectus, JAKA Robotics selected the STAR Market's second listing standard: "Expected market value not less than RMB 1.5 billion, operating revenue not less than RMB 200 million in the most recent year, and the ratio of cumulative R&D investment in the most recent three years to cumulative operating revenue in the most recent three years not less than 15%." Meanwhile, according to technology innovation attribute evaluation standards, companies planning to list on the STAR Market should meet the condition of "operating revenue compound annual growth rate ≥25% in the most recent three years, or operating revenue amount ≥300 million yuan in the most recent year."
In 2021, JAKA Robotics achieved revenue of 176 million yuan, a significant year-over-year increase of 264.21%, greatly improving the company's revenue growth rate over the most recent three years. In 2022, JAKA Robotics achieved revenue of 281 million yuan, meeting the requirement of no less than 200 million yuan in revenue for the most recent year.
Behind JAKA Robotics meeting A-share STAR Market application conditions and technology innovation attribute evaluation standards, what proportion of revenue the company contributed by changing revenue recognition methods awaits the company's answer.
Although the company has not disclosed the contribution of changing revenue recognition methods to IPO application, through examining details of the company's application materials, we found some questions regarding the company's conclusion that changing accounting methods had relatively small impact on revenue.
Application materials show that from 2021 to 2024, among individual customers whose revenue recognition methods changed, 9 companies belonged to the top ten customers in robot complete machine business in each period. Among them, after customer A's revenue recognition method changed, average acceptance period decreased from 171.23 days to 1.3 days, reducing by 169.93 days, a reduction ratio as high as 99.2%. Fujinsen (Nantong) Technology Co., Ltd.'s acceptance period decreased from 48.43 days to 3.17 days, reducing by 45.26 days, a reduction ratio of 93.45%.
JAKA Robotics stated that Customer A is a direct sales production manufacturer customer. In early 2020, it first attempted to purchase collaborative robot products for building automated production lines. Due to unfamiliarity with product performance, the first batch of contracts were signed according to its procurement contract template and required comprehensive acceptance testing of the company's robot complete products. After the first batch of cooperation, Customer A understood the company's collaborative robot product characteristics with good quality feedback, became familiar with product usage, and Customer A's technical department could independently complete automated production line integration. Therefore, to simplify transaction procedures, both parties subsequently amicably negotiated to adopt receipt delivery method.
According to analysis of JAKA Robotics' previous prospectus and inquiry response content, Customer A should be Green Harmonic Drive. In 2021, Green Harmonic Drive and its related entities had sales of 6.5417 million yuan with JAKA Robotics, making it JAKA Robotics' fourth-largest customer.
JAKA Robotics stated that in terms of accounting timing, Customer A (Green Harmonic Drive) confirmed procurement warehousing immediately after completing receipt and issuing receipt documents according to contract terms, matching the timing of the issuer's revenue recognition. However, Green Harmonic Drive's 2021 annual report shows its procurement amounts from first and second-largest suppliers were 6.6119 million yuan and 6.0966 million yuan respectively, with no data matching 6.5417 million yuan.
Since JAKA Robotics claims Customer A (Green Harmonic Drive) confirmed procurement warehousing after completing receipt and issuing receipt documents, why are the two companies' data inconsistent?
Regarding ownership transfer timing agreed with similar suppliers, Customer A (Green Harmonic Drive) purchased small amounts of collaborative robot complete products from other brands in 2022. Compared to JAKA Robotics, other brand manufacturers had relatively small cooperation scale with Customer A, thus adopting Customer A's standard contract template. In other words, Customer A adopted "acceptance" mode for other robot manufacturers, different from JAKA Robotics.
Additionally, JAKA Robotics' other customers Guangzhou Ruisong Automation Equipment Co., Ltd., Nanjing Silicon Scene Automation Technology Co., Ltd. (Nanjing Silicon Scene), and Gujian Robot purchased collaborative robot complete products from other brands during the reporting period. Among them, Nanjing Silicon Scene's contract standard clauses with other brands stipulated acceptance, different from JAKA Robotics' "receipt" mode. JAKA Robotics stated that Nanjing Silicon Scene's actual delivery process has no substantial difference from the company's receipt process.
After changing revenue recognition methods in June 2021, JAKA Robotics' revenue surged 264.21% in 2021, but the company's cash collection ratio decreased from 99.38% in 2020 to 76.54%. In 2022, the company's revenue surged again by 59.68%, but the cash collection ratio decreased from 76.54% in 2021 to 68.47%.
