New Stock Preview | Qingtian Full Tax Pass: The leading player in financial and tax SaaS, with growing performance fluctuations.

The market for digital solutions in Chinese finance and taxation is showing explosive growth trends - the market size is expected to increase from 533 billion yuan in 2019 to 1,006 billion yuan in 2024, with a compound annual growth rate of 13.5%. It is projected that by 2029, the industry will continue to maintain a growth trend, with the market size reaching 1,833 billion yuan. At a time of rapid industry growth, the industry leader, Qingtian Quanshui Tong, is also preparing to make a big splash in the secondary market. On October 17th, Nanjing Qingtian Quanshui Tong Information Technology Co., Ltd. (referred to as "Qingtian Quanshui Tong") officially submitted an application for listing on the main board of the Hong Kong Stock Exchange, planning to list on the main board of Hong Kong, with CICC and ICBC International serving as joint sponsors. Founded in 2012, the company is a leading cross-border enterprise digitalization services provider in China, specializing in providing comprehensive collaborative solutions covering business, finance, and tax for import and export trading companies. The core business includes cross-border enterprise intelligent finance and tax, invoice collaborative management, and cross-border enterprise risk control and compliance solutions, achieving enterprise digital transformation through big data, AI, and other information technologies. In this Hong Kong IPO, Qingtian Quanshui Tong plans to use the raised funds mainly to enhance its competitive advantage through technological innovation; implement diversified sales strategies and product positioning to achieve market innovation; carry out strategic investments and acquisitions, supplement operating funds, and meet general company operating purposes. So, what is the real investment value of Qingtian Quanshui Tong? Leading in the field of finance and tax SaaS, performance fluctuates and grows As one of the first domestic service providers focusing on export finance and tax digitization, Qingtian Quanshui Tong has become a true leader in the industry. According to the prospectus, based on the revenue in 2024, Qingtian Quanshui Tong ranks first in the Chinese market for intelligent finance and tax solutions for cross-border enterprises, with a market share of 1.7%, and ranks second in the market for digital solutions for cross-border enterprise finance and tax, with a market share of 1.2%. Since its establishment, the company has reached nearly 420,000 foreign trade export enterprises and cross-border e-commerce enterprises, serving approximately 160,000 users, becoming one of the leading enterprises providing cross-border enterprise digital solutions (based on customer group). By 2024, Qingtian Quanshui Tong has over 60,000 active users, of which about 27,000 are paying customers. As of December 31, 2024, Qingtian Quanshui Tong's market penetration rate is approximately 10%, with a clear advantage in the Yangtze River Delta region. At the same time, the company's product matrix is complete, and it has created a full-chain digital solution - Qingtian Quanshui Tong has evolved from a single tax refund tool to a comprehensive service platform covering tax digitization, supply chain collaboration, SaaS subscription services, and data services. This "one-stop" service capability enhances customer stickiness, increases average revenue per user, and creates cross-selling opportunities. Thanks to the above layout, Qingtian Quanshui Tong's revenue scale has gradually expanded, and overall performance shows fluctuating growth. According to the prospectus, from 2022 to 2024, the company achieved revenues of 120 million yuan, 161 million yuan, and 171 million yuan respectively, showing year-on-year growth. As of the first half of 2025, Qingtian Quanshui Tong's revenue was 63.82 million yuan, a year-on-year growth of 4.5%. Unlike the year-on-year growth in revenue, Qingtian Quanshui Tong's gross profit and net profit have shown fluctuations - from 2022 to 2024, the company's gross profit was 99.91 million yuan, 134 million yuan, and 120 million yuan respectively, and net profit was 55.27 million yuan, 153 million yuan, and 47.6 million yuan. As of the first half of 2025, the company's gross profit was 42.92 million yuan, a year-on-year decrease of 18.36%, and net profit was 7.22 million yuan, a year-on-year decrease of 74.9%. The significant decline in profitability in the first half of 2025 may be a result of increased hardware costs leading to gross profit margin compression, as well as a significant loss of core customers. To meet customer demands, Qingtian Quanshui Tong added hardware (such as scanners, computers, etc.) integrated into its solutions during the period. The increase in hardware costs has led to a decrease in overall gross profit