The "Chaoshan tycoon" behind the "Tap to Pay" service is gearing up for an IPO, with Xiaomi, Meituan, and Ant Group all making bets.
The Chaoshan region has never been short of legends: Ma Huateng founded the Tencent Empire, Huang Guangyu wrote the myth of Gome, Chen Huawen made M&G stationery a common sight on millions of desks, and Chen Kaixuan placed Liby's daily chemical products on the shelves of countless stores. Entrepreneurs nurtured in this land always possess a daring and enterprising spirit.
Now, another Chaoshan entrepreneur, Lin Zhe, is leading his company, Sunmi Technology, to knock on the door of the capital market. Shanghai Sunmi Technology Group Co., Ltd. (hereinafter referred to as "Sunmi Technology") is a provider of business Internet of Things (BIoT) solutions, specializing in intelligent commercial devices. From cash register and accounting in small street shops to scenarios such as "tap-to-pay" and face-scanning payment, all can be easily achieved through its devices.
Image source: "Prospectus"
Currently, he has led Sunmi Technology to submit a "Prospectus" to the Hong Kong Stock Exchange. Behind it, there are three giants, Xiaomi, Meituan, and Ant Group, strongly betting on the company. Moreover, the customer list includes many well-known brands such as Xibei, HotMaxx, and Guming.
However, the IPO path of this company favored by capital has not been smooth. In 2021, when it attempted to list on the Science and Technology Innovation Board, the company quietly withdrew its application after two rounds of inquiries. So, can the company achieve its goal by turning to the Hong Kong stock market now? The capital report card of this Chaoshan entrepreneur is waiting to be reviewed by the market.
Annual revenue of 3.5 billion yuan for IPO, with customers including Xibei, HotMaxx, and Guming
Since its establishment in 2013, Sunmi Technology has quickly carved out a niche in the global market with its unique business Internet of Things (BIoT) solutions. In terms of revenue in 2024, Sunmi Technology is currently the world's largest provider of Android-based BIoT solutions, accounting for more than 10% of the market share.
However, Sunmi Technology's revenue has not been on a continuous upward trajectory. From 2022 to 2024, the company's revenue fluctuated, reaching 3.404 billion yuan, 3.07 billion yuan, and 3.456 billion yuan respectively. Net profit also fluctuated accordingly, standing at 160 million yuan, 101 million yuan, and 181 million yuan respectively.
Despite the overall fluctuations in performance, the gross profit performance is still remarkable. Gross profit increased by 21.5% from 821 million yuan in 2023 to 997 million yuan in 2024, and the gross profit margin also rose from 26.7% in 2023 to 28.9% in 2024.
From the perspective of the revenue structure, the company's business mainly consists of two major segments: intelligent device sales and PaaS platform and customized services. The former includes hardware devices such as POS machines and self-service cash registers, while the latter provides cloud services and backend support for these devices.
Image source: "Prospectus"
From 2022 to 2024, Sunmi Technology's revenue mainly came from intelligent hardware devices. The revenue generated by this business was 3.389 billion yuan, 3.008 billion yuan, and 3.438 billion yuan respectively, accounting for more than 98% of the total revenue. In contrast, the contribution of the PaaS platform was negligible, accounting for only 0.5% of the revenue in 2024, approximately 18.38 million yuan.
Sunmi Technology has a wide customer base. Well-known domestic catering and retail brands such as Xibei, HotMaxx, and Guming, and international food delivery platforms such as Keeta (Meituan's overseas version), Uber Eats, and Grab have all become long-term partners of Sunmi Technology.
However, as the order demands of these large customers gradually increase, the issue of customer concentration at Sunmi Technology has gradually emerged. From 2022 to 2024, the revenue from the top five customers accounted for 42.3%, 28.8%, and 41.1% respectively. The revenue share of the largest customer in these three years was 19.3%, 16.5%, and 22% respectively.
Bai Wenxi, the deputy director of the China Enterprise Capital Alliance, pointed out that the company has a relatively high proportion of sales revenue from the top five customers. If the order demands of the major customers decrease, or if the company fails to expand new customer resources in a timely manner, it will directly affect the performance.
Image source: "Prospectus"
In addition, the number of customers of Sunmi Technology in the global market has shown a downward trend. From 2022 to 2024, the number of the company's customers decreased from 2,506 to 2,262. The phenomenon of customer loss cannot be ignored.
On the other hand, Sunmi Technology's OEM model in the production mode, although effectively reducing production costs, has also raised questions in the market.
Especially when the company attempted to list on the Science and Technology Innovation Board in 2021, the Shanghai Stock Exchange repeatedly inquired about its OEM model, focusing on how its core technology is applied in OEM production and whether it is dependent on major OEM suppliers.
However, Sunmi Technology responded that the concentration of OEM suppliers is relatively low, and the procurement amount from any single supplier did not exceed 50% of the total procurement amount in the same period.
Currently, Sunmi Technology still relies on the OEM model. In 2024, more than 92% of Sunmi Technology's products were produced by OEM factories. This model also poses certain challenges to the company in terms of product quality control. The company also warned that Sunmi Technology relies on a limited number of OEM and ODM suppliers to produce hardware devices. If it fails to effectively control these suppliers continuously, it may lead to problems such as production delays, unstable quality, or supply chain disruptions, which will in turn affect operational efficiency and customer satisfaction.
