IPO Observation | Zhejiang Qi'an Technology's Second IPO Attempt in Network Security Field
Recently, Zhejiang Qi'an Technology Co., Ltd. (hereinafter referred to as "Qi'an Technology") has submitted materials for filing and registration with the Zhejiang Securities Regulatory Commission, with a recommended underwriter of China Fortune Securities (600999). According to the announcement, Qi'an Technology has been preparing for an IPO since October 2023 and is expected to list on the Shanghai Stock Exchange in the first half of next year.
This is not Qi'an Technology's first attempt at going public. In November 2020, Qi'an Technology submitted its application for a listing on the Science and Technology Innovation Board, with a recommended underwriter of China Fortune Securities (600999). The IPO was terminated in March 2021 due to the issuer's withdrawal of its application or the underwriter's revocation of its recommendation.
Initially, Qi'an Technology planned to issue no more than 12 million shares and raise approximately 4.05 billion yuan to fund the development and industrialization of products based on the "zero-trust" architecture, as well as projects for building a next-generation security management platform, research and development centers, and upgrading marketing services networks.
Major clients are government agencies
Qi'an Technology has been focused on the network security industry since its establishment. Its main business is the development, production, sales, and services of data center security products, with a complete product system established in three major fields: data center operation and maintenance security, account security, and asset security.
The company's products are widely applied in various industries such as finance, power, internet, technology, etc. Its major clients include state-owned enterprises like State Grid Corporation of China, Huawei, China Unicom, and Ping An Insurance Group.
Qi'an Technology has two types of products: pure software and hybrid hardware-software products. For the former, the company sends software and authorization files to customers. For the latter, Qi'an Technology purchases hardware equipment from suppliers, installs software on the equipment, and then delivers the products to customers through a testing and debugging process.
According to the data, Qi'an Technology's founder and CEO Wu Qiang graduated from Tsinghua University in 2002 with a major in information technology and information management. He worked as a security engineer at Alibaba Group from April 2002 to April 2006, responsible for network security testing platforms. After that, he founded Qi'an Technology and developed the concept of "operation needs management." The company has also established a research and development department with 97 employees, accounting for 46.63% of its total staff.
In June 2020, Qi'an Technology received a Pre-IPO round of funding from Zhongguancun Science Park and China Renaissance Capital. In September 2013, the company secured an angel investment from DCM Ventures.
According to the announcement, Wu Qiang and his wife Cai Yongjuan are the ultimate controlling shareholders of Qi'an Technology, with a holding ratio of 79.69% and voting rights of 79.69%.
Profit decline due to product single-track
Qi'an Technology's main business income comes from the sales of access control audit system products, privilege account management system products, asset security management system products, and maintenance services. The company has been facing a single-track product structure for a long time.
In its prospectus, Qi'an Technology explained that the high proportion of revenue from access control audit system products is mainly due to two factors: one is the company's technical advantages in this field, which enables it to compete strongly in the market and promote sales growth; the other is the rapid growth trend in China's network security product hardware market.
However, according to the 2022 annual report data, the main business revenue of Qi'an Technology has been declining for several years. In the first half of 2023, the company reported a net loss of 1826.84 million yuan, with a year-on-year increase of 15.32%. The main reason is that the company's income recognition has decreased.
Looking ahead, Qi'an Technology needs to explore new growth points in the face of rapidly changing market conditions.