Qian'an Technology IPO Challenge! Hidden risks behind rapid growth

Source: IPO Daily

On March 27, the Beijing Stock Exchange Listing Committee reviewed the application for the listing of Shenzhen Qianan Technology Co., Ltd. (hereinafter referred to as “Qianan Technology”) for its public offering of shares. The company plans to publicly issue no more than 24.25 million shares, raising RMB 480 million. This is a 20% reduction from the initial filing of RMB 600 million, with Industrial Securities serving as the sponsor.

Although from 2023 to 2025, the company’s revenue grew from RMB 1.4 billion to RMB 1.981 billion, its net profit attributable to the parent company increased from RMB 96 million to RMB 220 million, and it achieved profit growth for three consecutive years, the prospectus and the regulatory inquiries show that Qianan Technology faces multiple risks, including heavy reliance on its sales platforms, issues with global tax compliance, doubts about the reasonableness of the use of proceeds, and post-issuance performance guidance reduction. These have become the focus of inquiries for this IPO.

Zhangli Illustration

Sustained growth

From 2023 to 2025 (hereinafter referred to as the “reporting period”), the company achieved operating revenue of RMB 1.400 billion, RMB 1.667 billion, and RMB 1.981 billion, with year-on-year increases of 19.09% in 2024 and 18.82% in 2025; net profit of RMB 96.4260 million, RMB 144.1868 million, and RMB 219.5066 million, with year-on-year increases of 49.53% in 2024 and 52.24% in 2025. During the reporting period, the company’s operating performance continued to grow.

During the same period, the company’s gross margin on its principal business was 39.88%, 41.51%, and 43.54%, respectively, rising steadily.

Qianan Technology is a cross-border e-commerce company engaged in the research, design, and sales of its own brand products. Its main sales markets are in Europe and the United States, and its main sales platform is Amazon.

Affected by industry characteristics and its business model, the company’s operating performance is easily influenced by factors such as international trade policy, sales platform policy, inventory management, international freight rates, and exchange-rate fluctuations. After the period, there is a certain degree of uncertainty and even the risk of decline in performance.

According to the prospectus, the company has multiple brands, and the product categories involved mainly cover four areas: art creation, digital electronics, sports and outdoors, and home and courtyard.

Specifically, the company’s art creation products are mainly based on the Ohuhu brand and mainly include drawing accessories such as drawing pens, sketch pads, and drawing easels. The digital electronics products are mainly based on the iClever brand and the Tribit brand. Within the iClever brand, the main product series include children’s headphones, keyboards and mice, and other products. Within the Tribit brand, the main product series include Bluetooth speakers, headphones, and other products. Sports and outdoors products are mainly based on the Sportneer brand, and mainly include training equipment, outdoor goods, and bicycle accessories, covering everyday outdoor sports and fitness scenarios such as fitness training, camping and hiking, and cycling training. The company’s home and courtyard products are mainly based on the Ohuhu brand and mainly include courtyard supplies, home supplies, and so on.

The figure shows the company’s digital electronics products

Dependence on Amazon exceeds 85%

It should be noted that from 2023 to 2025, the proportion of revenue from the four areas to total revenue will vary across different years.

In the latest period, the company’s largest source of revenue is art-creation-category products mainly based on Ohuhu brand drawing pens, contributing about 41.58% of revenue, with a gross margin as high as 50.15%.

Of note is that the company’s主营业务 revenue all comes from overseas.

During the reporting period, the proportion of overseas revenue to revenue from its principal business was 99.56%, 99.57%, and 99.68%, respectively. Sales markets mainly include countries and regions such as the United States, Canada, and Europe. Among them, the proportion of principal business revenue derived from the U.S. region was 53.08%, 51.01%, and 51.40%, respectively.

The company mainly sells through a B2C model combining third-party e-commerce platforms mainly centered on Amazon (Amazon) and its own websites. In this model, the proportion of sales revenue exceeds 90%, making it the company’s most important sales model.

