Shenghuo Holdings "Breaks Through" the Hong Kong Stock Exchange, Controlling Shareholder "Drains" Profits, Drawing Attention

Why Did the Large Dividend Before the IPO of Shenghuo Holdings Draw Market Attention?

Domestic Industry “Old Four.”

Zhang Wei, Investor Network

According to official news from the Hong Kong Stock Exchange, on March 13, QR code operator Shenghuo Holdings Group Limited (hereinafter referred to as “Shenghuo Holdings” or “the Company”) submitted a prospectus for its planned IPO. This IPO is a resubmission after Shenghuo Holdings’ initial prospectus submitted in August 2025 expired.

According to data from consulting firm Frost & Sullivan, in terms of revenue for the 2024 fiscal year, Shenghuo Holdings ranks fourth among domestic QR code marketing solution providers, with a market share of approximately 1.8%.

According to the financial report, as of the end of January this year, Shenghuo Holdings had cash funds of only 16.56 million yuan, while short-term loans reached 36.9 million yuan. The pressure on operating cash flow may lead Shenghuo Holdings to rush for an IPO?

A 300 Million Yuan Big Business Behind QR Codes

When you buy bottled water or instant noodles, you may notice a QR code on the packaging. Scanning the QR code reveals information such as coupons, cash red packets, promotions, lotteries, and points. The operator of this QR code could be Shenghuo Holdings.

Shenghuo Holdings, hidden behind the giants of the fast-moving consumer goods (FMCG) industry, has gained a foothold in the domestic FMCG marketing field through its self-developed “One Code Per Item” QR code technology. In 2025, Shenghuo Holdings’ revenue exceeded 300 million yuan, nearly doubling from 163 million yuan in 2023. Shenghuo Holdings’ clients include major FMCG giants like Master Kong, Pepsi, and Wanglaoji, gradually expanding into the automotive and household goods sectors.

The prospectus shows that Shenghuo Holdings was established in 2013, initially focusing on integrated marketing and advertising services. In 2018, the company expanded into marketing technology services, focusing on the “One Code Per Item” business, forming three main business segments: “integrated marketing services + marketing technology services + advertising marketing services.”

Among them, marketing technology services are Shenghuo Holdings’ most recognizable business and are the core embodiment of its role as a QR code operator. Shenghuo Holdings provides clients with user interaction, precise marketing, data tracking, and other solutions through QR codes embedded in product packaging.

The financial report indicates that from 2023 to 2025 (hereinafter referred to as “the reporting period”), the annual revenue from marketing technology services was around 60 million yuan. Although the revenue share of this business segment dropped from 41% to 21% during the reporting period, it serves as a “ballast stone” in Shenghuo Holdings’ three major business segments due to its technical advantages.

In 2025, revenue from integrated marketing services was 102 million yuan, accounting for 34% of total revenue. This business primarily provides clients with comprehensive solutions for personalized marketing strategy formulation, creative development, and cross-channel promotional execution, covering offline event planning, online content operation, etc. This business model is mainly project-based, with weak sustainability.

Currently, Shenghuo Holdings’ revenue support comes from advertising marketing services. The revenue from this business in 2025 is approximately 135 million yuan, accounting for 45% of total revenue. This business mainly offers advertising creative design, ad placement, and other services, with channels including outdoor advertising, digital media, and social media. During the reporting period, the revenue growth rate of advertising marketing services increased from 11% to 45%. However, this business is highly dependent on external advertising resources, limiting its competitiveness.

From the perspective of business synergy, Shenghuo Holdings uses the “One Code Per Item” QR code technology as a lever, positioning marketing technology services in the center, and then combining integrated marketing services and advertising marketing services to provide FMCG clients with an integrated marketing solution of “technology + planning + placement.” Looking at the revenue composition, with marketing technology services currently unable to shoulder the revenue banner, it remains to be seen whether the two auxiliary businesses can ensure performance sustainability.

Is the Low Technical Barrier Leading to Weak Competitiveness?

According to data from Frost & Sullivan, based on the revenue from marketing technology services (related to QR codes) in 2024, Shenghuo Holdings ranks fourth among domestic QR code marketing solution providers, with a market share of about 1.8%. While it seems to be at the forefront of the industry, the market competitiveness of Shenghuo Holdings is questionable when considering the industry landscape.

