Yueshi Holdings Co., Ltd. (Yueshi Holdings), after a name change, is making another attempt at a Hong Kong IPO. The core question is whether its narrative of "cold chain digital intelligence plus agricultural product distribution" is a genuine dual-engine growth story, or simply a low-margin trading business with significant revenue but no real profit. It is noteworthy that the company's overall gross profit margin is below 3%, and its digital intelligence business accounts for less than 1% of total revenue.
Furthermore, the company's inventory has surged sharply alongside its business scale, while cash flow has remained consistently negative. This raises a critical question: does Yueshi Holdings' business model heavily depend on the resilience of its capital chain? Compounding this concern is the company's debt-to-asset ratio, which is nearing 80%.
Recently, Shenzhen Yueshi Holdings Co., Ltd. (Yueshi Holdings) refiled for a Hong Kong IPO. The company's initial filing in January had lapsed. Notably, the company changed its name between the two filings, dropping "Digital Intelligence" from its title, shifting from Shenzhen Yueshi Digital Intelligence Co., Ltd. to its current name.
Trade Intermediary Operations with Margins Below 3%
According to public information, Yueshi Holdings, founded in 2017, is presented as a technology-driven enterprise primarily engaged in the sale of cold-chain agricultural products and the provision of cold-chain digital intelligence integrated solutions. Its prospectus outlines two business lines: cold-chain agricultural product sales and cold-chain digital intelligence solutions. These two lines are interconnected through customer resources, operational experience, data analysis, and coordination capabilities, supporting procurement planning, inventory coordination, and sales execution.
The cold-chain agricultural product sales segment involves organizing procurement and sales based on data and operational insights generated by the company's digital intelligence platform and related tools. The goal is to closely align with actual market demand. Customers are primarily small and medium-sized agricultural product wholesalers. Revenue in this segment comes from selling a diversified portfolio of cold-chain products, including meat, seafood, fruit, and other items.
In contrast, the cold-chain digital intelligence integrated solutions segment is built on the Yueshi Intelligent Cold Chain Cloud Platform, offering digital infrastructure and operating systems for standardized management and digitalization of cold-chain logistics. Customers here are mainly cold-chain facility operators in key distribution links, such as agricultural wholesale markets, food processing plants, agricultural product parks, and major import ports. Revenue is generated from providing software systems and related services, including deployment, configuration, and ongoing operational support.
In reality, the digital intelligence business represents a very small portion of the company's operations. The primary driver is cold-chain agricultural product sales. During the reporting period, revenue from the digital intelligence segment was 22.327 million yuan, 30.654 million yuan, 37.496 million yuan, and 15.591 million yuan, respectively. This accounted for only 1.8%, 1%, 0.7%, and 0.6% of total revenue, showing a declining trend over time.
Despite annual revenue nearing 6 billion yuan, the company's profitability is weak. The prospectus shows that for the years 2023, 2024, 2025, and the four months ended April 30, 2026, Yueshi Holdings reported revenues of 12.54 billion, 29.81 billion, 59.37 billion, and 28.05 billion yuan. Net profits were -0.28 billion, -2.19 billion, -17.64 billion, and 0.36 billion yuan, respectively. Adjusted net profits were -6.043 million, 29.691 million, 68.717 million, and 35.882 million yuan. A critical point is that the company's overall gross margin is below 3%, standing at 1.82%, 2.72%, 2.84%, and 2.6% over the reporting periods.
Business Model Heavily Tests Capital Chains
According to the prospectus, Yueshi Holdings operates as a principal in its cold-chain agricultural product sales business. It purchases products from upstream suppliers and sells them to downstream customers under its own brand. This means the company plays a comprehensive role in procurement, transaction structuring, and execution. It procures based on its assessment of market demand, derived from historical transaction data, market information, inventory levels, and aggregated customer demand signals. The company uses a network of suppliers across multiple procurement regions and negotiates terms directly.
On the sales side, Yueshi Holdings determines commercial terms, including pricing and settlement, with customers by referencing procurement costs, import-related expenses, and current market conditions. It also coordinates key operational steps throughout the transaction, such as customs clearance, documentation, and delivery. By participating in procurement planning, price setting, and cross-border process coordination, the company aims to efficiently match supply and demand and reduce operational complexity for its downstream customers.
Under this model, the company's inventory has surged dramatically with business expansion. Inventory ballooned from 258 million yuan in 2023 to 2.158 billion yuan in 2025. This self-operated stocking model and the resulting inventory surge introduce several risks. First, if the company fails to accurately forecast customer demand or manage procurement and inventory levels effectively, the increased inventory could become unsalable, leading to impairment losses. Indeed, the company's inventory turnover days are slowing, increasing from 58 days in 2023 to 82 days in 2024, 101 days in 2025, and 102 days for the four months ended April 30, 2026.
Second, the company's customer base is heavily skewed towards small and medium-sized entities. In 2023, 2024, 2025, and the four months ended April 30, 2026, small and medium-sized agricultural product wholesalers accounted for approximately 98.5%, 98.6%, 96.9%, and 96.5% of total customers. The customer repurchase rate for Yueshi Holdings' cold-chain agricultural product sales business reached 36.6% in 2025. Industry insiders note that comparable companies, like Red Star Cold Chain, have enhanced customer stickiness by using a "front-store, back-warehouse, on-site storage, instant trading" model. As of December 31, 2024, Red Star Cold Chain had provided frozen storage services to over 700 clients, covering Hunan Province and eight other provinces. Historically, its top 10 clients had an average cooperation period of about 14 years, and the customer renewal rate for its frozen food trading platform business has consistently remained at 92.0% or above, far exceeding the industry average. In contrast, Yueshi Holdings' digital intelligence system revenue is negligible. This raises the question of whether its "cold chain digital intelligence system plus agricultural product distribution" narrative actually improves customer retention.
Finally, this model puts significant pressure on the company's capital chain. Yueshi Holdings has weak cash-generating ability, with consistently negative net cash flow from operating activities. From 2023 to 2025, the net cash outflow from operations was 0.56 billion yuan, 3.43 billion yuan, and 0.93 billion yuan, respectively. The company's debt-to-asset ratio is also high. It was technically insolvent (liabilities exceeding assets) for two consecutive years before 2025. After adjusting for the measurement of preferred shares, the debt-to-asset ratio remained at 76.95% in 2025. Currently, the company has only 269 million yuan in cash on hand, while short-term borrowings stand at 414 million yuan.