New Stock Outlook | Capital Race Driven by Technology: The balancing challenge between the high growth expectations and operational risks of Jiuwu Intelligent

Since 2025, the embodied intelligence track has sparked a wave of IPOs globally, with the capital markets showing unprecedented enthusiasm for this next-generation technology direction that integrates artificial intelligence with physical interaction. In the domestic market, pioneers such as Extreme Wisdom and YUNJI Technology have successfully listed on the Hong Kong Stock Exchange, establishing their market positions based on validated business models and stable revenue in standardized scenarios such as logistics and hotels. On January 19, another representative player officially joined this capital race. Suzhou JiWu Intelligent Technology Co., Ltd. (hereinafter referred to as JiWu Intelligent) officially submitted its listing application to the Hong Kong Stock Exchange, with CICC and Citigroup serving as joint sponsors. However, amidst the overall industry dividend and intensifying competition, JiWu Intelligent's path to IPO is not smooth, with its business structure, profit path, and market challenges revealed in the prospectus awaiting a more cautious scrutiny from the capital market. Capable of making money, but operating cash flow under pressure Observations show that JiWu Intelligent operates at the intersection of the Siasun Robot & Automation industry and clean energy. The synchronized amplification of demand in these two industries has led to rapid revenue growth for JiWu Intelligent during the reporting period. The prospectus shows that in the past five years, China's embodied AI Siasun Robot & Automation has been the core growth engine of the global market, with the market size growing from 125 billion yuan in 2020 to 287 billion yuan in 2024, with a compound annual growth rate of 23.1%. It is expected that by 2029, the market size of embodied AI Siasun Robot & Automation will reach 110.1 billion yuan, and the compound annual growth rate from 2024 to 2029 will further increase to 30.9%. The demand for intelligent clean energy technology has also seen significant growth in recent years, with the industry size growing from 4 billion yuan in 2020 to 19 billion yuan in 2024. This industry background has also driven JiWu Intelligent's shipment volume growth. In the first three quarters of 2023, 2024, and 2025, its Siasun Robot & Automation sales volumes were 2,267 units, 4,178 units, and 4,704 units respectively, with a total of 11,152 units sold during the reporting period. JiWu Intelligent has achieved a breakthrough in revenue growth in the embodied intelligence industry, with continuously optimized gross profit margins verifying its business fundamentals. However, the sudden increase in asset impairment losses in the 2025 financial report has exposed the asset quality and customer credit risks behind its rapid expansion, leading to pressure on profit stability and bringing critical variables to its IPO valuation narrative. The company's revenue skyrocketed from 2.07 billion yuan in the fiscal year 2023 to 3.66 billion yuan in 2024, representing a year-on-year increase of 76.9%. Revenue in the first three quarters of 2025 had already reached 4.10 billion yuan, surpassing the total for the full year of 2024, indicating that its market penetration and commercialization are on an accelerated trajectory. During the same period, the gross profit margin increased steadily from 22.5% in 2023 to 32.1% in the first three quarters of 2025, indicating enhanced pricing capability or effective supply chain cost control, and the continuous expansion of the profit space for its core business. As the scale of revenue expands, the sales and distribution expense ratio and administrative expense ratio have been on a downward trend, reflecting the beginning of operating leverage and optimization of management efficiency with the increase in scale. In the first three quarters of 2025, the company recorded a high financial and contract asset impairment loss of 499 million yuan, accounting for 12.2% of the current period's revenue, a sharp increase from historical levels (about 2.5%-2.7%). This non-cash expense directly consumed nearly 200 million yuan of gross profit, leading to a drop in net profit margin from 8.9% in the fiscal year 2024 to 6.2%, significantly offsetting the positive effects of gross profit growth. In the first three quarters of 2025, JiWu Intelligent's operating cash flow was -3.51 million yuan, investment cash flow was -6.69 million yuan, financing cash flow was 20.29 million yuan, and cash and cash equivalents at the end of the period were 68.49 million yuan. Although profitable, the company's cash flow performance is not outstanding and heavily relies on financing. As of September 30, 2025, the company's current liabilities amounted to 890 million yuan, with contract liabilities accounting for 502 million yuan, while net current assets were only 187 million yuan. This "high liability, low net asset" structure relies on advance payments to support