On February 9, 2026, Vitality Technology Co., Ltd. submitted a listing application to the Main Board of the Hong Kong Stock Exchange. China International Capital Corporation Limited and Deutsche Bank are acting as joint sponsors.
Prior to the IPO, Vitality's ownership is highly concentrated. The controlling shareholder, Zhongnan Chuangfa, together with strategic investor Bain Capital, collectively hold 81.63% of the shares, while public float is less than 10%. During a group restructuring in 2021, Vitality committed to distributing dividends to its controlling shareholder and had repaid a cumulative total of 1.375 billion RMB by the time of the application.
Vitality's core business is heavily reliant on the consumer electronics industry and is deeply intertwined with Samsung and Apple. Although the company has expanded into non-consumer electronic applications such as smart vehicles and emerging smart terminals, the revenue contribution from these segments remains low and has not yet formed a second growth engine.
Furthermore, Vitality faces significant financial pressure. As its business continues to expand, interest-bearing debt has risen year after year. As of the end of September 2025, the combined total of short-term and long-term borrowings was 1.79 billion RMB, while the balance of cash and cash equivalents was 1.673 billion RMB, indicating substantial debt repayment pressure.
A contradiction exists in the disclosure regarding the controlling shareholder. In 1935, Hong Kong's Zhongnan Group was founded. Starting with watch strap businesses, the founder, Zhuang Jing'an, developed PVD coating for watch straps. As PVD coating technology advanced, Vitality gradually became independent from Zhongnan Group, evolving into a leading global enterprise in PVD surface treatment and flat glass deep processing.
To date, Vitality has completed two rounds of financing, both led by the controlling shareholder, Zhongnan Chuangfa. In July 2017, Zhongnan Chuangfa injected 166 million RMB into the company. In September 2021, Zhongnan Chuangfa, Wang Wei, and employee持股 platforms collectively injected 469 million RMB into the company.
In May 2022, Zhongnan Chuangfa transferred 306 million shares, representing 40% of the company's total shares, to BCPE Baymax for 284 million USD. In February 2026, Zhongnan Chuangfa repurchased 38.2895 million shares, representing 5% of the company, from BCPE Baymax for 490 million RMB, a price that doubled compared to the previous transaction.
Before the IPO, Zhongnan Chuangfa holds a 57.25% stake in Vitality and is the controlling shareholder. The three brothers, Zhuang Xueshan, Zhuang Xuehai, and Zhuang Xuexi, are the ultimate controllers. BCPE Baymax holds a 24.38% stake, making it the second-largest shareholder and the largest external investor. Public information indicates that BCPE Baymax is controlled by funds managed by the private equity giant Bain Capital and was specifically established to acquire the stake in Vitality.
Due to the lack of external equity financing and few transfers of existing shares, Vitality's ownership is highly concentrated. Zhongnan Chuangfa and Bain Capital collectively hold 81.63% of the shares. The public shareholders are only Chibi Sango, Hubei Dingxin, and Wuhan Changniu, with a combined holding not exceeding 10%.
Notably, Vitality's prospectus contains inconsistencies in identifying the controlling shareholder. The "History, Development, and Corporate Structure" chapter includes Wang Wei as a controlling shareholder, whereas the "Relationship with Controlling Shareholders" chapter does not list him as such.
Before the IPO, Wang Wei directly holds 3.62% of the company's shares. Through his 51% interest in the general partner of employee持股 platforms, he indirectly controls 5.34% of the voting rights, resulting in a total control of 8.96% of the voting rights. Wang Wei also serves as an executive director, CEO, and General Manager of the company, and holds director and management positions in several subsidiaries.
Just before submitting the application, Vitality distributed a substantial "New Year bonus" to shareholders. On January 26, 2026, based on the 2024 net profit of 618 million RMB, the company declared a cash dividend of 60 million RMB, representing a payout ratio of approximately 9.71%.
Additionally, during the 2021 group restructuring, Vitality had committed to distributing dividends to the controlling shareholder. During the reporting period, it repaid 566 million RMB, 440 million RMB, and 139 million RMB respectively, and made a further repayment of 230 million RMB on January 8, 2026.
Vitality is highly dependent on Samsung and Apple, and its smart vehicle business has fallen short of expectations. In recent years, stable growth in global demand for tablets, mobile phones, automotive displays, and wearable devices has driven Vitality's rapid performance growth. Financial data shows that for 2023, 2024, and the first three quarters of 2025, the company achieved revenues of 3.481 billion RMB, 5.199 billion RMB, and 4.618 billion RMB, respectively, and recorded net profits of 363 million RMB, 618 million RMB, and 572 million RMB, respectively.