Xiaomi and Meituan's bets, the entrepreneurial history of the "Chaoshan tycoon"
Despite the concerns about Sunmi Technology's OEM model and high customer concentration, the capital market's favor for it has never wavered. Since 2014, Sunmi Technology's financing journey has been smooth sailing.
In 2014, the company completed a Series A financing of 80 million yuan jointly invested by Xiaomi Venus Venture Capital, Shenzhen Capital Group, and natural person Hu Zemin. Subsequently, in 2015, Sunmi Technology completed a Series B financing of 200 million yuan, with investors including Dianping, Venus Venture Capital, and Shenzhen Capital Group.
In June of the same year, Weidian added another 100 million yuan in Series B+ investment to Sunmi Technology. Since then, Sunmi Technology's financing pace has been even more rapid.
In September 2017, China Minsheng Investment and Lightspeed China jointly invested 100 million yuan, and in 2019, Ant Technology led the investment, followed by ABC International, completing a Series D financing of hundreds of millions of yuan.
Image source: Canstock
In April of the same year, Ant Technology injected another 1.188 billion yuan into Sunmi Technology through equity transfer and capital increase. This series of financings pushed Sunmi Technology's valuation to over 1 billion US dollars (approximately 7.3 billion yuan in RMB), successfully enabling it to join the unicorn club.
The success of Sunmi Technology is inseparable from a key figure - Lin Zhe. As the executive director, chairman, and general manager of Sunmi Technology, Lin Zhe's entrepreneurial journey is truly legendary.
Lin Zhe is a serial entrepreneur. He graduated from Shantou Tuobin Vocational School in July 1994. In 1996, at the age of 21, he acutely discovered the gap in the domestic POS machine market and founded Guangdong Chuantian Technology Co., Ltd. (hereinafter referred to as "Chuantian Technology"), launching China's first privately - owned POS machine, which was only one - tenth the price of imported equipment.
In order to enhance competitiveness, Lin Zhe studied in Europe. In 2006, he led Chuantian Technology to win the German iF International Design Award (Computer Category). However, the short industrial chain of POS machines and the lack of potential for subsequent development made Lin Zhe realize the urgent need to seek new breakthroughs.
According to an exclusive interview with Lin Zhe by the new media "Entrepreneurial Cat", Lin Zhe at that time thought, "Is it possible to connect surrounding consumers and surrounding stores through a platform?"
Image source: Canstock
So, in 2013, Lin Zhe founded Shanghai IYou Information Technology Co., Ltd., started to layout the O2O intelligent hardware system, and launched the "IYou Food Delivery" platform. The platform quickly attracted a large number of industry talents. Within half a year, the number of merchants exceeded 6,000, successfully ranking among the second - tier in the market.
In 2014, "IYou Food Delivery" won the favor of investors such as Xiaomi. However, in the face of the capital war among giants like Meituan and Ele.me, Lin Zhe made a major decision - to abandon the valuation of hundreds of millions of the food delivery platform and transform into an intelligent hardware enterprise, becoming a "shovel seller".
At that time, Lin Zhe believed that if it was impossible to become a member of the first - tier during the boom period, it would be better to consider changing the strategy and providing support to companies in the first - tier.
He said, "After Sunmi's transformation, our resources, including investors, the team, concepts, products, software and hardware operating systems, etc., are all in the first - tier, quickly turning our deficiencies and disadvantages into advantages."
In 2015, "IYou Food Delivery" completed its transformation from O2O to intelligent hardware. The food delivery order - taking device launched by the company quickly occupied the Android POS machine market and became the market leader within three months.
In 2016, "IYou Food Delivery" was officially renamed "Sunmi Technology" and fully entered the business Internet of Things field. The previously launched food delivery order - taking device successfully enabled the company to achieve an annual revenue of 100 million yuan.
Image source: Canstock
Now, Sunmi Technology's equity structure adopts the dual - class share structure. Lin Zhe controls 100% of Class A shares and 15.78% of Class B shares, firmly remaining the controlling shareholder. Among the Class B shares, Ant Group holds 37.56%, Meituan and Xiaomi hold 11.29% and 10.72% respectively, and Shenzhen Capital Group holds 9.48%.
As a Chaoshan native, Lin Zhe is very proud of his hometown. He believes that Chaoshan people pay great attention to credit and is full of confidence in the future of Chaoshan. He said that changing Chaoshan is not limited to the local area. The influence of Chaoshan spreads all over the world, and the reputation of Chaoshan comes from the contributions of Chaoshan elites around the world to the entrepreneurial spirit and career breakthroughs.
Now, Sunmi Technology failed in its previous attempt to list on the Science and Technology Innovation Board and is now knocking on the door of the Hong Kong stock market. Can Lin Zhe lead Sunmi to turn the "tick - tock" sound of intelligent cash registers into the "final gong" in the capital market?
This article is from the WeChat official account "Wild Horse Finance", author: Liu Junqun, editor: Liu Qinwen, published by 36Kr with permission.