Lingyi Intelligent Manufacturing: Concerns Behind Performance Growth and Strategic Shift

ZC Asia has learnt that Lingyi Intelligent Manufacturing has recently resubmitted its listing application to the Hong Kong Stock Exchange. This marks the company's second attempt following its unsuccessful initial push for a Hong Kong listing in 2021. Positioning itself as the ‘world's leading AI hardware intelligent manufacturing platform’ and presenting financial data showing revenue of RMB 37.59 billion for the first three quarters of 2025 alongside a 37.66% year-on-year increase in net profit, the company aims to capture the capital market's attention amid the AI concept boom. Yet beneath this glossy façade, the profound challenges of its business transformation and the true intentions behind its capital operations warrant thorough market scrutiny.

Shift in Capital Operation Path

While advancing its Hong Kong IPO, Lingyi Intelligent Manufacturing significantly adjusted its capital strategy. The company originally planned to acquire a 66.46% stake in Jiangsu Keda Stern Automotive Technology Co., Ltd. through a combination of convertible bond issuance and cash payment. This proposal received approval from the Shenzhen Stock Exchange in August 2025.

However, in November 2025, Lingyi Intelligent Manufacturing voluntarily withdrew this major asset restructuring application, opting instead for a pure cash acquisition to complete the transaction. This shift means the deal no longer constitutes a major asset restructuring, thereby bypassing the corresponding review process. The company officially attributed this move to considerations of ‘the current market environment and capital operation planning’. However, market analysts suggest this may reflect the company's cautious assessment of the prevailing A-share refinancing market conditions.

Significant Pressure on Profitability

Although the company achieved operating revenue of RMB 37.59 billion and net profit of RMB 1.941 billion in the first three quarters of 2025, representing a year-on-year increase of 37.66%, a longer-term perspective reveals concerning instability in its profitability.

In-depth analysis reveals that the company's gross profit margin has declined steadily from 19.8% in 2022 to 14.4% in 2024, representing a cumulative decrease of 5.4 percentage points over three years. More notably, while revenue grew by 29.59% year-on-year in 2024, the company experienced a situation where increased revenue did not translate into increased profits. From 2019 to 2024, Lingyi Intelligent Manufacturing's net profit fluctuated within the range of RMB 1.18 billion to RMB 2.266 billion, failing to achieve sustained breakthroughs.

Business Structure Concerns Emerge

During the reporting period, revenue from the company's top five clients rose from 49.1% in 2022 to 56.4% in the first three quarters of 2025, indicating a continuous increase in customer concentration.

Another distinctive phenomenon is the significant overlap between the company's clients and suppliers. During the first three quarters of 2025, four of the top five clients were concurrently suppliers to the company, with revenue generated from these relationships accounting for approximately 47% of total income. While such complex business ties may foster synergies, they also heighten operational complexity and introduce potential related-party transaction risks.

Facing profitability pressures in its core business, Lingyi Intelligent Manufacturing is actively pursuing new growth avenues. The company has recently prioritised expansion into the embodied robotics sector, claiming to have mastered core execution-level technologies including servo motors, reducers, drivers, and motion controllers. It further asserts R&D and mass production capabilities for key components such as robotic chassis, dexterous grippers, and joint modules.

Disclosures indicate the company has entered strategic partnerships with multiple leading enterprises in North America and domestically, though specific client details remain undisclosed under confidentiality agreements. Proceeds from this H-share listing will partially fund R&D and production capacity enhancements in emerging domains including high-density AI computing servers, humanoid robot hardware, and assembly.

Lingyi Intelligent Manufacturing's second attempt at a Hong Kong IPO epitomises the transformation and upgrading of China's manufacturing enterprises. Against a backdrop of slowing growth in traditional businesses, leveraging capital markets to explore new avenues has become an inevitable choice. However, the technological barriers and market competition within the AI hardware sector should not be underestimated, while the management complexities of global operations and geopolitical risks demand careful navigation.

For investors, it is essential to look beyond the superficial appeal of the AI concept and conduct a thorough analysis of Lingyi Intelligent Manufacturing's actual competitiveness across its business segments, the genuine calibre of its technological reserves, and the practical effectiveness of its global management. Only by demonstrating solid progress in these fundamental areas can the company truly earn long-term market recognition and avoid falling into the developmental trap of ‘expansion-loss-refinancing’.

Disclaimer: The content herein is for reference only and does not constitute any form of investment advice. Should any information contained herein prove inaccurate, incomplete, or potentially misleading, please refer to the company's official announcements. Market risks exist; investment requires caution.