Ji'an Smart Products Unit Price Continues to Decline: Gross Profit Margin Below Industry Peers, Giving Dividends with One Hand and Replenishing Liquidity with the Other

Ask AI · Will insufficient R&D investment restrict the company’s technological upgrades?

“Harbor Business Observer” by Shi Zifu

By the end of December 2025, Guangdong Jiuan Intelligent Technology Co., Ltd. (hereinafter referred to as Jiuan Intelligent) submitted its application for the Growth Enterprise Market, with Shenwan Hongyuan Securities as the sponsor.

In January 2026, Jiuan Intelligent was selected by the China Securities Association for on-site inspection as one of the first batch of companies to go public in 2026.

1

Continuous decline in product prices, gross margin lower than peers

Tianyancha shows that Jiuan Intelligent was established in 2007. The company is a manufacturer of intelligent visual products, an IoT operation service provider, and an IoT technology solution provider, focusing on visual imaging and analysis technology, wireless transmission technology, IoT platform technology, and AI visual application models. It independently researches, develops, produces, and sells intelligent hardware products, and utilizes an IoT cloud platform to provide operational services, building an integrated model of “hardware + platform + services.”

The company’s main business is the production and sales of intelligent camera modules, terminals, and supporting equipment, while also providing operational services such as data traffic packages, cloud storage, AI services, and advertising services.

From 2022 to 2024 and for January to June 2025 (hereinafter referred to as the reporting period), the company’s revenue from intelligent hardware was 453 million yuan, 594 million yuan, 684 million yuan, and 258 million yuan, accounting for 93.64%, 92.06%, 87.68%, and 79.97% of the main business revenue during the respective periods, contributing as the main source of income.

From 2022 to 2024, the increase in sales revenue from intelligent hardware products was mainly due to the continuous increase in sales volume of the company’s products. In January to June 2025, the company’s intelligent hardware sales revenue decreased, mainly due to India’s implementation of the STQC product certification policy for imported products, which temporarily impacted the sales to Indian customers before the completion of product certification. As of now, the certification work has achieved phased results, and some products for Indian customers have completed STQC certification, resulting in a month-on-month recovery in sales to Indian customers since July 2025.

During the reporting period, operational services generated revenue of 30.75 million yuan, 51.18 million yuan, 96.02 million yuan, and 64.63 million yuan, accounting for 6.36%, 7.94%, 12.32%, and 20.03% of the main business revenue during the respective periods. As the company’s hardware product sales increased, the number of end users grew, correspondingly enhancing operational service revenue.

In terms of sales revenue from intelligent hardware, the revenue share of module products was 61.64%, 52.9%, 50.04%, and 58%. From 2022 to 2024, revenue from module products continued to grow. In January to June 2025, affected by market competition, both sales volume and revenue decreased.

On the other hand, the share of terminal products was 38.36%, 47.1%, 49.96%, and 42%, continuing to grow. However, the average price of terminal products during each period was 1.4327 million yuan, 1.3195 million yuan, 1.0961 million yuan, and 1.0746 million yuan. Due to price reductions and a decrease in the sales proportion of higher-priced products, the average selling price has decreased.

Overall performance during the reporting period showed that Jiuan Intelligent achieved revenue of 484 million yuan, 645 million yuan, 780 million yuan, and 323 million yuan, with net profits of 34.03 million yuan, 85.95 million yuan, 102 million yuan, and 44.79 million yuan, and net profits attributable to the parent company after deducting non-recurring gains and losses of 43.92 million yuan, 97.64 million yuan, 102 million yuan, and 44.26 million yuan. The net profit margin was 7.03%, 13.33%, 13.1%, and 13.88% respectively.

Due to the decline in product prices, the company’s gross margin decreased in 2024. During the reporting period, the gross margin of the main business was 24.58%, 32.02%, 29.55%, and 33.17%, while the overall gross margin was 24.58%, 32.02%, 29.55%, and 33.17%, showing a trend of rising first and then falling.

At the same time, the comprehensive gross margin of comparable companies in the industry is approximately in the range of 30%-40%, indicating that Jiuan Intelligent’s gross margin is slightly lower than the average of comparable companies during the same period.

2

Volatility in R&D expense ratio, significantly weaker than peers

However, while revenue scale steadily increased, Jiuan Intelligent’s cash flow performance diverged from profit.

At the end of each period in the reporting period, the company’s net cash flow from operating activities was 38.18 million yuan, 57.09 million yuan, 35.53 million yuan, and 82.39 million yuan respectively. In 2024, the net cash flow from operating activities significantly decreased by 37.76% compared to the previous year.

The company stated that during the reporting period, the sales cash collection ratio was relatively stable, and collections were good. In 2023 and 2024, the net cash flow from operating activities was less than net profit, mainly due to the growth in the company’s revenue scale, which led to a significant increase in operating receivables, prepayments, and inventory.

Specifically, at the end of each period in the reporting period, the company’s inventory book value was 56.65 million yuan, 87.17 million yuan, 131 million yuan, and 149 million yuan, accounting for 25.14%, 27.47%, 27.45%, and 31.87% of current assets at the end of each period; the inventory book balance was 59.19 million yuan, 90.27 million yuan, 137 million yuan, and 156 million yuan, with inventory impairment provisions of 2.55 million yuan, 3.10 million yuan, 5.36 million yuan, and 7.08 million yuan.

