New stock preview | The hot safety market's annual compound growth is nearly 40%, why is Zeff Intelligent still trapped in a "burning money" dilemma?

With the accelerated transformation of the global energy structure, the race track of new energy vehicles and electrochemical energy storage is experiencing unprecedented explosive growth. However, under the prosperity of the continuous increase in installed capacity of power batteries, how to effectively curb the risk of "thermal runaway" of lithium batteries has become the core issue of high-quality development in the industry. At this critical juncture, the leading player in the domestic new energy battery thermal safety field, ZhiFer Intelligent Systems (Shanghai) Co., Ltd. (hereinafter referred to as "ZhiFer Intelligent"), has formally submitted an application for listing on the main board of the Hong Kong Stock Exchange, intending to appoint Nam Hwa Financing as the exclusive sponsor, attempting to fill the gap in the listing puzzle of lithium battery safety protection in the Hong Kong stock market. As an "invisible champion" in the industry, ZhiFer Intelligent is expected to rank first in market share by 2025, entering the top five in the Chinese lithium battery thermal safety solution market, and being the only enterprise that can provide a complete closed-loop solution covering L1 to L4. In the two major sub-tracks of new energy heavy trucks and energy storage systems, it is also leading in market share. However, behind the impressive market position, the company also faces multiple financial challenges such as three consecutive years of accumulated losses exceeding 200 million RMB, high customer concentration, and sharp increase in accounts receivable. In the current accelerating expansion of the hundred-billion-level thermal safety blue ocean market, what are the chances of ZhiFer Intelligent's success in the Hong Kong stock market? Leading market position, the only provider of a four-level closed loop integration In the view, the story of ZhiFer Intelligent begins with a deep understanding of the mechanism of lithium battery thermal runaway. Different from traditional fire fighting or single thermal management, the company has built a complete technical chain from prevention, early warning, suppression to fire extinguishing, dividing its products into four levels from L1 to L4. Among them, L1 is responsible for intelligent thermal management at the battery pack level, maintaining the optimal working temperature of the battery; L2 achieves early detection and warning of thermal runaway through a compound detector; L3 releases suppressants in the early stage of thermal runaway inside the battery pack to block the spread of heat; L4 provides cabin-level full immersion fire extinguishing capability as the last line of defense. Through the platform technology of this four-level closed-loop control safety system, ZhiFer Intelligent has formed a significant differentiation competitive advantage in the industry. According to a Frost & Sullivan report, based on revenue in 2025, ZhiFer Intelligent ranks first in the overall Chinese lithium battery thermal safety solution market. It is worth noting that in the market for L1 thermal management systems focusing on new energy heavy trucks, the company holds the top spot with a share of 35.3%; in the market for L2 to L4 fire prevention and control solutions applied to electrochemical energy storage systems, it also takes the lead with a share of 26.3%. Among the five major market participants, ZhiFer Intelligent is the only enterprise that can provide a complete closed-loop solution from L1 to L4, which constitutes its most core business moat. This market position is due to the company's long-term and in-depth research and development investment and participation in technical standardization. The prospectus shows that the company's research and development expenses reached as high as 66.78 million RMB in 2023, accounting for 28.5% of total revenue for the year. Although the proportion of R&D expenses decreased in the following two years, the absolute amount still remained above 45 million RMB. More importantly, ZhiFer Intelligent has transitioned from a simple product manufacturer to an industry standard-setter, participating in the formulation of over 35 national and industry standards related to lithium battery thermal safety, including key documents such as the "General Technical Requirements for Fire Monitoring and Early Warning Systems in Electrochemical Energy Storage Power Stations." This control of discourse from commercial practice to technical standards provides solid endorsement for the company when attracting large customers. Its customer base already includes major domestic commercial vehicle manufacturers such as Sinotruk Jinan Truck Group and leading electrochemical energy storage system integrators. In 2025, revenue from the electric vehicle business accounted for 58.6%, with sales to Sinotruk Jinan Truck Group reaching as high as 260 million RMB, accounting for nearly a third of total revenue. In addition, the company is not limited to the domestic market. Its prospectus discloses future strategies, clearly stating that it will use the technical experience accumulated in China under rigorous standards to export thermal safety standards and solutions to overseas markets such as Europe, North America, the Middle East, and Southeast Asia, attempting to transform domestic technological dividends into competitive capital in the global market. Financial data as a double-edged mirror, explosive revenue growth and cash flow predicament However, beneath the glamorous industry rankings and grand expansion plans, ZhiFer Intelligent's financial statements reveal the typical and severe financial challenges faced by a growth-oriented technology company. The most