Among these, the Amazon platform plays a key role and is the company’s most important sales platform.

During the reporting period, the proportion of sales revenue achieved through the Amazon platform to revenue from its principal business was 93.42%, 90.30%, and 85.55%, respectively, indicating high concentration. It shows multiple concentration risks of a single platform and a single market.

Frequent global tax violations

The reporter’s review found that during the reporting period, Qianan Technology and its overseas subsidiaries were cumulatively penalized 16 times by tax authorities in multiple countries—including Germany, France, the United States, the United Kingdom, and Canada—due to issues such as tax underpayment payments, delayed filings, insufficient payments, and label compliance.

Relevant authorities required the company to make back payments of taxes, late payment surcharges, and fines, covering multiple tax categories including value-added tax, sales taxes, corporate business taxes, and federal tax obligations.

Among them, the German tax authorities pursued VAT underpayment and late payment surcharges from the company and its Hong Kong subsidiary for input VAT deduction deficiencies for the fiscal years 2019 to 2020. The late payment surcharges alone amounted to as much as EUR 158,200.

Regarding this high late payment surcharge of EUR 158,200, Qianan Technology stated that it was due to a dispute with the German tax authorities caused by insufficient material submission by the European tax agent originally cooperating with the company and its subsidiaries. In fact, the late payment surcharges totaling EUR 52,900 were generated at the notification time when the German tax authorities issued notice in 2023. Later, the company raised objections and communicated multiple times with the German tax authorities during 2024, but ultimately the overdue amount of the late payment surcharges kept increasing, growing to EUR 158,200. The company has already paid it off.

Although these penalty notices do not meet the standard of “major” illegal and noncompliant conduct, and although the company attributes the cause to poor performance by overseas agents and errors in sales scale forecasts, such frequent cross-border tax noncompliance directly indicates systematic deficiencies in the company’s global finance and tax internal-control system and compliance management. After listing, the company will still face compliance rectification and potential back-payment risks.

Dividends and cash replenishment

In this IPO, Qianan Technology plans to raise RMB 480 million. The proceeds will be allocated to the product development center construction project, the supply chain and operations center system construction project, the brand building and channel promotion project, and supplementary working capital.

Among these, RMB 86.0 million will be used to supplement working capital.

In fact, the company has ample cash and cash equivalents. During the reporting period, at the end of each period, the company’s cash and cash equivalents were RMB 164.8270 million, RMB 290.1314 million, and RMB 384.5997 million, respectively. During the reporting periods, the net cash flows generated from operating activities were RMB 207.2064 million, RMB 171.8749 million, and RMB 229.8178 million, respectively, with continuous inflow. By the end of 2025, the asset-liability ratio was only 26%, and the cash flow on the books was healthy.

Against this backdrop, in recent years, the company has paid cash dividends of nearly RMB 60 million. During the reporting period, the company made distributions based on profits for fiscal years 2022 to 2024, distributing RMB 10.0 million, RMB 20.0 million, and RMB 29.9730 million in cash dividends to shareholders, respectively.

What is worth cautioning is that the company’s performance forecast for Q1 2026 has already “changed its tune”: it expects revenue to increase year over year by 4.31%–10.00%, but net profit attributable to the parent company to decline year over year by 10.13%–17.41%. The trend of more revenue but not more profit is clear, and its growth potential and profitability stability face challenges.

Overall, although Qianan Technology meets the financial indicators, its prominent concentration risks and compliance issues raise questions. Whether it can get approved at the meeting will depend on whether it provides sufficiently robust disclosure and commitments regarding internal control rectification, risk mitigation, and the sustainability of its performance.

Tomorrow, the review result will directly determine whether this cross-border e-commerce “dark horse” can enter the capital market, and it will also provide an important regulatory reference for IPOs of similar companies.

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责任编辑：杨红卜