At the end of each period in the reporting period, the company’s accounts receivable book value was 85.10 million yuan, 131 million yuan, 170 million yuan, and 124 million yuan; the accounts receivable balance was 89.67 million yuan, 138 million yuan, 183 million yuan, and 138 million yuan, accounting for 18.53%, 21.43%, 23.53%, and 21.39% of operating revenue during the respective periods; the accounts receivable turnover rate was 5.68 times, 5.66 times, 4.85 times, and 4.01 times.

In its pursuit of going public on the Growth Enterprise Market, Jiuan Intelligent’s R&D investment has also attracted much attention.

During the reporting period, Jiuan Intelligent’s R&D expenses were 37.66 million yuan, 58.33 million yuan, 46.17 million yuan, and 25.77 million yuan respectively, accounting for 7.78%, 9.04%, 5.92%, and 7.99% of the operating revenue during the respective periods.

During the same period, the average R&D expense ratio of comparable companies was 13.2%, 13.5%, 13.45%, and 15.28%, indicating that Jiuan Intelligent’s R&D expense ratio is significantly lower than the average level of comparable companies.

The company explained that during the reporting period, its level of R&D investment was lower than that of comparable companies in the industry, mainly due to factors such as company size, R&D strategy, and regional average salaries, which resulted in the employee compensation for R&D being lower than that of comparable companies.

Song Xiangqing, vice president of the China Business Economics Association, stated that Jiuan Intelligent’s R&D expense ratio being significantly lower than the average of comparable companies will directly weaken its ability for technological iteration and new product development, potentially leading to a decline in product competitiveness, limitations in high-end market expansion, and a long-term risk of technological lag and profit margin squeeze. During the IPO review on the Growth Enterprise Market, this indicator will be a focal point for inquiries regarding technological innovation attributes and continuous innovation capabilities. If the differences cannot be reasonably explained and technological advantages demonstrated, it may affect the review process and market valuation, and also raise investor concerns about the company’s long-term growth potential and risk resistance.

3

While distributing dividends, also replenishing liquidity, there were previously shareholding entrustment behaviors

In this IPO, the company plans to use the raised funds of 1.064 billion yuan, of which 914 million yuan is for Jiuan Intelligent’s R&D manufacturing and headquarters base project, and 150 million yuan is for replenishing liquidity.

In 2022 and 2023, Jiuan Intelligent completed two cash dividend distributions, amounting to 37 million yuan and 20 million yuan respectively. With a total cash dividend of 57 million yuan, the company plans to use 150 million yuan of the raised funds to supplement liquidity in this IPO. This operation of “distributing dividends with one hand and replenishing liquidity with the other” has undoubtedly raised considerable skepticism in the market.

As of the signing date of the prospectus, the company’s controlling shareholder and actual controller is Li Yuan. Li Yuan directly holds 66.04% of the company’s shares and indirectly controls an additional 8.25% of the company’s shares by serving as the executive partner of Guangzhou Haiquan and Guangzhou Gaozhimei. Before this issuance, Li Yuan controlled a total of 74.29% of the company’s shares through direct and indirect holdings.

In terms of internal control, historically, there have been instances where shares were held on behalf of Li Yuan by Yang Weidong, Xiao Wangxi, Xiao Jun, and Jin Zhiming.

In January 2007, Jiuan Limited was established. In April 2009, Jiuan Limited conducted its first equity transfer, where Yang Weidong transferred 55% of the company’s registered capital, totaling 275,000 yuan, to Miao Bo for 275,000 yuan; Xiao Wangxi transferred 25% of the company’s registered capital, totaling 125,000 yuan, to Miao Bo for 125,000 yuan; Xiao Wangxi transferred 10% of the company’s registered capital, totaling 50,000 yuan, to Xiao Jun for 50,000 yuan. In the same month, Jiuan Limited completed the industrial and commercial change registration for this equity transfer.

The background of this equity transfer was to gradually release the shareholding entrusted to Yang Weidong and Xiao Wangxi by transferring part of the shares to Li Yuan’s spouse, Miao Bo, and part of the shares to be held on Li Yuan’s behalf by Xiao Jun. Li Yuan entrusted Yang Weidong and Xiao Wangxi to transfer the 275,000 yuan and 125,000 yuan of registered capital of Jiuan Limited held on his behalf to Miao Bo; Li Yuan entrusted Xiao Wangxi to transfer the 50,000 yuan of registered capital of Jiuan Limited held on his behalf to Xiao Jun, who would hold this part of the shares on behalf of Li Yuan.

Jiuan Intelligent also emphasized that as of the signing date of the prospectus, all relevant shareholding entrustments have been legally dissolved, and the aforementioned shareholding entrustments and restorations reflect the true intentions of all parties involved, with no disputes or potential disputes. Except for the above situations, there are no other instances of shareholding entrustment in the company’s historical evolution. The issuer does not have any conditions that affect the clarity, stability, and identification of actual controllers of the company’s shares. (Produced by Harbor Finance)