Since announcing a major strategic contraction, a stream of negative reports describing Dreame's financial strain has surfaced online, painting a picture of a company struggling with liquidity. These troubling signs include suppliers arriving at its offices to demand payment, a fire sale of office chairs, and records of dishonored bills.
Now, it appears that founder Yu Hao, known for his self-proclaimed shrewdness, is attempting to conceal these signals of financial distress by shifting debts to entities outside its core corporate structure.
At least two suppliers have disclosed that they were asked by Dreame to transfer outstanding payments to the names of other companies. These entities, often linked to peripheral business units, typically have minimal registered capital, weak solvency, and no direct equity connection to Dreame's main operating company. A search of online posts from suppliers demanding payment reveals that the debtor is frequently not a core Dreame company, but rather a business unit incubated with state-owned capital funds or entities established through funds reportedly controlled by Yu Hao's parents.
Currently, some suppliers have secured repayment commitments through legal channels, while others continue to pursue their claims. These marginalized debts are apparently not consolidated into the financial statements of Dreame's core companies, effectively hiding the extent of its unpaid obligations. Furthermore, during the first half of 2026, Dreame utilized intra-group related-party transactions for accounts receivable financing, a method industry experts suggest is a veiled form of secured borrowing. By using this approach, Dreame can reduce the overall scale of group guarantees, thereby improving the appearance of its financial reports.
According to media reports, Dreame completed the filing and acceptance of its STAR Market IPO guidance in 2025 and plans to submit its listing application in the second half of 2026. There have also been reports that the company is considering a Hong Kong IPO as early as next year. The question remains: can Dreame successfully navigate its path to listing while burdened with these hidden financial pressures?
Are Business Units Becoming Debt Repositories?
One supplier stated that their company originally signed a contract with Business Unit A, a subsidiary of Dreame, which still had unpaid amounts. During recent negotiations over the payments, Dreame requested the supplier to sign a mediation agreement to transfer the debt to Company B, a subsidiary of Business Unit A. The supplier discovered that Business Unit A, established in 2024, had a registered capital of 1 million yuan, while Company B, formed in 2025, had a registered capital of only 200,000 yuan.
The supplier refused to sign the agreement, describing Company B as a shell company with registered capital of just 200,000 yuan, and expressed doubts about its ability to pay, particularly since the connected entity was being severed. After the refusal, Dreame apparently promised to settle the debt within three months. However, before requesting this debt transfer, Business Unit A may have already been moved out of Dreame's core ownership structure months prior.
Business registration records show that Business Unit A was initially wholly owned by Dreame Entrepreneurship Incubator (Suzhou) Co., Ltd., itself a subsidiary of the core company Dreame Technology (Suzhou) Co., Ltd. Founder Yu Hao directly holds 31.15% of this core company, making it one of the few core entities in which he has a significant stake. In June 2025, the equity of Business Unit A was transferred to Yuanqi Xinghe (Suzhou) Network Technology Co., Ltd., and later to Lingrun Entrepreneurship Incubator (Suzhou) Co., Ltd. These companies are investment vehicles funded by two Dreame-affiliated funds, ultimately controlled by natural persons Bai Meifang and Yu Xianjun.
According to another supplier and previous media reports citing insiders, Bai Meifang and Yu Xianjun are believed to be Yu Hao's parents. This suggests that since mid-2025, Business Unit A has been removed from the equity scope of Dreame Technology and Yu Hao, along with its assets and liabilities. The unit now faces legal disputes, including a renovation contract case filed in late 2025 and an advertising contract case filed in March of this year.
This practice is reportedly not isolated. Another supplier revealed that their company originally contracted with Suzhou Zhui Chuang, a subsidiary of Dreame Technology, but the debt was ultimately transferred to Company C, an entity incubated by Dreame but with no direct connection to the core group. Company C is controlled by an investment platform, with Bai Meifang holding 99.99% and Yu Xianjun 0.01% of its shares. This effectively distances the debt from Dreame's core operations.
The critical question is whether more supplier payments have been channeled into these marginalized business units. In chat screenshots released by suppliers, a contact person for Dreame allegedly stated that "all suppliers are signing according to the general template prepared by the legal department." This implies that multiple suppliers involved with Business Unit A may have been asked to sign debt transfer agreements. On social media, self-identified suppliers have also commented that Dreame required them to transfer contracts to other group companies, aiming to separate Dreame from the debts and legal responsibilities. One supplier who refused to sign the transfer agreement successfully recovered their payments through legal means.
