Smart lock manufacturer Loke Technology has submitted its listing application to the Hong Kong Stock Exchange, marking a formal step toward an initial public offering.
Eight years ago, Xiaomi founder Lei Jun shared an image of a Samsung smart lock in an internal group chat, asking, "Can Xiaomi make this?" Ultimately, the task of developing this product category was assigned to Loke Technology, a startup in which Xiaomi had invested.
As a smart lock company within Xiaomi's ecosystem, Loke quickly secured a significant position in the industry. According to its prospectus, the firm ranked third in mainland China in 2024, holding a 5.8% market share.
However, beneath this apparent success, the prospectus reveals troubling signs: sluggish revenue growth, contraction in multiple business segments, volatile net profits, and the loss of its former industry-leading position. These factors have raised serious market concerns about the stability of its profitability and the sustainability of its business model.
Confronted with severe financial and competitive pressures, the company's directors, led by founder Chen Bin, voluntarily implemented substantial salary reductions in 2025, with the total cut potentially exceeding ten million yuan. This move is seen as an effort to reduce operational costs and smooth the path for the IPO.
This high-stakes listing attempt adds a layer of drama and uncertainty to Loke's journey to going public.
Revenue from its own brand products has declined, while growth in its solutions business has stalled.
Founded in 2014, Loke is a technology company that provides integrated solutions centered on smart locks for home and community security, smart management, and home monitoring.
The prospectus shows that Loke's revenue was 1.015 billion yuan and 1.086 billion yuan in 2023 and 2024, respectively, representing a mere 7% year-on-year growth. Gross profit was 316 million yuan and 383 million yuan for those years, while net profit was 14.03 million yuan and 53.11 million yuan.
In the first nine months of 2025, revenue reached 774 million yuan, an 11.5% increase from 694 million yuan in the same period the previous year. Gross profit was 241 million yuan, compared to 244 million yuan a year earlier. The gross profit margin fell to 31.2%, down 4 percentage points from 35.2% in the prior-year period. Net profit for the period was 31.98 million yuan, versus 6.83 million yuan a year earlier, resulting in a net profit margin of 4.1%.
Regarding revenue structure, in the first nine months of 2025, the company's primary revenue driver was its ODM business, contributing 476 million yuan and accounting for 61.6% of total revenue. This represented significant growth from 350 million yuan in the same period last year and was key to supporting overall revenue.
Conversely, two business segments representing the company's brand strength and core competitiveness showed clear signs of contraction.
First, revenue from its own-brand consumer products declined. In the first nine months of 2025, revenue from this segment was 159 million yuan, accounting for 20.5% of the total. In the same period of 2024, it was 193 million yuan, representing 27.8% of revenue, indicating a notable downward trend.
Second, growth in its own-brand commercial solutions business stagnated. Revenue from this core segment was 121 million yuan, constituting 15.7% of total revenue, nearly unchanged from 130 million yuan a year earlier. Additionally, revenue from other sources was 17.65 million yuan, accounting for 2.2%, down significantly from 21.92 million yuan in the prior-year period.
As of September 30, 2025, Loke's non-current liabilities stood at 82.87 million yuan, while its cash and cash equivalents were 66.73 million yuan.
Baidu and Xiaomi are among its shareholders, while the company faces nearly a thousand consumer complaints.
Since its inception, Loke has received investment from prominent institutions including Baidu, Shunwei Capital, SIG Asia Investments, Zhongguancun Science City, LanTou Capital, Xianfeng, Fosun Group, Legend Star, SVIC, Shuanghu Capital, Kinzon Capital, Nuoli, Xiaomi, and DT Capital.
Prior to the IPO, founder Chen Bin directly holds approximately 15.33% of the interests. Yunding Management Consulting holds about 7.94%, Yunding Enterprise Management holds about 5.54%, and Xingjiang Gengyuan holds about 1.54%. It is reported that Chen Bin, as the general partner, controls Yunding Management Consulting, Yunding Enterprise Management, and Xingjiang Gengyuan. This means Chen Bin collectively controls 30.35% of the company's equity.
Baidu Netcom holds 14.72%, and Baidu Biwei holds 3.71%, giving Baidu a total stake of 18.43%, making it the largest institutional shareholder. Hu Yu, CFO of Xiaodu Technology, serves as a non-executive director of Loke. Shunwei Capital follows with a 7.25% stake.