Vitality's products and solutions are primarily applied in the consumer electronics industry, with over 98% of revenue coming from smartphones, tablets, laptops, and smart wearable devices. Despite expansion into non-consumer electronic applications like smart vehicles and emerging smart terminals, the revenue contribution from these businesses remains low and has not formed a second growth curve.
Vitality's growth is fundamentally built on deep cooperation with two core clients spanning over a decade, or even two decades. During the reporting period, revenue from the largest customer, Customer A, accounted for 53.2%, 47.7%, and 55.8% of total revenue, respectively. Revenue from the second-largest customer, Customer B, accounted for 15.7%, 15.0%, and 14.9%, respectively. According to the prospectus, Customer A and Customer B are two of the world's largest technology groups headquartered in South Korea and the United States, respectively. It is evident that Customer A is Samsung and Customer B is Apple.
Essentially, Vitality follows a "high-precision" strategy of partnering closely with giants, deeply tying its fate to a small number of brand owners. The advantages of this model are significant: stable order sources, economies of scale, and early access to new product collaborations create a virtuous cycle. However, it also magnifies the risk of "putting all eggs in one basket" to the extreme. If core clients pressure prices, change suppliers, or adjust production capacity due to geopolitical factors, the company's performance volatility could be instantly amplified.
Similar cases are common in the consumer electronics industry. For instance, Ofilm's performance plummeted after being removed from Apple's supply chain in 2020. Companies like Goertek, Lens Technology, and Luxshare Precision have also experienced cycles where fluctuations in business with a single client caused significant earnings volatility. In essence, Vitality remains a company deeply tied to its core clients, rather than a terminal company with its own brand or sales channels. In other words, its competitive barrier lies in technical strength, but it does not truly control demand-side dominance.
More paradoxically, the second growth curve Vitality is betting on—smart vehicles—faces challenges. From a business narrative perspective, this is undoubtedly a market full of potential. High-precision optical components like LiDAR window covers and HUD free-form mirrors require even more stringent PVD processes and should, in theory, offer better gross margins. However, the reality has fallen short of expectations.
In the first three quarters of 2025, Vitality's automotive business revenue was only 57 million RMB, accounting for less than 2% of total revenue, while its gross margin plummeted from 23.3% to 9.5%. Protracted certification cycles, high upfront customization costs, and repeated adjustments during small-batch trial production have significantly diluted the profitability of the automotive business.
Industry insiders point out that the automotive supply chain fundamentally differs from the consumer electronics supply chain. The former emphasizes long-term validation and stable delivery, characterized by a slower pace, longer payment cycles, and lower tolerance for errors, making it difficult to replicate the high-turnover model of the mobile phone industry. For a company originally reliant on the scale effects of large clients, this is a test of endurance—a marathon rather than a sprint for explosive growth.
Capital expenditure is eroding cash flow. Vitality's leading global position in consumer electronics PVD coating provides it with stable operating cash flow. During the reporting period, net cash flow from operating activities was 924 million RMB, 1.029 billion RMB, and 981 million RMB, respectively, with cash flow ratios of 2.55, 1.66, and 1.72, respectively.
However, despite growing operating cash flow, Vitality's financial condition has been deteriorating. On one hand, the smart vehicle business is still in a strategic investment phase. Entering the automotive-grade market requires building new production lines that meet automotive standards, purchasing high-precision equipment, and undergoing lengthy product validation. On the other hand, to maintain its market position in consumer electronics, the company needs to continuously upgrade equipment and expand capacity.
Vitality's operating cash flow is insufficient to support this business expansion, necessitating ongoing external funding to fill the gap. This has led to the company using a large portion of its surplus cash each year to repay debt. Financial data shows that net cash flow from investing activities was -452 million RMB, -644 million RMB, and -492 million RMB during the reporting period, while net cash flow from financing activities was -466 million RMB, -772 million RMB, and 44 million RMB, respectively, remaining negative for extended periods. Particularly in 2024, the net cash outflow from investing and financing activities far exceeded the net inflow from operating activities, creating a gap close to 400 million RMB.
Due to consecutive large capital expenditures, Vitality's interest-bearing debt has repeatedly reached new highs. As of the end of September 2025, the company's total interest-bearing debt reached 2.672 billion RMB. This includes short-term borrowings of 1.179 billion RMB and long-term borrowings of 611 million RMB, which increased by 34.39% and 13.17% respectively compared to the end of 2024, totaling 1.79 billion RMB. During the same period, the balance of cash and cash equivalents was 1.673 billion RMB, indicating significant debt repayment pressure.