operations and implies a dual pressure of stable delivery performance and customer relationships. In this context, listing on the Hong Kong Stock Exchange becomes an important choice for JiWu Intelligent to alleviate financial pressure and support sustained development. Highly concentrated business model: systemic risks remain under dual vulnerabilities JiWu Intelligent's business structure exhibits a significant "double concentration" feature, with its highly focused customer and supply chain structures amplifying short-term operational efficiency while also posing systemic risks. This model is helpful in achieving resource focus and rapid breakthroughs in the early stages of company development, but as the company scales and capitalizes, its structural deficiencies become key bottlenecks in hindering steady growth and risk resilience. From a financial perspective, the company's customer concentration, while improved, still remains in a risky range. The revenue share of the top five customers decreased from 78.8% in 2023 to 63.2% in the first three quarters of 2025, indicating some progress in customer diversification. However, after the revenue share of the largest single customer dropped to 14.2% in 2024, it rebounded to 21.9% in the first three quarters of 2025, highlighting a grim reality: the company's business growth still heavily depends on the order fluctuations of a few core customers. This dependency creates three levels of structural risks: First, the amplifier effect of performance fluctuations. With a revenue share of over 95% in the clean energy technology sector, the company's operational performance has effectively become a derivative indicator of downstream investments by new energy companies. When the industry faces policy adjustments, changes in technological routes, or tightening financing environments, the expansion plans of key customers may be delayed or canceled, directly impacting the company's order volume and revenue recognition. Second, the hidden cost of limited bargaining power. The highly concentrated customer structure weakens the company's bargaining power in business negotiations. This is not only reflected in limited price elasticity but also in payment cycles, acceptance criteria, and technical service requirements. The high contract liabilities of 502 million yuan (56.4% of current liabilities) in the financial structure indicate that the company needs significant advance financing for production to maintain customer relationships, severely restricting the autonomy of cash flow. Third, the dilemma of dependency on the path of transformational innovation. When a company's resources serve the customized needs of a few major customers for an extended period, its research and development direction and product iteration may easily be limited by customer orientation, making it difficult to cultivate a standardized product system for a broader market. On the supply chain front, the company's procurement from the top five suppliers has been maintained in the range of 32.9%-40.9%, ensuring cost advantages and supply efficiency while also creating new risk transmission chains: In the Siasun Robot & Automation industry chain, core components such as high-performance servo motors, precision reducers, and special chips have high technological barriers. If a certain key component overly depends on a single supplier (with the largest supplier accounting for 14.5%), any interruption in supply due to capacity shortages, technological upgrades, or trade restrictions may directly lead to production stagnation in the short term. Against the backdrop of the current regional restructuring of global supply chains, this risk is shifting from a probability event to a systemic threat. Another aspect of high supply chain concentration is the relinquishment of bargaining power. When raw material prices fluctuate or suppliers undergo technological upgrades, the company faces a dilemma: either accept cost increases squeezing the already fragile gross profit margin (currently around 32%) or bear the certification period and quality risks brought about by changing suppliers. With sales costs accounting for 67.9%-77.5% of revenue from 2023 to 2025, this squeeze effect will be significantly magnified. At a deeper level, the risk lies in the possibility that the company's technological roadmap and the evolution of suppliers' products may be deeply intertwined. For example, if the algorithm optimization of the Siasun Robot & Automation operating system (JOS) is excessively adapted to a specific brand of sensor or actuator, the cost of technology migration will be high, potentially missing out on better technological solutions in a rapidly iterating industry. In conclusion, in an increasingly competitive industry landscape with accelerating technological innovations, whether JiWu Intelligent can effectively balance growth and risk under the scrutiny of the capital market, overcome the bottleneck of excessively high business concentration, and determine the path to realizing its long-term value will be crucial.