Huawei-backed ‘automotive parts unicorn’ Kaishi Times targets Hong Kong listing: GMV of 7.6 billion yuan fails to mask losses, with gross margin for its premium product line at just 3.1%

ZC Asia has learnt that Kaishi Times, a digitalisation platform founded by a team of former Huawei executives, has recently formally submitted its listing application to the Hong Kong Stock Exchange.

Founded in 2015, Kaishi Times is headquartered in Longgang, Shenzhen. Founder, Chairman and CEO Jiang Yongxing, aged 47, has 15 years of experience at Huawei, having previously served as General Manager of the Mobile Transmission Product Line; co-founder and CTO Yang Shangfu, and Executive Director Zhang Wei also possess technical and managerial backgrounds from Huawei and Foxconn. This ‘Huawei-affiliated’ team has injected a digital DNA into the traditional automotive parts distribution sector, creating a digital and intelligent platform covering the entire F2B2B2C supply chain.

Leveraging its first-mover advantage and technological investment, Kaishi Times has rapidly grown into an industry leader. According to Frost & Sullivan data, by the end of 2025, the platform had over 375,000 registered automotive service outlets covering 329 cities nationwide, with a cumulative SKU count of 48 million and an annual GMV of 7.6 billion yuan, capturing a 19.1% market share. It ranks first among China’s automotive aftermarket enterprise empowerment platforms across all three core metrics.

The platform’s appeal to the capital markets is equally evident. Between 2016 and 2023, the company completed a total of 14 funding rounds, attracting investors ranging from top-tier venture capital firms such as Sequoia Capital China, Source Code Capital and Shunwei Capital, to industry giants like the Bosch Group, as well as state-backed institutions including the Greater Bay Area Common Home Development Fund, Shenzhen High-Tech Investment and the Longgang District Guidance Fund.

Revenue growth cannot mask losses; cash flow ‘red lights’ remain

The prospectus shows that from 2023 to 2025, Kaishi Times’ revenue stood at 685 million yuan, 742 million yuan and 929 million yuan respectively, with year-on-year growth accelerating to 25.3% in 2025. The consolidated gross profit margin remained stable at over 25%, standing at 27%, 29.7% and 28.3% respectively during the same period, far exceeding the automotive industry’s average of approximately 4.1%.

However, the profit picture tells a different story. During the reporting period, the company recorded losses of 576 million yuan, 448 million yuan and 399 million yuan respectively, with cumulative losses exceeding 1.4 billion yuan over the three years. Although the scale of losses has narrowed year on year, the company remains a considerable distance from breaking even.

In terms of cash flow, Kaishi Times has yet to achieve positive operating cash flow. From 2023 to 2025, net cash flow from operating activities stood at -66.787 million yuan, -166 million yuan and -51.171 million yuan respectively. Meanwhile, the company’s net current liabilities stand at 3.68 billion yuan, whilst cash and cash equivalents on the books amount to only 116 million yuan, indicating liquidity pressures that cannot be overlooked.

In its prospectus, the company attributes the losses to high sales and marketing expenses and early-stage R&D investments. During the reporting period, sales and marketing expenses amounted to RMB 209 million, RMB 214 million and RMB 192 million respectively, accounting for 30.6%, 28.8% and 20.6% of revenue; R&D expenditure stood at RMB 73.7 million, RMB 73.9 million and RMB 55.9 million respectively, with the proportion falling from 10.8% to 6.0%.

Inverted revenue structure: 70% of revenue contributes just 3% to gross profit

The most striking financial contradiction at Kaishi Times lies in the severe mismatch between its revenue structure and profit contribution.

The company’s business is divided into three major segments: Kaishi Auto Parts (B2B platform), Kaishi Strict Selection (F2B self-operated bulk procurement), and Kaishi Premium Selection (B2C store alliance). Of these, Kaishi Yanxuan’s self-operated business contributed over 70% of revenue, yet its gross margin in 2025 stood at just 3.1%, with the gross margin for original equipment manufacturer (OEM) parts as low as 0.9%. In other words, this “anchor” business is effectively operating at a loss merely to build brand awareness.

In stark contrast, the Kaishi Auto Parts Platform business, with a gross margin approaching 90%, and the value-added services, with a gross margin exceeding 77%, together accounted for less than 30% of total revenue. This structure, characterised by “high-margin businesses with small scale and low-margin businesses propping up the overall volume”, has become the core issue behind the company’s inability to increase profits despite rising revenue.

To establish competitive barriers, Kaishi Times has been compelled to shift from its early information-matching model towards a “heavy-transaction” model, using self-operated sales to amplify revenue scale and build up inventories of key products. This has directly led to a surge in capital tied up and operational complexity: the company’s inventory levels soared from 8.56 million yuan in 2023 to 33.24 million yuan in 2025.

Coexistence of R&D “Cutbacks” and AI “Investment”, with Frequent Quality Complaints on the Platform

It is worth noting that Kaishi Times has sent out seemingly contradictory signals in its prospectus. On the one hand, the company states that with the completion of its digital infrastructure, R&D expenditure is not expected to increase in proportion to revenue growth; on the other hand, it emphasised that it would keep pace with cutting-edge technologies and continue to ramp up independent R&D in AI and big data, including key projects such as digital agents, industry-grade AI infrastructure, and new energy aftermarket technologies.

In terms of competition, Kaishi Times faces challenges from rivals with superior R&D capabilities, financial resources and brand strength. How to consolidate its position as the industry leader without expanding R&D investment remains an unresolved challenge.

Furthermore, product quality issues on the platform also pose a potential risk. Reporters from Nandu·Wancai Society and the *Daily Economic News* have noted that on platforms such as Heimao Complaints, numerous automotive parts service outlets and individual car owners have lodged complaints regarding quality defects in parts sold by the Kaishi platform, with some directly alleging the sale of counterfeit goods. As of the time of publication, the company had not responded to enquiries regarding its quality control and liability traceability mechanisms.

Dismantling the VIE structure to pursue a Hong Kong listing: the second-half test for ‘Huawei-affiliated’ entrepreneurs

To facilitate a smooth listing on the Hong Kong Stock Exchange, Kaishi Times fully dismantled the VIE structure it had established in 2019 in January 2026. Kaishi Shenzhen repurchased shares from the majority shareholders for a nominal consideration of 1 yuan and completed the acquisition of the remaining shareholders for 164,300 yuan.

Prior to the IPO, Jiang Yongxing controlled approximately 32.9% of the company’s equity and 66.6% of the voting rights through a super-voting arrangement. A highly concentrated governance structure facilitates efficient decision-making, but also places greater demands on the founder’s strategic resolve.

In the trillion-yuan, non-standardised automotive parts market, Kaishi Times has achieved phased results by leveraging technology to address information asymmetry. However, as it shifts from “burning cash for scale” to “efficiency for profitability”, and moves from the halo of GMV towards true self-sustainability, this Huawei-affiliated start-up has only just secured its ticket to the “second half”.

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.