Financial professionals believe that cash collection ratio (cash received from goods sales/operating revenue) is a core indicator for verifying revenue authenticity, with normal values ≥1 (including VAT). If revenue grows while cash collection ratio declines, it may reflect the following issues: first, the enterprise may have relaxed credit policies, leading to surging accounts receivable; second, the possibility of premature revenue recognition or even false sales cannot be ruled out.
Furthermore, JAKA Robotics' enterprise free cash flow has been negative for years. Wind data shows amounts of -305 million yuan, 9 million yuan, -493 million yuan, -84 million yuan, and -49 million yuan from 2020-2024 respectively. Except for 2021 being barely positive, other years were negative, totaling -922 million yuan over five years, approaching 1 billion yuan.
Financial professionals believe free cash flow (operating cash flow net amount - capital expenditure) reflects an enterprise's sustainable cash-generating capability. Long-term negativity may stem from capital consumption from aggressive expansion, low operational efficiency, etc. If an enterprise simultaneously shows "revenue surge but declining cash collection ratio" + "long-term negative free cash flow," first, financial fraud risks need attention, such as inflated revenue placed in accounts receivable, inventory, construction in progress, fixed assets and other accounts, while capital expenditure masks fund outflows; second, unsustainable growth risks need attention.
Additionally, the proportion of revenue that intermediary institutions like accountants and sponsors can confirm authenticity through verification also brings certain questions to the company's revenue authenticity. From 2021-2023, the proportion of revenue that intermediary institutions could confirm through correspondence was 78.94%, 86.22%, and 81.73% respectively. If adjusted and matched amounts are deducted, this proportion would be much lower.
From 2021-2023, the proportion of revenue that intermediary institutions could confirm through interviews was 71.34%, 76.7%, and 76.45% respectively; the proportion of revenue confirmed through revenue authenticity verification procedures was 67.61%, 72.04%, and 77.75% respectively; the proportion of revenue that intermediary institutions could confirm through procedures such as on-site inspection, machine backend activation and actual usage, after-sales service, etc. was 69.40%, 66.84%, and 63.56% respectively, all below 70%.
**Core Technology Independence and Advancement Heavily Questioned**
Besides changing core product revenue recognition policies, JAKA Robotics' core technology advancement and independence were questioned for two consecutive rounds, both as the first question.
Regarding technology independence, the exchange mainly inquired about the company's core technology sources. Application materials show the company co-established two joint research centers with Shanghai Jiao Tong University and signed cooperation framework agreements; the company previously inherited multiple intellectual property rights from Shanghai Jiao Tong University; among existing patents, some inventors are Shanghai Jiao Tong University faculty; the company's core technical personnel all graduated from Shanghai Jiao Tong University; single-arm/dual-arm lightweight robot system projects and integrated joint-based JAKA collaborative robot drive board development projects commissioned by the company to Shanghai Jiao Tong University have developed products or key component samples; collaborative robot control algorithm projects had used company products before the reporting period.
The Shanghai Stock Exchange required JAKA Robotics to explain whether core technologies were developed based on Shanghai Jiao Tong University related technologies or cooperative project related technologies, whether technology R&D depends on Shanghai Jiao Tong University, and whether it has independent R&D innovation capabilities.
JAKA Robotics stated that R&D projects commissioned to Shanghai Jiao Tong University provided partial principle methods in the formation process of the company's 2 core technologies, explored feasible paths for the company's industrialization R&D activities, and improved R&D efficiency. The company's core technologies "near-zero force drag teaching" and "non-contact visual safety protection" were developed based on borrowing partial principle solutions from Shanghai Jiao Tong University commissioned R&D project results, but the company subsequently redesigned or iterated and finally applied them industrially; the company's technology R&D does not depend on Shanghai Jiao Tong University and has independent R&D innovation capabilities.
Compared to having significant connections with Shanghai Jiao Tong University in technology, JAKA Robotics has deeper bindings with multiple Shanghai Jiao Tong University professors in equity.
As of the prospectus disclosure date, JAKA Robotics' actual controller is Li Mingyang. Li Mingyang directly holds 5.98% of company shares and indirectly controls 35.65% of company voting rights through acting-in-concert relationships with JAKA Industry, Shanghai Jiaorui, JAKA Future Management, JAKA Enterprise Management, and JAKA Juli, so Li Mingyang collectively controls 41.63% voting rights and serves as the issuer's chairman.
