Summary of Key Points
Yuejiang Technology (referred to as the "first stock in the collaborative robotics sector") is facing a critical moment in its bid for an A-share IPO on the GEM board, just five days before the review meeting. Co-founder Song Tao has publicly accused the company of concealing a dispute over equity worth hundreds of millions of yuan. Meanwhile, this company, with annual revenues of less than 500 million yuan and having suffered losses for five consecutive years, has raised a total of over HK$3.6 billion in just one and a half years through a Hong Kong stock listing, two private placements, and an A-share fundraising round. The frequency and scale of its financing activities far exceed those of its peers. However, the direction of the funds raised is repetitive, and the company has ample cash on hand, raising doubts about whether it has engaged in "excessive financing." The revelation has caused the company's stock price on the Hong Kong market to plummet by 12.84%, casting a shadow over its IPO prospects and highlighting potential governance flaws that innovative technology companies may overlook during their capital expansion.
Detailed Analysis
1. The "Bomb" Before the Review Meeting: An Equity Dispute Exposes Governance Issues
The founding team of Yuejiang Technology has split apart, with co-founder Song Tao (former COO) and controlling shareholder Liu Peichao in conflict. The dispute centers around an employee stockholding platform called "Yuejiang Partnership":
- The prospectus states that after Song Tao left the company, he did not relinquish his 22.46% stake, while Liu Peichao held 53%.
- Song Tao claimed that in 2023, the company officially promised that he should hold 69.7% of the shares, leaving Liu Peichao with only 0.28%; however, these 47% shares seemingly disappeared without any disclosure to regulators or investors.
- The crucial issue is that this significant equity dispute was not clearly addressed in the prospectus, which is a major taboo in IPO reviews—equivalent to being caught cheating during an exam, a serious violation.
2. Raising $3.6 Billion in One and a Half Years: A Rapid Financing Pace for a Small Company
Yuejiang Technology's financing activities have been exceptionally rapid:
- In December 2024, it listed on the Hong Kong stock market and raised HK$750 million.
- In July 2025, it conducted a private placement, raising HK$1.02 billion.
- Another private placement in November 2025 generated another HK$770 million.
- It is now planning to raise HK$1.2 billion through an A-share offering, bringing the total amount to HK$3.6 billion.
However, the company's business scale is small; its revenue for 2025 was only HK$492 million, and it has been in losses for five consecutive years (with a cumulative loss of HK$376 million). Compared to its peers, this level of financing is unprecedented for mature companies. It’s like a small shop borrowing several times its annual income from relatives and friends—hardly convincing.
3. Repeated Use of Raised Funds: Purpose or Money-Gathering?
The purposes of the three financings seem different, but they all revolve around similar areas:
- Hong Kong IPO funds were used for technology development, production line construction, and acquisitions.
- Private placement funds went towards research and development, acquisitions, and channel expansion.
- A-share fundraising is intended for new robotics projects.
The company’s financial health is relatively good, with a debt-to-asset ratio of only 15% (little debt), and it has more cash on hand than interest-bearing liabilities. The company claims it aims to establish both A-share and H-share platforms to seize market opportunities, but investors question whether it continues to borrow money when it actually has sufficient funds.
4. A Lossy Business Model: High R&D Expenses Without Corresponding Commercial Success
Yuejiang Technology’s financial situation is problematic:
- It has incurred losses of HK$103 million, HK$95 million, and HK$84 million from 2023 to 2025, with profitability expected only in 2028.
- Although revenue growth was rapid in the first half of 2026 (94%-114%), the base figure is low (around HK$300 million), and net losses have increased to HK$90 million-HK$120 million.
- The reason for this is a significant increase in R&D expenses (HK$115 million in 2025, up 59.7%), but the main business is not yet profitable. The company uses its losses to fund new initiatives—similar to someone without a job borrowing money to pay for training courses, relying on continuous borrowing to sustain itself.
5. The Capital Market's Reaction: Equity Issues Are More Critical Than Losses
The revelation of the equity dispute caused Yuejiang Technology’s stock price to drop by 12.84% immediately. Investors see this clearly: while losses are acceptable for innovative companies due to R&D investment, unclear equity structures indicate serious governance issues. If even the founders cannot resolve such conflicts, who would invest?
This incident serves as a warning to all tech startups seeking an IPO: while capital can help with rapid growth, internal disputes and governance flaws will eventually expose themselves, leading to potential crises.
At heart, this controversy reflects the tension between "capital expansion" and "governance compliance." Yuejiang Technology aims to expand through fast financing but has neglected its internal equity issues. The outcome of the review meeting on July 22 will determine whether it can proceed with its A-share listing. Regardless of the outcome, this case highlights that for tech companies to succeed, they must not only be adept at raising funds but also at managing their finances and personnel effectively.