Bai Wenxi, vice chairman of the China Enterprise Capital Alliance, believes that the barriers to entry in the QR code marketing industry are low and technology is heavily homogenized. The core of Shenghuo Holdings’ “One Code Per Item” technology is to assign a unique digital identity to each product, achieving offline and online linkage, but this technology is not irreplaceable.

According to Qichacha information, currently, there are numerous small and medium-sized marketing service providers in China that can offer similar services, often at lower prices, resulting in fierce industry competition. In this context, Shenghuo Holdings may have to rely on low-price competition to acquire customers, further squeezing profit margins.

The financial report shows that during the reporting period, Shenghuo Holdings’ overall gross profit margins were 34.2%, 24.1%, and 24.0% respectively, with a significant year-on-year decline of 10.1 percentage points in 2024, and remaining at a low level in 2025. The main reason for the decline in gross profit margin is the increase in the revenue share of advertising marketing services (which has lower gross margins) and the low-price competition faced by QR code-related services, leading to a decrease in overall profitability.

At the same time, the industry concentration of QR code marketing is extremely low, with no significant advantages for leading enterprises. In 2024, the combined market share of the top five operators in China was 15.2%, with Shenghuo Holdings not far behind the leading enterprises. This also means that no company can currently form a monopoly advantage, and Shenghuo Holdings also faces the risk of being replaced.

Did the Actual Controllers “Empty” Profits Before the IPO?

The most controversial aspect of this IPO is that Shenghuo Holdings distributed a large dividend before the IPO, which almost entirely flowed into the pockets of the actual controllers.

The prospectus shows that Shenghuo Holdings was founded by the couple Zhong Jian and Luo Xinyan. In July 2002, Zhong Jian obtained a degree in finance from Sun Yat-sen University, after which he worked at Guangzhou Honghui Industrial and Guangdong Qihong Media, accumulating rich experience in management, strategic planning, and business development.

In 2013, Zhong Jian and his wife Luo Xinyan established Shenghuo Holdings’ domestic operating entity, Guangdong Shenghuo, with the couple holding 60% and 40% of the shares, respectively. In 2016, Guangdong Shenghuo was listed on the New Third Board and was delisted in April 2025, subsequently submitting its IPO application to the Hong Kong Stock Exchange in August of the same year.

Before this IPO, Zhong Jian and Luo Xinyan held a total of 95.8% of Shenghuo Holdings’ shares, giving them absolute control over the company. This “one-man governance” model laid the groundwork for large dividends before the IPO.

In the first half of 2025, Shenghuo Holdings distributed dividends of 77.6 million yuan to shareholders, plus 10.4 million yuan in dividends for 2024, totaling approximately 88 million yuan. During 2023 to 2025, the company’s net profit totaled about 99 million yuan. The total amount of dividends accounted for nearly 89% of the net profit over the past three years, nearly a “clearance-style” dividend. In terms of equity, over 84 million yuan of related dividends flowed into the pockets of Zhong Jian and Luo Xinyan.

Regarding the reasons for the large dividends, Shenghuo Holdings did not provide a clear explanation in the prospectus, only stating that “dividends are to reward shareholders.” However, in conjunction with the IPO aspirations, this dividend behavior resembles a “harvesting” by the actual controllers before the public listing—early dividends can quickly realize current profits and reduce the risk of uncertainty in future listings.

It is reported that the fundraising purposes for Shenghuo Holdings’ IPO include: enhancing marketing solutions and capabilities through upgrading and developing AI vertical intelligent agents, expanding coverage in Southeast Asia and other regions, expanding the domestic customer base and business operations through acquisitions, opening new offices domestically to expand the business landscape, and supplementing general working capital.

Shenghuo Holdings stated that it has established an AIGC Intelligent Marketing Innovation Laboratory, focusing on using AI technology to create marketing materials in AI vertical intelligent agents. Investors should also keep an eye on how much funding the company can raise through the IPO and strengthen its deep application in AI. (Produced by Siwei Finance)