Market Share of 1.2% Means Number One in the Industry? This Company Spun Off from Haier Is About to Rush for IPO

Questioning AI: Is the low profit margin due to an unbalanced business structure?

Editor’s Note: We analyze corporate IPOs, valuations, and market performance from a professional perspective, recording capital trends. Investment Time Network teams up with Punctuation Finance to create the special series “Decoding Hong Kong IPOs,” exploring the opportunities and logic behind each wave of capital. Stay tuned.

Researcher at Investment Time Network and Punctuation Finance: Xin Yi

When AI deeply integrates into traditional industrial internet, will cold machines gain the ability to “think”?

As a pioneer of this transformation, Haier Group’s subsidiary—Caoos IoT Technology Co., Ltd. (referred to as Caoos)—stands at the IPO starting line with the concept of deeply integrating AI large models with manufacturing, aiming to become the “First AI + Industrial Internet Stock” in Hong Kong.

In fact, Caoos submitted a listing guidance application to the STAR Market in September 2024 and completed five rounds of guidance. However, in January 2026, the company voluntarily terminated its preparations for listing on the A-share market and chose to pursue Hong Kong listing.

Founded in 2017, Caoos launched the industrial internet platform COSMOPlat, which became the key to unlocking industrial digital intelligence and helped the company become a provider of industrial digital solutions and products.

In recent years, the company’s operational performance has been impressive. From 2023 to 2024 and January-September 2025 (referred to as the reporting period), Caoos’ revenue was 4.994 billion yuan, 5.07 billion yuan, and 4.421 billion yuan, respectively, with a 21.62% year-over-year increase in the first three quarters of 2025 compared to 2024. Profit growth is even more dramatic, shifting from a loss to a profit of 165.36 million yuan in just over a year. Data shows that in 2023, the company’s profit was -82.72 million yuan; in 2024, it turned profitable at 651.36 million yuan; and in the first nine months of 2025, profit surged to 1.76 billion yuan, a 393.11% increase year-over-year.

However, a detailed analysis of profit composition reveals that government subsidies played a significant role in this impressive performance.

During the reporting period, Caoos received government subsidies of 97.56 million yuan, 79.67 million yuan, and 50.50 million yuan, respectively. Even in the first nine months of 2025, subsidies accounted for 28.68% of net profit. This indicates that excluding government subsidies, Caoos’ actual profitability might be significantly lower.

From a market perspective, according to Forrester Research, Caoos ranked first in China in platform-based industrial data intelligence solutions in 2024. However, behind this “number one” title, its market share is only 1.2%.

This reflects a typical characteristic of the industrial internet industry—extremely fragmented and highly competitive. In 2024, China’s platform-based industrial data intelligence solutions market was still in its infancy, with the top three players accounting for only 3.3% of the market share by revenue.

Additionally, it is worth noting that despite Caoos’ large revenue scale, its gross profit margin has long been around 18%, below the industry average. For comparison, Beijing Dongfang Guoxin Technology Co., Ltd. (referred to as Dongfang Guoxin, stock code 300166.SZ), which also developed the Cloudiip industrial internet platform, maintained a gross margin above 30%, reaching 32.50% in the first three quarters of 2025. Similarly, Baoxin Software, backed by Baosteel Group, has maintained a gross margin above 30%, reaching 35.8% in the first three quarters of 2025. Its core platform, xIn3Plat, focuses on heavy industries such as steel, rail transit, and new energy, providing full-chain services from automation system integration to cloud collaboration.

Why is Caoos’ gross margin difficult to reach higher levels? The root cause may lie in an unbalanced business structure. During the reporting period, Caoos’ data intelligent solutions business had a gross margin above 30%, but accounted for only about 20% of revenue, increasing to 29.0% in the first nine months of 2025. Meanwhile, IoT solutions had a gross margin of around 13%, but accounted for over 70% of revenue. This business structure drags down the company’s overall profitability.

Breakdown of Caoos’ gross profit and gross margin by business

Data source: Caoos IoT IPO prospectus

Furthermore, as a company incubated by Haier Group, Caoos’ relationship with Haier has always been a focus of market attention. The prospectus discloses that Haier Group directly and indirectly holds 78.04% of Caoos’ shares. This close relationship is most directly reflected in business dependence. Haier Group is not only Caoos’ largest customer, with over half of its revenue coming from Haier, but also its biggest supplier.

During the reporting period, Caoos’ revenue from Haier Group was approximately 3.634 billion yuan, 3.451 billion yuan, and 2.603 billion yuan, accounting for 72.8%, 68.1%, and 58.9% of total revenue, respectively.

Additionally, Caoos has signed a material and equipment procurement framework agreement with Haier Group, purchasing products and equipment as needed. During the reporting period, Caoos paid procurement costs of 998 million yuan, 903 million yuan, and 844 million yuan to Haier Group.

On one hand, relying on manufacturing giant Haier provides Caoos with a stable testing ground and solid business foundation; on the other hand, the high proportion of related-party transactions raises concerns about independence and market competitiveness. Whether Caoos can expand its external customer base will be key to assessing its true value.

Keywords for Investment Timing: Caoos

Author’s statement: Personal opinions only, for reference.