New Stock Preview | From Traditional Advertising to QR Code Marketing, How Likely Is Shenghuo Holdings to Succeed in Listing on the Hong Kong Stock Exchange?

In spring 2026, when the gate for an HKEX IPO remains wide open, a QR code marketing service provider named Shenghuo Holdings has once again stepped into the spotlight. Zhitoo Finance has learned that recently, the HKEX website updated the prospectus of Shenghuo Holdings Group Co., Ltd. (hereinafter referred to as “Shenghuo Holdings”). This is the company’s second attempt in just half a month, following the invalidation of its earlier prospectus a few days ago.

So, with this renewed submission, what are Shenghuo Holdings’ chances of success?

From traditional advertising to the transformation path of “one item, one code”

According to the prospectus, Shenghuo Holdings was established in Guangzhou in 2013, initially positioning itself as a traditional integrated marketing and advertising marketing service provider. Over the past decade or more, the company has been quick to capture the digital transformation wave sweeping the fast-moving consumer goods industry. To remain competitive in a rapidly evolving market environment, Shenghuo Holdings gradually strengthened its technological capabilities, continuously upgraded and enriched its integrated marketing and advertising marketing service matrix, and sought to seize more business opportunities amid intense market competition.

In 2018, Shenghuo Holdings further expanded its service scope and shifted its strategic focus toward marketing technology services. Its main approach is to provide solutions for clients through its proprietary “one item, one code” technology. The core logic of this technology lies in bridging offline and online interactions, thereby greatly improving marketing effectiveness: consumers only need to simply scan the QR code on a product package to be directed to visit the brand website, participate in promotional activities, or view product details. This process not only significantly enhances users’ level of engagement, but more importantly, it enables brand owners to track user data through the backend to carry out precise personalized marketing, helping clients develop data-driven marketing plans.

Shenghuo Holdings’ marketing technology services mainly rely on its in-house systems. Unique QR codes are embedded on product outer packaging and on individual products. This “one item, one code” model turns every item into an independent traffic entry point and a data touchpoint. According to data from Frost & Sullivan, based on the company’s related service revenue in 2024, it ranks fourth among QR code marketing solution service providers in China, with a market share of approximately 1.8%. In Zhitoo Finance’s view, the title of “industry fourth” may look impressive, but the 1.8% market share reveals a reality in which the industry is highly fragmented and no clear “headquarters effect” has yet formed.

Advertising services led the way, and gross margin faced sustained pressure

By taking a deep look at Shenghuo Holdings’ business landscape, Zhitoo Finance noticed that its revenue structure is undergoing subtle changes, while the downward trend in profitability is also impossible to ignore.

Specifically, the company’s businesses are mainly divided into three categories: integrated marketing services, marketing technology services, and advertising marketing services. In 2025, the revenue contribution ratios of these three segments were 34.0%, 21.1%, and 44.9%, respectively. It is clear that advertising marketing services have replaced other businesses as the company’s largest revenue source, accounting for nearly half of the total. This structural shift directly affects the company’s overall profitability. In 2023, 2024, and 2025, the company’s overall gross margin rates were 34.2%, 24.1%, and 24%, respectively, showing a clear downward trend. This data clearly indicates that as revenue scale expands, Shenghuo Holdings has not been able to benefit from the dividends of economies of scale; instead, it has fallen into a dilemma of “increasing revenue without increasing profit.”

In more detail, integrated marketing services—its traditional core business—have seen gross margin continue to decline, indicating that competition in this area is intensifying and bargaining power has been continuously squeezed. Meanwhile, marketing technology services, which have relatively higher technological content, as well as advertising marketing services, which account for the largest share, experienced fluctuations with gross margin first dropping and then slightly rebounding; however, overall it remains at a relatively low level. This reflects that the company has weaker say in the value chain, especially when facing the dual squeeze of upstream media resource costs and downstream clients’ pressure to lower prices, leaving it without sufficient ability to pass on costs. For a marketing technology company that brands itself as “technology-driven,” the ongoing decline in gross margin of its core business undoubtedly weakens its attractiveness for long-term investment.

The problem of heavy reliance on major clients is hard to resolve

If the decline in gross margin is an industry-wide common problem, then Shenghuo Holdings’ customer structure is another of its weaknesses. During the reporting period, the revenue contribution ratios from the company’s top five customers were as high as 91.2%, 79.8%, and 91.3%, respectively. This means that the lifeblood of Shenghuo Holdings’ survival is entirely controlled by a small number of major clients. The company also stated plainly in its risk factors that the loss of any one major client could have a material adverse impact on its performance.

Even more severe is its extreme reliance on a single largest customer. According to the prospectus, the largest customer, “Group A,” contributed 78.6%, 49.3%, and 40.4% of the company’s totals during the reporting periods, respectively. Although this proportion has declined recently, the 40.4% share is still within a very high-risk range.

Although Shenghuo Technology lists well-known partners such as PepsiCo, Wong Lo Kat, Jianlibao, China Mobile, JD.com, and Haotai Tai in the prospectus to try to demonstrate the results of customer diversification, the data does not lie. Given the reality that more than 90% of revenue comes from the top five customers, the contribution from other long-tail customers is negligible. The company’s main focus is deeply rooted in the fast-moving consumer goods industry. While it intends to expand into areas such as automobiles and household goods, the results have not yet appeared in its financial reports.

This highly concentrated customer structure creates a major disadvantage in bargaining power. When facing industry giants, as the contract party (the “乙方”), Shenghuo Technology often lacks bargaining power in pricing, payment terms, and even service terms. This also partly explains why its gross margin has been difficult to improve. More critically, the prospectus states plainly: “The company’s major customers are under no obligation to place purchase orders with the company in any way, whether in terms of the current quantity or price levels, or under any conditions.” Because many of its businesses are carried out on a project basis, there is significant uncertainty about whether customers will renew contracts after a project ends. Once “Group A” decides to build its own marketing team or switch suppliers, Shenghuo Technology’s revenue would face the risk of a steep drop.

Against a backdrop where business risks remain high, Shenghuo Holdings’ capital operations have drawn even more attention. As Zhitoo Finance observed, right before Shenghuo Technology’s first submission for a listing application, the company announced a large dividend distribution plan. In only the first half of 2025, Shenghuo Technology paid shareholders dividends of as much as RMB 77.6 million. The data shows that over the 3.5 years from 2022 to the first half of 2025, the company’s cumulative profit was RMB 92.25M, while the dividend amount accounted for more than 80% of total profit—almost distributing most of its profits to shareholders.

Taken as a whole, Shenghuo Holdings’ second filing reflects its urgent desire for a path through capital, but beneath the attractive-sounding “fourth in the industry” label, hidden concerns are also not to be ignored. The sustained pressure on gross margin, heavy reliance on major customers, and profitability difficulties during the business structure transformation constitute three major challenges it cannot avoid on its IPO journey. Moreover, the large-scale dividend distribution behavior on the eve of listing is more likely to prompt the market to approach the company’s corporate governance and fundraising motives with cautious scrutiny. In the context of the HKEX increasingly focusing on the profitability quality, customer structure, and governance level of companies seeking listing, whether Shenghuo Holdings can win over investors with its “one item, one code” technology narrative still remains a question mark. For a company that is still in the midst of transformation and has not yet truly established a core moat, this filing is only the starting point—the real test has just begun.

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