New stock preview | Zhi Zu Internet of Things: From "stopping the bleeding" to "creating blood", three financial hills need to be crossed.

At the key node where the light electric vehicle battery-swapping track accelerates from "a hundred schools of thought contending" towards an oligopoly, Zhizu IoT Technology Group Co., Ltd. (referred to as "Zhizu IoT") officially submitted its application for listing on the Hong Kong Stock Exchange main board, intending to impact the capital market as the fourth in the industry. This service provider, with its brand "Zhizu Battery Swapping" and a network of over 90 battery swapping stations in more than 90 cities serving 7 million registered users, is attempting to find a balance between scale and profitability in the billion dollar energy replenishment market with its integrated model of "heavy asset operation + light asset franchise". From a financial performance perspective, Zhizu IoT has shown a trend of profit recovery after experiencing "increased revenue but not increased profit" during the reporting period. From 2023 to 2025, the company's revenue steadily increased from 696 million yuan to 739 million yuan, but the growth rate has significantly slowed to around 0.5%. At the same time, benefiting from cost optimization brought about by self-developed battery alternatives and AI scheduling, the company's gross profit margin leaped from 14.1% to 26.6%, successfully turning from a net loss of 44.61 million yuan to a net profit of 8.16 million yuan. In the backdrop of the industry's "one superpower and many strong competitors" competitive landscape and frequent price wars, whether Zhizu IoT can break through its growth bottleneck with its technological and scale advantages, its path to listing will undoubtedly provide an important reference for the commercial prospects of the two rounds of battery swapping industry. After the "hemostasis", there are still three financial bottlenecks to cross Observing, Zhizu IoT has indeed completed a crucial financial "hemostasis" process from deep losses to weak profitability, which is a commendable financial turning point. However, stopping the bleeding does not mean restoring health. Stagnant revenue growth, high financing costs, and continued decline in R&D investment correspond to the company's market expansion capabilities, financial structure security, and long-term technological competitiveness. If substantial breakthroughs are not made in at least one of these bottlenecks within the next one to two years, the current state of marginal profitability is likely just a long financial buffer period, rather than a truly sustainable starting point for growth. The prospectus shows that from a substantial loss of 44.61 million yuan in 2023, Zhizu IoT achieved weak profitability in 2024 and 2025, it has completed a key "hemostasis" at the financial level over the past three years. This transformation was primarily driven by structural repair at the gross profit end: the gross profit margin jumped from 14.1% in 2023 to 27.0% in 2024, although it slightly declined to 26.6% in 2025, it was far higher than in the loss years. This significant increase in gross profit can only come from a substantial decrease in unit costs, as revenue has almost not increased. Although the turning of profits to positive is only the first test of survival. With revenue growth nearly stagnant (increasing by only 0.55% to 739 million yuan in 2025), and a net profit margin still below 1.2%, in order for Zhizu IoT to achieve sustainable and high-quality profitability, it must cross three critical financial bottlenecks step by step. The first bottleneck is the reactivation of revenue growth momentum. In 2024, revenue still had a growth rate of 5.6% compared to the previous year, but in 2025, there was almost zero growth, which is a dangerous signal for a company that has just turned a profit. Without the support of revenue scale, further increasing the gross profit will be unsustainable; meanwhile, fixed costs such as sales, management, and financing costs are difficult to compress simultaneously. Although the sales and marketing expenses decreased in 2025 compared to 2024, they were still higher than in 2023, and the stagnation of revenue actually pushed up the sales expense ratio. If the company cannot restart revenue growth through market expansion, new business implementations, or product structure upgrades, the current state of marginal profitability will soon be consumed by rising marginal costs. The second bottleneck is the continuous erosion of profits by financing costs. Zhizu IoT's financing costs have steadily increased from 41.75 million yuan in 2023 to 49.75 million yuan in 2025, a cumulative increase of 19% over three years, while the pre-tax profit for the whole of 2025 was only 15.18 million yuan. In other words, without interest burden, the company's pre-tax profit for the year could exceed 65 million yuan. This high-leverage operating model can be sustainable during an upward revenue cycle, but in the context of revenue stagnation and a high external interest rate environment, financial expenses have become the primary factor eating away at core operating results. The third bottleneck is the balance between research and development investment and long-term competitiveness. From 2023 to 2025, research and development spending has continuously decreased from 44.94 million yuan to 29.89 million yuan, a cumulative decrease of over 33%. For a company with "IoT" as a technological label, the long-term contraction of research and development expenses may improve the profit on the books in the short term, but it may come at the cost of sacrificing product iteration capabilities and technological barriers. In the smart IoT industry, technology updates are rapid, and customer expectations for efficiency and data services are constantly increasing. If research and development investment remains low for an extended period, the company will not only find it difficult to expand high-value-added business, but may also lose market share in the medium to long term competition, ultimately rebounding on the currently fragile profit base. Bargaining quality for quantity: the growth dilemma of doubling users but stagnant revenue A deeper analysis of Zhizu IoT's business structure reveals that its turnaround is not balanced growth, but highly dependent on the scale expansion and cost optimization of its core business line of self-operated battery swapping solutions. The company's growth logic is clear: rapid growth in paying user numbers in exchange for the basic revenue scale, while lowering unit costs through refined operations to increase gross profit. However, this model is facing a dual test of continuously declining average revenue per user (ARPU) and stagnant revenue growth. The core business of self-operated station battery swapping solutions is the absolute pillar of Zhizu IoT. From 2023 to 2025, the revenue of this business increased slightly from 693 million yuan to 733 million yuan before falling back to 715 million yuan. The significant changes lie in the number of paying users and ARPU. The number of paying users surged from 930,000 in 2023 to 1.99 million in 2025, more than doubling over three years with a compound annual growth rate of over 46%. In contrast, ARPU plummeted from 744.5 yuan to 359.5 yuan, a cumulative decrease of over 51% in three years. This is a typical "quantity-for-price" model. From the perspective of gross profit performance, this strategy has achieved temporary success. The gross profit from self-operated station battery swapping solutions rose sharply from 96.32 million yuan in 2023 to 198 million yuan in 2024, nearly doubling, and the gross profit margin rose from 13.9% to 27.0%. Although the gross profit in 2025 slightly decreased to 191 million yuan, the gross profit margin remained high at 26.7%. With revenue almost stagnant, the significant increase in gross profit can only come from a substantial decrease in unit costs. Combining the doubling of user numbers with stagnant revenue, it can be inferred that the company significantly lowered the operational costs of single stations or the efficiency of fixed assets such as batteries in 2024 and 2025, potentially due to lower margin service costs as user density increases. However, a key issue arises: with ARPU continually declining significantly while the gross profit margin remains stable, it indicates that the speed of cost reduction may even exceed the rate of price reduction. While this cost control capability is commendable, from a financial logic standpoint, it cannot be sustained indefinitely. What needs to be highly alert to is that in 2025, despite the growth of paying users by 49%, the company's total revenue only increased by a marginal 0.55% compared to the previous year. In other words, the company obtained less than 0.6% revenue growth with nearly 50% user growth, indicating a very low marginal conversion efficiency. Financially speaking, the average contribution of new users is very weak, and a large number of users may choose the lowest frequency or lowest price service packages. If these users do not perform well in retention and renewal rates, future user growth will also be unsustainable.