On August 21, Zhuhai Kingzhiwei AI Co., Ltd. (hereinafter referred to as "Kingzhiwei") submitted its second listing application to the Main Board of the Hong Kong Stock Exchange, with joint sponsors being Guotai Junan Capital and BOCI Asia. A September 4 announcement further appointed CMB International and Huasheng Securities as overall coordinators. This is not Kingzhiwei's first attempt at an IPO; its initial filing on December 15, 2025, lapsed after eight months due to expiration.

According to the prospectus, this company, which claims to be "the number one revenue generator in China's AI digital employee solutions market," has accumulated a net loss of approximately CNY 640 million over the past three and a half years. Its cash and cash equivalents have dwindled to just CNY 72 million, while redemption liabilities of CNY 2.126 billion hang overhead.

Where the journey began

The story of Kingzhiwei started as an internal "venture" within a large corporation. In March 2016, A-share listed company Kingstar Technology (600446.SH) implemented a "platform-based management model," encouraging executives to incubate innovative businesses within the system. Kingzhiwei was thus established with an initial registered capital of CNY 20 million, with Kingstar Technology holding a 51% stake and Jinshi Zhongcheng, where Liao Wanli served as the sole general partner, holding the remaining 49%. Liao Wanli previously worked at Kingstar Technology, Agricultural Bank of China, and other institutions, and has served as CEO since March 2016. He and co-founder Jin Zhuo, a former colleague at Kingstar Technology, were classmates in computer science at Hangzhou Dianzi University.

Over the past decade, Kingzhiwei has completed a three-step leap from RPA to "AI digital employees" and then to "enterprise-level intelligent agents": launching an RPA-based digital employee platform in 2016, the K-APA platform in 2021, and the Ki-Agent enterprise-level intelligent agent platform in January 2025. Citing data from Frost & Sullivan, the prospectus states that Kingzhiwei ranked first in China's AI digital employee solutions market by revenue for three consecutive years from 2023 to 2025, serving over 1,600 clients, including more than 270 banks (covering all six state-owned banks) and over 130 securities firms (covering more than 90% of China's brokerages).

In recent years, founding shareholders have gradually exited. Kingstar Technology's stake has been diluted from the initial 51% to 12.14% through multiple financing rounds and three equity transfers: in May 2020, Kingstar Technology transferred part of its stake to external investors for approximately CNY 30.075 million and introduced a CNY 75 million Series A capital increase, after which its stake dropped to 33% and Kingzhiwei was no longer consolidated. In September 2021, Kingstar Technology sold a 5% stake for CNY 88.05 million to four parties including Zhonghu Jinzhiwei and Zhuhai Xinbao Chenxing; in June 2023, it transferred additional stakes for CNY 45.903 million to Galaxy Investment and Gongqingcheng Hewei, reducing to 12.14%. These three transactions generated a total cash-out of approximately CNY 164 million.

In parallel, external institutions flocked in: Hillhouse Capital and the National Manufacturing Transformation and Upgrading Fund entered the fray, with Qiming Venture Partners' three funds holding a combined 12.26% stake. The five financing rounds totaled CNY 686 million, with post-investment valuations rising from CNY 500 million in the 2020 Series A round to CNY 3.075 billion in the 2023 Series C3 round. The prospectus clearly states that, as of the latest practicable date, the net proceeds from pre-IPO investments have been "fully utilized by the Group."

The raised funds have been burned through, making an IPO the next step, but the process has not been smooth: the company completed its shareholding reform and name change on December 12, 2025, filed its first Hong Kong IPO application just three days later, and after the application lapsed, returned with a renewed filing on August 21 this year. Notably, this listing is based on Chapter 18C's "commercialized company" provisions, which require revenue of no less than HKD 250 million in the most recent fiscal year — Kingzhiwei's 2025 revenue was CNY 256.1 million, barely meeting the threshold.

It is also worth noting that Kingstar Technology, with its "triple identity," remains the second-largest shareholder at 12.14%, while also being among the company's top five customers (contributing CNY 19.2 million and CNY 16 million in revenue in 2023 and 2024 respectively) and a supplier. The fairness of related-party transactions and the company's independence will likely be unavoidable topics in regulatory inquiries.

Subscription revenue declines as losses widen year after year

From 2023 to 2025, the company's revenue grew from CNY 216.7 million to CNY 243.5 million and then to CNY 256.1 million, representing a compound annual growth rate of only 8.7%. Kingzhiwei's revenue growth slowed to 5.2% in 2025, while its first-half 2026 revenue of CNY 65.13 million grew 41.7% year-over-year, indicating an acceleration. Under Frost & Sullivan's classification, AI digital employee solutions represent only an approximately 11.2% segment of the enterprise AI market, with a scale of about CNY 7.8 billion in 2025. Kingzhiwei's CNY 256 million revenue corresponds to a market share of roughly 3.3%. The market is fragmented, with limited gaps between players.

