Interpreting the new stock of US stocks | It is difficult for high revenue growth to conceal the slowdown in profits, and AI and diversification are key to QMSK (QMSK.US) breaking through.

China's automotive insurance aftermarket service provider Qingmin Shuke Technology (QMSK.US) has significantly raised its fundraising amount. After submitting the public version of the prospectus to the SEC for the first time on January 28, 2025, Qingmin Shuke Technology updated its prospectus for the third time on December 16, continuing to advance the company's process for its U.S. IPO. In the latest version of the prospectus, Qingmin Shuke Technology plans to issue 6.25 million common shares at a price of $4 to $6, raising $25 million to $37.5 million, representing a substantial increase of 316.67% from the previously planned 1.5 million common shares. The increase in fundraising amount is often a sign of market welcome for companies, but Qingmin Shuke Technology's adjustment may not be related to this. The company clearly stated in the prospectus that the core reason for adjusting the fundraising amount this time is the new Nasdaq rules (Chinese concept stocks must raise at least $25 million and have a public float market value of $15 million). Clearly, Qingmin Shuke Technology's significant increase in fundraising amount this time is a passive adjustment, which, while allowing the company to raise funds significantly, will also lead to a substantial increase in the company's outstanding shares post-listing, with the proportion of issued shares to total shares rising from 9.1% to 29.41% (if over-allotment options are not exercised), close to thirty percent. After a significant increase in the number of issued shares, a core issue arises: the significantly increased number of circulating chips makes the market more likely to fully price the company's intrinsic value, but it also poses a more serious challenge to the company's fundamentals. Customer growth drives continuous revenue growth Since its establishment in 2013, Qingmin Shuke Technology has been deeply engaged in the automotive insurance industry for over twelve years. As of now, Qingmin Shuke Technology has developed two main business segments, namely automotive insurance aftermarket services and other customized services. According to the prospectus, Qingmin Shuke Technology's automotive insurance aftermarket services mainly include insurance risk assessment services and value-added services. The insurance risk assessment service refers to Qingmin Shuke Technology providing personalized risk assessment reports to clients by integrating vehicle and driver information through its independently developed "Qingmin Service Platform" (QMSP), helping insurance companies optimize underwriting processes. The value-added services include vehicle safety inspection, maintenance, driving, towing, etc., covering the aftermarket needs of the entire vehicle lifecycle. It is worth noting that Qingmin Shuke Technology's value-added services are provided by its service platform operators in direct cooperation with automotive dealers, physical maintenance and repair shops, and 4S stores. This means that Qingmin Shuke Technology provides value-added services by accessing external service providers, a typical asset-light operation business model. Currently, Qingmin Shuke Technology provides extensive aftermarket services in 30 provincial-level administrative regions in China, with service points reaching 10,651. The rich service network can attract a customer base including other aftermarket service providers and insurance companies, which is conducive to Qingmin Shuke Technology expanding its business scale. The company's main customers are well-known large insurance companies in China (such as PICC Property Insurance, Ping An Property Insurance, etc.) and third-party service providers for auto insurance. Qingmin Shuke Technology's other customized services refer to the company providing other scenario-based customized services based on specific circumstances, such as information technology services and promotional services, mainly targeting special scenario services that cannot be standardized for clients. From a revenue perspective, automotive insurance aftermarket services are the core business of Qingmin Shuke Technology. In the 2025 fiscal year (12 months ending March 31), the revenue from Qingmin Shuke Technology's automotive insurance aftermarket services accounted for 90.2% of total revenue, with the revenue from risk assessment services accounting for 54.1% and value-added services accounting for 36.1%. The revenue from other customized services accounted for 9.8%. Looking at the performance, Qingmin Shuke Technology has achieved continuous rapid revenue growth, but a "decline" in profit growth has become evident. According to the prospectus, the revenue for Qingmin Shuke Technology in the 2023, 2024, and 2025 fiscal years was $14.2147 million, $38.161 million, and $52.8568 million, respectively, with a three-year compound growth rate of 92.83%. However, the net profit for the same period was $0.0755 million, $2.4421 million, and $2.2497 million, with a decline in net profit in the 2025 fiscal year. In particular, the significant increase of 3132.7% in net profit to $2.4421 million in the 2024 fiscal year for Qingmin Shuke Technology was mainly due to the growth in revenue, an increase of 2.4 percentage points in gross profit margin to 9.6% due to scale effects, and a 