As Dreame implements its significant strategic contraction, condensing over 200 business units into four core tracks, the abandoned units may become repositories for debt. Numerous suppliers are pursuing payments online, but the entities they are chasing are often peripheral units with little equity linkage to Dreame's core, such as those involved in smart two-wheeled vehicles, pool cleaning robots, and automotive technology. Even if suppliers win lawsuits, their ability to recover funds from these underdeveloped entities remains uncertain.
For investors examining Dreame's financial statements, these potential liabilities may represent invisible risks.
Concealed Borrowing Channels of Core Companies
The situation with suppliers chasing payments suggests that Dreame faces significant cash flow challenges. In an effort to replenish its funds, the company has turned to less conventional financing methods, with activities in the first half of this year centered around Suzhou Zhui Chuang, its strongest core entity. Brother companies within the same group have frequently transferred their accounts receivable from Suzhou Zhui Chuang to banks for factoring financing.
In January, Dreame Technology (Shanghai) Co., Ltd. transferred a 30 million yuan receivable to a branch of China Construction Bank. Notably, the ultimate payer of this receivable was its fellow subsidiary, Suzhou Zhui Chuang. This was followed by at least four more factoring transactions involving receivables from Suzhou Zhui Chuang, totaling 170 million yuan. In February, subsidiaries like Dreame Software Information (Suzhou) Co., Ltd. and Dreame Intelligent Technology (Shaoxing) Co., Ltd. also transferred receivables owed by their parent company, Suzhou Zhui Chuang, to banks for financing.
Conversely, Suzhou Zhui Chuang may also be pledging receivables from its own subsidiaries. On April 30, 2026, it transferred receivables from a company named HONGKONG SECOTE PRECISION DREAME INTERNATIONAL (HONGKONG) LIMITED to a bank to secure financing of 140 million yuan. However, this exact company name cannot be found in corporate registries in mainland China or Hong Kong. Dreame's Hong Kong entity is registered as DREAME INTERNATIONAL (HONGKONG) LIMITED, while HONGKONG SECOTE PRECISION is the English name for SECOTE PRECISION, a precision manufacturer unrelated to Dreame. Even if the name is a typo, DREAME INTERNATIONAL (HONGKONG) LIMITED is still an affiliate of Suzhou Zhui Chuang, potentially allowing the parent company to use its subsidiary's receivables for secured financing.
A banking professional commented that the company appears to be extremely short on financing and has utilized nearly all available options, including various forms of accounts receivable. The expert also noted that the company is likely concerned about public information, avoiding guarantee-backed financing methods. Related-party receivable financing acts as a proxy for guarantees from the core company, which is typically the strongest performer with good business prospects, such as the one preparing for an IPO.
The professional explained that this special form of financing, while superficially appearing as "accounts receivable financing," is often approved by banks as unsecured loans, thereby allowing the parent company to lower its overall guarantee scale. Banks typically limit the scale of external guarantees to a certain proportion of net assets, so reducing this scale preserves future borrowing capacity. Additionally, guarantees and other contingent liabilities are converted into on-balance-sheet debt in bank calculations, which can adversely affect the quality of financial statements. The expert suggested that a company might choose this route either to avoid disclosing excessive liabilities or because it has run out of other options to secure additional funds.
For Dreame, both reasons may apply. The presence of suppliers chasing payments indicates a tight cash flow, necessitating more funding avenues. Historically, Dreame's pledged receivables were from external customers like JD.com, Xiaomi, and Suning. However, the concentration of related-party receivable financing in the first half of 2026 marks a shift.
With media reports indicating Dreame's intention to pursue listings on both the STAR Market and the Hong Kong Stock Exchange in the near future, avoiding excessive disclosure of liabilities and guarantee scales may be a key consideration ahead of its IPO. Yet, these hidden debts, guarantees, and marginalized supplier payments may be excluded from core financial statements but their impact remains. With such significant invisible burdens, the question of whether Dreame can successfully achieve its listing goals warrants continued attention.