striking highlight is the explosive growth in revenue. From 2.34 billion RMB in 2023 to 3.87 billion RMB in 2024, and then to 9.16 billion RMB in 2025, the company's revenue has experienced a breakthrough development, with an astonishing compound annual growth rate. This is mainly due to the surge in demand from end-users in the new energy heavy truck and energy storage station markets, as well as the company's aggressive pricing strategy. Especially in the heavy truck sector where the trend towards electrification is most pronounced, the revenue from the L1 product reached 536 million RMB in 2025, nearly doubling year-on-year, solidifying its leading position in this segmented market. However, accompanying the high revenue growth is continuous losses and tight cash flow. From 2023 to 2025, the company recorded annual losses of 95.8 million RMB, 102 million RMB, and 28.5 million RMB, respectively, with a total accumulated loss of over 220 million RMB over three years. Although the net loss in 2025 has significantly narrowed, and the adjusted net profit after excluding non-operating factors such as share-based payments reached a positive 22.3 million RMB, the sustainability of this turning point in profitability still requires careful evaluation by the market. A closer look at its income statement reveals that the drastic fluctuation in gross profit margin is a key factor hindering profitability. The overall gross profit margins for the company from 2023 to 2025 were 19.6%, 8.6%, and 15.7%, respectively. The halving of the gross profit margin in 2024 was mainly attributed to a negative gross margin of -8.9% in the energy storage system business, although the gross margin for this sector rebounded to 4.3% in 2025, and the gross margin in the electric vehicle business also increased to 23.8%, driving an overall gross margin recovery. However, this reflects the company's bargaining power still facing challenges when confronted with intense market price wars. It is worth noting that from 2023 to 2025, the average unit price of the L1 product for electric vehicle applications decreased from about 10,000 RMB to 9,000 RMB, while the unit price of products related to energy storage systems also decreased from 47,000 RMB to 39,000 RMB, the industry-wide pricing pressure directly eroding the company's profit margins. In addition to the uncertainty of profitability, asset quality and cash flow pressure are also hurdles on ZhiFer Intelligent's path to capitalization. With the expansion of revenue scale, the company's accounts receivable have shown an out-of-control upward trend. From 2023 to 2025, trade receivables were 125 million RMB, 233 million RMB, and 526 million RMB, respectively. By the end of 2025, accounts receivable accounted for 63.3% of total current assets, indicating that a large amount of working capital is being used by downstream customers. At the same time, the revenue contribution rate of the company's top five customers had climbed to 64.74% by 2025, the high customer concentration not only exacerbating repayment risks but also putting the company in a relatively passive position in supply chain negotiations. In addition, the prospectus also shows that the company has consistently been in a net debt position, with current ratios of 0.7 times and quick ratios of 0.58 times in 2025, indicating significant short-term debt repayment pressures. The battle for market expansion in the hundred-billion blue ocean market Despite hidden concerns in the financial data, the track where ZhiFer Intelligent operates is undoubtedly highly attractive. It is noted that the Chinese lithium battery thermal safety solution market is expected to grow from 115 billion RMB in 2025 to 607 billion RMB in 2030, with a compound annual growth rate of up to 39.3%. In particular, the active safety stages of L2 and L3 are expected to become the main DRIVE of industry growth in the future, with a compound annual growth rate of up to 59.6%. As the only manufacturer currently on the market that can provide a complete closed-loop solution from L1 to L4, ZhiFer Intelligent has built a deep moat based on technical integrity and first-mover advantage. By listing in Hong Kong this time, ZhiFer Intelligent clearly intends to use capital operations to mend its financial weaknesses and consolidate its market position. According to the plan, the raised funds will be mainly used to enhance research and development capabilities, expand production capacity, strengthen talent reserves, and repay some bank borrowings. For a research-driven enterprise, sustained high-intensity investment is a necessary condition to maintain technological barriers, while repaying debt and supplementing operating capital can directly improve its tight cash flow situation and reduce financial risks. Looking to the future, the key to ZhiFer Intelligent's breakthrough lies in whether it can achieve a transition from "expanding scale" to "quality efficiency" while maintaining market share. On one hand, as the new energy commercial vehicle and energy storage markets enter a mature stage, simple price competition will become unsustainable, and the company needs to enhance product value through technological iteration to repair and stabilize gross profit margin levels; on the other hand, optimizing customer structure and strengthening accounts receivable management will be a necessary course for the company to prove to investors its sustainable ability to generate profits. In a Hong Kong stock market increasingly valuing fundamentals and profit certainty, ZhiFer Intelligent's ability to tell the story of this "safety guardian" in terms of capital not only depends on its technical dominance in the field of thermal safety but also on its determination and speed in resolving financial concerns and achieving high-quality profitability.