Among them, Shanghai Jiaorui is actual controller Li Mingyang's acting-in-concert party, holding 10.53% of JAKA Robotics shares, making it JAKA Robotics' third-largest shareholder. Public information shows Li Mingyang also graduated from Shanghai Jiao Tong University.
As of this prospectus signing date, Shanghai Jiaorui's shareholders are 10 professors or researchers from Shanghai Jiao Tong University, among whom Zhu Xiangyang has served as dean of Shanghai Jiao Tong University's Yuan Zhi Robot Research Institute from January 2023 to present. Xiong Zhenhua served as vice dean and deputy secretary of Shanghai Jiao Tong University's School of Mechanical Engineering from December 2014 to November 2020. Liu Chengliang serves as professor and director of the Mechatronic Control and Logistics Equipment Research Institute at Shanghai Jiao Tong University's School of Mechanical Engineering. Sheng Xinjun has served as vice dean of Shanghai Jiao Tong University's Yuan Zhi Robot Research Institute from September 2021 to present and has served as company director from December 2014 to present...
Additionally, the shareholder list of JAKA Robotics' largest shareholder JAKA Industry (19.50% shareholding) also includes many Shanghai Jiao Tong University professors, including Yan Yonghua, Zhu Xiangyang, Sheng Xinjun, etc.
JAKA Robotics' four core technical personnel all graduated from Shanghai Jiao Tong University. The company's vice general manager and chief technology officer has Shanghai Jiao Tong University doctoral degree and is a senior engineer; the company's robot business unit product line general manager Liu Bofeng has Shanghai Jiao Tong University master's degree; the company's European business unit R&D director Shao Wei also has Shanghai Jiao Tong University master's degree; the company's robot business unit testing center chief engineer Zhai Jiaxin has Shanghai Jiao Tong University bachelor's degree.
Including actual controller Li Mingyang who graduated from Shanghai Jiao Tong University, JAKA Robotics has deep connections with Shanghai Jiao Tong University, especially equity interest binding relationships with 10 Shanghai Jiao Tong University professors (including multiple academic leaders), making core technology independence easily questioned by outsiders.
According to the prospectus, Shanghai Jiaorui's investment timing in JAKA Robotics was when the company was established. At that time, Shanghai Jiaorui's controlled Hai'an Jiaorui invested in JAKA at 1 yuan per registered capital, totaling 1.5 million yuan investment with shareholding ratio as high as 30%. In January 2016, Hai'an Jiaorui transferred its JAKA Robotics shares to Shanghai Jiaorui.
From this perspective, Shanghai Jiaorui's cost of holding JAKA Robotics shares should be very low. If JAKA Robotics successfully goes public, the 10 Shanghai Jiao Tong University professors' paper wealth will be very high.
For this IPO, JAKA Robotics plans to issue no more than 20.618557 million new shares, accounting for no less than 25% of total share capital after issuance, planning to raise 676 million yuan. Simple calculation shows JAKA Robotics' IPO expected valuation is around 2.7 billion yuan, with Shanghai Jiaorui's valuation approximately 210 million yuan. If the 10 professors choose to reduce holdings and cash out, they will make substantial profits.
**Sales Expense Ratio Higher Than R&D Expense Ratio - Research or Marketing Driven?**
From 2022-2024, JAKA Robotics' R&D expenses were 47.5092 million yuan, 73.1289 million yuan, and 86.2316 million yuan respectively, accounting for 16.92%, 20.92%, and 21.53% of current operating revenue respectively.
JAKA Robotics' R&D expense ratio appears high, but sales expense ratio is higher. From 2022-2024, JAKA Robotics' sales expenses were 77.8204 million yuan, 97.7526 million yuan, and 96.7436 million yuan respectively, accounting for 27.72%, 27.96%, and 24.16% of current operating revenue respectively.
Moreover, JAKA Robotics' sales expense ratio is significantly higher than industry average. From 2022-2024, comparable companies' average sales expense ratios were 13.1%, 15.58%, and 15.40% respectively.
JAKA Robotics stated that the company's sales expense ratio is lower than Dobot but higher than industry comparable company averages. On one hand, compared to comparable listed companies except Dobot and Techman, the company's revenue scale is relatively small, with sales expenses accounting for relatively high proportion of operating revenue; on the other hand, the company is in a stage of rapid business expansion, and to seize market opportunities, the company invested more sales personnel to develop and maintain business, incurring relatively high sales expenses.
So, is JAKA Robotics a research-driven company or marketing-driven company? Time will reveal the answer.