The true advantage lies in the financial sector: in 2025, the company held a 9.9% share of the financial services segment, leading the second-place player by over seven percentage points. However, this very foundation has begun to show cracks. Kingzhiwei's revenue from the financial industry was CNY 177.9 million in 2025, down 6.4% year-over-year, with its share dropping from 85.8% in 2023 to 69.5%. The company attributes this to some clients shifting demand toward Ki-Agent project-based solutions, with related projects awaiting acceptance in 2026.

Looking at the revenue structure, project-based revenue's share rose from 74.1% in 2023 to 76.9% in 2025, with a gross margin of 44.2%, significantly lower than the 75.0% for subscription-based revenue. Subscription revenue, which better reflects a software company's quality, was CNY 43 million in 2025, down from CNY 58.73 million in 2024, with its share shrinking to 16.8%. Corroborating the subscription revenue contraction, the customer retention rate fell from 74% in 2023 to 66% in 2025, while the average revenue per customer dropped from CNY 380,000 to CNY 330,000.

Beyond sluggish growth, losses are expanding at an accelerating pace. From 2023 to 2025, Kingzhiwei's net losses were CNY 62.57 million, CNY 122 million, and CNY 346 million respectively, with an additional CNY 109 million loss in the first half of 2026. The widening losses primarily stem from accounting treatment of preferred shares: shares with preferential rights issued to pre-IPO investors are recognized as financial liabilities, with changes in the carrying value of redemption liabilities consuming CNY 119 million and CNY 278 million of profits in 2024 and 2025 respectively. Even excluding redemption liability changes, share-based payments, and listing expenses, the adjusted net loss reached CNY 27.13 million in 2025, expanding to CNY 56.82 million in the first half of 2026 — an order of magnitude higher than the adjusted loss of under CNY 3 million in 2024.

Cost-side pressures are plainly visible: R&D expenditure in 2025 was CNY 78.8 million, up 41.5% year-over-year; selling and distribution expenses in the first half of 2026 reached CNY 60 million, surging 105.5% year-over-year, equivalent to 92.1% of period revenue. This included CNY 22.91 million in share-based payments and a CNY 7.4 million increase in channel fees. Combined with R&D and administrative expenses, the three cost items totaled approximately twice the period's revenue.

Cash of CNY 72 million versus redemption liabilities of CNY 2.126 billion

Tighter than the income statement are the balance sheet and cash flow statement. The company's operating cash flow has been consistently negative, with net outflows of CNY 56.7 million, CNY 26.49 million, and CNY 59.16 million from 2023 to 2025, and a net outflow of CNY 65.21 million in the first half of 2026 alone — a single half-year "bleed" exceeding the full-year 2023 figure. Book cash and cash equivalents shrank from CNY 504 million at the start of 2023 to CNY 71.91 million by the end of June 2026. Adding committed but undrawn bank facilities, available resources total approximately CNY 176.9 million. The prospectus states a 2025 cash burn rate of CNY 10.8 million per month, meaning existing liquidity can sustain operations for less than seven months.

On the other side, redemption liabilities stood at CNY 2.126 billion at the end of June 2026, placing the company in a net liability position of CNY 1.579 billion. The prospectus explicitly states: if the listing application is withdrawn or rejected, or if the hearing is not passed within 18 months of submission, or if the listing is not completed within six months after the hearing, the redemption rights will resume effect. In other words, the IPO is both a channel to realize valuations and a practical exit to resolve payment pressure.

Receivables pressure is also significant. Trade receivables and notes receivable grew from CNY 117.5 million at the end of 2023 to CNY 161.1 million at the end of 2025, with turnover days extending from 182 days to 373 days in the first half of 2026. For some financial clients, the longest cycle from acceptance to payment reaches 48 months. In the first half of 2026, the company recognized CNY 10.95 million in impairment losses on financial assets and contract assets, compared to a reversal in the prior-year period.

On the compliance front, Kingzhiwei's underpayments of social insurance and housing provident fund contributions were approximately CNY 13.2 million, CNY 16.2 million, CNY 19.3 million, and CNY 9.3 million in 2023, 2024, 2025, and the first half of 2026 respectively, for which no provisions have been made. Of 48 leased properties, 26 lease agreements were not registered or filed. In July 2025, the company sued client Runze Zhiyuan to recover approximately CNY 12 million in outstanding payments; the counterparty counterclaimed for CNY 21 million. After a first-instance judgment in favor of Kingzhiwei for CNY 10.4 million, the case remains in second-instance proceedings. Additionally, 11 clients were placed on the U.S. Entity List during the track record period.

From a CNY 500 million valuation to CNY 3.075 billion, Kingzhiwei spent seven years burning through CNY 686 million in financing. Now filing for the second time, its success or failure is no longer just an ordinary IPO attempt: the cash balance and redemption liability pressures constitute a capital equation that needs to close as soon as possible. For investors, the truly critical questions are — when the industry is growing at four times the company's rate, how long can the "AI digital employee No. 1" story hold, when will subscription revenue reverse its decline, and can the company achieve self-sustaining cash generation without continuous external infusions?

Disclaimer: The opinions expressed in this article do not constitute any investment advice. Investors who act on this information do so at their own risk.