margin. In addition, the number of medium and large-sized customers for the company's main business, the "Cross-border Enterprise Intelligent Finance and Tax Solution," decreased by 78.17% by the end of the first half of 2025. However, despite the decline in gross profit margin in the first half of 2025, the company's overall gross profit margin remains at a relatively high level: from 2022 to the first half of 2025, the company's gross profit margin was 83.5%, 83%, 70%, and 67.3%, although it has declined, it still remains above 50%, in line with the normal profit level of software and SaaS service companies. Based on the above, Qingtian Quanshui Tong's performance profile is that of a growing company in a "strategic transformation period," combining stability and growth. Although it has sacrificed short-term profits to invest resources in research and development and market expansion, in exchange for long-term competitiveness and market share, the company's growth prospects remain promising in the long run. In the race of "long slope and thick snow," opportunities and challenges coexist The track Qingtian Quanshui Tong is on is the market for enterprise intelligent finance and digital services, especially in the field of cross-border finance and taxation. This track is currently at a critical juncture where opportunities and changes coexist. On one hand, policy-driven changes are driving significant demand. The core of the "Golden Tax Phase IV" is "tax governance with numbers," by using big data, cloud computing, and other means to achieve comprehensive and multi-dimensional tax supervision over enterprises. This increases the risk of traditional manual accounting and non-compliant tax planning, requiring enterprises to digitally upgrade for compliance and survival, thus creating a huge and rigid market demand for vendors like Qingtian, who can provide integrated business finance tax solutions. On the other hand, the booming development of cross-border e-commerce is driving demand for cross-border finance and tax services. China's cross-border e-commerce exports are growing steadily, and related enterprises have complex and professional requirements in areas such as export tax refunds, forex management, VAT declaration, etc. Service providers who deeply cultivate in the field of cross-border finance and tax will directly benefit from this industry boom. Qingtian's accumulation in the field of export tax refunds makes it one of the core beneficiaries of this trend. In addition, the shift from local deployment to cloud-based SaaS subscription models for software services is a trend. This changes the business model from one-time revenues to sustainable recurring revenues, which helps enhance enterprise valuations. At the same time, cloud services lower the barriers for small and medium-sized enterprises, facilitating market penetration, which also creates development conditions for Qingtian Quanshui Tong. However, it is important to note that this is also an industry filled with certain "challenges." First, fierce competition: There are many market participants, including traditional ERP giants such as Yonyou and Kingdee, as well as many emerging finance and tax SaaS startup companies, intense competition may lead to price wars; Second, policy uncertainty: While the industry is policy-driven, it is also affected by policy changes. Any major adjustments in tax policies may require service providers to quickly iterate products, resulting in R&D cost pressures. In this context, Qingtian Quanshui Tong also faces the risks of a single business structure and significant customer loss. It is reported that the company's revenue is highly dependent on the "Cross-border Enterprise Intelligent Finance and Tax Solution," accounting for over 80% of its revenue. If the cross-border e-commerce industry experiences fluctuations or its core export tax refund policy undergoes drastic changes, the company will face significant performance risks. In addition, significant customer loss of medium and large-sized clients is also a signal worth paying attention to. This may stem from issues such as competition, pricing, or service capabilities. At the same time, a shift in customer base towards smaller clients, while expanding coverage, may mean a decrease in average revenue per user and profit contribution. In conclusion, Qingtian Quanshui Tong's moat lies in its deep policy genes, absolute authority in the field of export tax refunds, and a complete product line built around the "Golden Tax Phase IV," which are core competitive strengths that are difficult to be disrupted in the short term. However, overcoming the erosion of gross profit by hardware business and curbing significant customer losses are also issues the company currently needs to address, as this relates to the assessment of the company's investment value in terms of "strengths" and "weaknesses."