Feisu Innovation to List on Hong Kong Stock Exchange: Previously Highlighted for Internal Control Deficiencies, Rapidly Distributes a 200 Million Yuan Dividend Before IPO

On March 13, Shenzhen Feisu Innovation Technology Co., Ltd. (hereinafter referred to as “Feisu Innovation,” HK: 03355) disclosed a listing announcement on the Hong Kong Stock Exchange. The initial public offering (IPO) will be from March 13 to March 18, with an expected listing on the Main Board of the Hong Kong Stock Exchange on March 23, 2026.

For this listing, Feisu Innovation’s offering price is set between HKD 35.2 and HKD 41.6 per share. The company plans to issue 40 million H-shares globally, raising approximately HKD 1.408 billion to HKD 1.664 billion. Based on the median price (HKD 38.4), the total fundraising amount is about HKD 1.536 billion, with net proceeds of approximately HKD 1.434 billion.

Approximately 40% of the funds will be used for strengthening R&D of the digital and intelligent technology platform over the next five years, about 30% to enhance delivery capabilities in major overseas markets, around 20% for digitalization of network solutions and service business platforms, and about 10% for working capital and general corporate purposes.

In this IPO, Feisu Innovation introduced 11 cornerstone investors, who subscribed to shares worth about USD 90.22 million (approximately HKD 704 million). Cornerstone investors include Hao Fund, Great Holding, WT Asset Management, SCGC Capital (Shenzhen Venture Capital), and others.

According to Tianyancha, Feisu Innovation was established in April 2009, formerly known as Shenzhen Yuxuan Network Technology Co., Ltd. The company’s registered capital is RMB 360 million. The legal representative is Xiang Wei, with major shareholders including Xiang Wei, Wu Duxiang, Shenzhen Venture Capital, among others.

According to the prospectus, Xiang Wei is the controlling shareholder of Feisu Innovation, directly holding 56.65% of shares, controlling a total of 61.16% of voting rights, and serving as an executive director, chairman of the board, and CEO. Other shareholders include Fupeng Assets, Guotai Haitong, Shenzhen Venture Capital, Guoxin Securities, and others.

Based on information from Beidou Business & Beidou Finance, Feisu Innovation previously filed for an IPO on the Shenzhen Stock Exchange Main Board in March 2023, initially aiming to raise RMB 1.394 billion, later adjusted to RMB 1.354 billion. In May 2024, the company voluntarily terminated the IPO process after multiple rounds of inquiries.

What is the status of Feisu Innovation’s listing this time?

1. Previously criticized for internal control deficiencies

Notably, Feisu Innovation was publicly criticized. In January 2025, the Shenzhen Stock Exchange’s “Self-Regulatory Supervision” section disclosed three regulatory letters, penalizing Feisu Innovation and its intermediaries, including China Merchants Securities and Deloitte Hua Yong Certified Public Accountants.

The Shenzhen Stock Exchange pointed out that Feisu Innovation’s internal controls related to information systems had deficiencies. Additionally, since June 2023, the company only maintained system operation logs for six months, which did not match inquiry responses. Third, there were internal control issues with the company’s financial systems.

The exchange believed that Feisu Innovation failed to ensure the truthfulness, accuracy, and completeness of its IPO application documents and information disclosures, violating relevant regulations of the Shenzhen Stock Exchange’s “Rules for the Review of Stock Issuance and Listing.” The company’s actual controller, Chairman, and CEO Xiang Wei bears significant responsibility.

As a result, the Shenzhen Stock Exchange’s Listing Review Center decided to issue a written warning and regulatory measures to Feisu Innovation and Xiang Wei. The exchange also issued written warnings to China Merchants Securities and Deloitte Hua Yong Certified Public Accountants, as well as related responsible persons.

In May 2025, Feisu Innovation submitted its prospectus to the Hong Kong Stock Exchange, which was updated in December 2025. In January 2026, the China Securities Regulatory Commission issued a filing notice for Feisu Innovation’s offshore listing. Subsequently, in March 2026, Feisu Innovation passed the hearing and disclosed its post-hearing IPO prospectus.

In the prospectus submitted to HKEX, Feisu Innovation stated that the regulatory letters identified certain internal control deficiencies, including issues with the accuracy of information displayed on the front-end sales platform, retention of system operation logs, and the absence of internal management systems for reverse settlement and review.

However, Feisu Innovation believes it has rectified the issues pointed out and strengthened its internal monitoring mechanisms.

2. Rapid growth in performance, with a one-time dividend of RMB 200 million

According to the prospectus, Feisu Innovation focuses on R&D, design, and sales of core network communication equipment and general accessories. According to Frost & Sullivan, in 2024, Feisu Innovation was the second-largest global provider of online DTC network solutions, with a market share of 6.9%.

The company’s solutions include high-performance network devices, scalable network operating systems, and cloud network management platforms, supporting scenarios such as high-performance computing, data centers, enterprise networks, and telecommunications, meeting global demand for enterprise-grade high-performance and basic network solutions.

In 2022, 2023, 2024, and the first nine months of 2025 (Q1-Q3), Feisu Innovation’s revenue was approximately RMB 1.988 billion, RMB 2.213 billion, RMB 2.612 billion, and RMB 2.175 billion, respectively. Net profit was approximately RMB 365 million, RMB 457 million, RMB 397 million, and RMB 423 million.

The main revenue source is from basic performance network solutions. During the reporting periods, revenue from this segment was approximately RMB 1.291 billion, RMB 1.389 billion, RMB 1.498 billion, and RMB 1.139 billion, accounting for 64.9%, 62.8%, 57.3%, and 52.4% of total revenue, respectively.

Overall, Feisu Innovation’s revenue has maintained growth, with gross profit margins steadily increasing. However, net profit declined in 2024. Specifically, net profit was about RMB 365 million in 2022, increased by 25.3% to RMB 457 million in 2023, but decreased by 13.0% to RMB 397 million in 2024.

The company explained that the decline in net profit in 2024 was mainly due to a significant increase in R&D and sales & marketing expenses, primarily driven by higher employee compensation for R&D and sales staff, partially offset by increased gross profit.

In the first three quarters of 2025, revenue was approximately RMB 2.175 billion, up 11.3% from RMB 1.954 billion in the same period of 2024; gross profit was about RMB 1.143 billion, up 14.8%; net profit was approximately RMB 423 million, up 20.6%, compared to RMB 351 million in the same period of 2024.

On a non-IFRS basis, adjusted net profit for 2022, 2023, and 2024 was approximately RMB 388 million, RMB 470 million, and RMB 408 million, respectively. For the first three quarters of 2025, adjusted net profit was about RMB 461 million.

Additionally, the prospectus disclosed that Feisu Innovation relies on contract manufacturers to meet its manufacturing needs. In 2022, 2023, 2024, and Q1-Q3 2025, the company engaged approximately 155, 151, 163, and 182 contract manufacturers, respectively.

According to the latest prospectus, in 2025, Feisu Innovation’s revenue was approximately RMB 2.966 billion, a year-on-year increase of 13.55%; gross profit was about RMB 1.615 billion, compared to RMB 1.306 billion in the same period of 2024; net profit was approximately RMB 601 million, a 51.4% increase from RMB 397 million in 2024.

The prospectus also states that in May 2025, Feisu Innovation paid a dividend of RMB 200 million to its shareholders. In 2022, the company also paid a dividend of RMB 60 million.