7.4% reduction in total operating expenses, leading to a significant release of net profit. The net profit decreased by 7.9% to $2.2497 million in the 2025 fiscal year primarily because total operating expenses increased by 181.6% to $2.2988 million as the business scale expanded, with total operating expenses as a percentage of total revenue increasing from 2.1% in the 2024 fiscal year to 4.3% in the 2025 fiscal year, hindering profit release. Market Highly Fragmented and Intensely Competitive, AI and Diversified Services Key to Breakthrough In fact, the continuous rapid expansion of Qingmin Shuke Technology's business scale over the past three years is supported by the industry's development, with the continued expansion of the Chinese auto insurance market providing fundamental support for Qingmin Shuke Technology's growth. Data shows that in 2024, the domestic auto insurance premium reached over 900 billion RMB for the first time, a year-on-year increase of 4.08%, reaching 913.673 billion RMB. According to the Insurance Regulatory Commission's "Insurance Business Situation Report" released in November 2025, the original insurance premiums for motor vehicle insurance reached 843.2 billion RMB in the first 11 months of 2025, a year-on-year increase of 3.9%. The growth of the auto insurance market has driven the demand for insurance risk assessments, vehicle safety inspections, maintenance, and other aftermarket services, and as a service provider focused on the automotive insurance aftermarket, Qingmin Shuke Technology's core business (such as risk assessment, value-added services) directly benefits from this trend, with customers (insurance companies, auto insurance third-party service providers) requiring precise risk assessments and efficient aftermarket services, driving revenue growth for the company. Furthermore, the continued growth of the auto insurance market will continue. According to data from Frost & Sullivan, with the steady increase in the number of cars in China and the corresponding increase in the number of insured vehicles, the size of the Chinese auto insurance market is expected to grow from $107.4 billion in 2023 to $145.6 billion in 2028, with a compound annual growth rate of 6.3%, and Qingmin Shuke Technology will continue to benefit from industry growth. However, it is worth noting that Qingmin Shuke Technology faces clear business challenges and risks. One is the relatively high concentration of customers. According to the prospectus, in the 2024 fiscal year, the revenue from Qingmin Shuke Technology's top ten customers accounted for a high proportion of total revenue, reaching 78.7%. By the 2025 fiscal year, although the revenue share of the top ten customers decreased to 73.1%, it is still at a relatively high level, with the revenue share of the top two customers during the reporting period reaching 19.8% and 12.5%, totaling over thirty percent. If major customers are lost, it can significantly impact Qingmin Shuke Technology's business operations. Secondly, the automotive insurance third-party service market in China is highly fragmented and fiercely competitive. Frost & Sullivan reports that the Chinese automotive insurance third-party service market is extremely fragmented, with participation from thousands of companies, and based on revenue in 2023, Qingmin Shuke Technology's share of the total Chinese automotive insurance third-party service market is only 0.3%, indicating a relatively small scale. In the intensely competitive automotive insurance third-party service market, small and medium-sized enterprises like Qingmin Shuke Technology must use AI applications as the engine and diversified services as the key to break through, creating a differentiated core competitive advantage. Currently, the automotive insurance third-party service industry stands at a crossroads of transformation, with technological changes, especially the penetration of AI, reshaping the industry logicsimplifying operational processes, and restructuring the underlying paradigm of risk assessment. Specifically, the value of AI has penetrated the entire service chain: machine learning can deeply analyze driving behavior patterns, accurately identify vehicle damage levels in claim photos, and automate claim settlement and premium calculation, while AI-driven intelligent chatbots like Siasun Robot & Automation can provide 24/7 policy consultations and instant interactions, significantly improving customer service response efficiency. This integration of "technology + services" makes traditional risk control and customer operations that rely on manual work efficient and quantifiable. "Strategic integration capabilities" will also become the focus of competition in the future automotive insurance third-party service industry, as companies need to provide one-stop comprehensive solutions to customers through the organic integration of diversified services. This integration is reflected in the linkages of service chains: integrating processes such as claim handling, risk management, customer support deeply, which can not only meet diverse needs through a "single contact point" to enhance customer experience, but also create economies of scale for service providers. For Qingmin Shuke Technology, the effectiveness of AI technology implementation and the expansion of service systems is not only a core variable for seizing the industry's reform window but also a key anchor point for the post-listing valuation system.