Other significant shareholders include Haina Hua with 6.49%, Zhongguancun Science City Technology Growth Phase III Fund with 5.71%, LanTou Tianxing with 3.76%, LanTou Yunxiang with 1.06% (LanTou entities collectively 4.82%), Shenzhen Xianfeng with 2.02%, Hangzhou Xianfeng with 1.82% (Xianfeng entities collectively 3.83%), Yadong Beichen with 3.48%, Legend Star with 2.77%, and Silicon Valley Heaven entities with 2.19%.
Despite this strong investor backing, Loke could not maintain its top industry position.
In 2017, after receiving investment from Xiaomi and Shunwei Capital, the Loke Classic model sold 5,000 units within four hours during a crowdfunding campaign in October, becoming the industry's first hit product. However, by 2021, competition in the smart lock industry intensified, and the second and third-ranked companies began to surpass Loke.
Chen Bin previously told media, "Loke's products lacked differentiation; users didn't know why to choose us over Xiaomi. At that point, we essentially abandoned our C-end own-brand business and focused on B2B operations. At the end of 2021, I decided to return to the front lines of the business to revive our own brand, which led to some partners leaving."
He added, "We have gone through many funding rounds and have over twenty shareholders. Some believed we should focus on B2B, which better matches our technical DNA, and avoid the cash-burning C-end brand business. If I were content with just ODM or custom orders for major clients, I could easily cut marketing and R&D expenses by more than half, and the savings would all be profit. Ultimately, most shareholders supported my decision."
According to the prospectus, the company's smart lock shipments in mainland China reached 1.2 million units in 2024, ranking third with a 5.8% market share. The top-ranked company shipped 1.5 million units that year, capturing a 7.3% market share.
Furthermore, negative feedback regarding Loke's product quality and service experience is forming a noticeable wave on social media and consumer complaint platforms. On the complaint platform Hei Mao, consumer complaints against Loke have accumulated to nearly 1,000. The complaints are highly concentrated on core consumer experience issues such as product quality and after-sales service.
Numerous user comments cite problems like "the lock malfunctioned after just six months of use," "complicated and evasive after-sales procedures when issues arise," and "repeated requests for emergency on-site repairs that failed to resolve the problems," highlighting potential shortcomings in Loke's product quality and service delivery.
Executive team implements drastic salary cuts to weather the storm?
The prospectus reveals that Loke's board consists of seven directors: three executive directors, one non-executive director, and three independent non-executive directors. The executive directors are Chen Bin, Tang Hao, and Ms. Huang Kun. The independent non-executive directors are Dr. Yang Huazhong, Dr. Hu Zuohao, and Ms. Chen Xi.
Notably, the prospectus shows that starting in 2025, under the leadership of founder Chen Bin, Loke proactively implemented what can be described as a "halving" of director compensation.
The document indicates that the total remuneration paid to directors was 10.3 million yuan and 16.4 million yuan in 2023 and 2024, respectively. However, in the first nine months of 2025, up to September 30, this figure plummeted to just 2.4 million yuan. If this trend continues, the total director compensation for full-year 2025 will see a sharp contraction compared to 2024, a rare move among companies preparing for an IPO.
Additionally, based on arrangements effective as of the document date, Loke estimates that the total remuneration and payments in kind to directors for the year ending December 31, 2026, will be approximately 5.7 million yuan—only about 30% of the corresponding amount in 2024.
Furthermore, the total compensation for the five highest-paid individuals was 13 million yuan, 18.8 million yuan, and 4.3 million yuan for the year 2023, the year 2024, and the nine months ended September 30, 2025, respectively.
This approach is atypical in the Hong Kong IPO market. Unlike many companies that use substantial equity incentives to secure their core teams during the listing push, Loke has chosen to have its founder lead a reduction in director pay. This sacrifice of short-term management benefits aims to optimize financial metrics and facilitate the implementation of long-term strategy, demonstrating the leadership's determination to navigate challenges collectively.
However, this move is a double-edged sword. Such significant voluntary pay cuts also highlight potential pressures on the company's cash reserves or profitability. Moreover, this adjustment could potentially dampen morale and raise market concerns about the stability of the core team and the long-term incentive structure.
In discussing risk factors, the prospectus states, "Our business is highly dependent on the continued efforts of our senior management and other key personnel, and we may be unable to retain, attract, and develop such talent."
Loke further elaborates, "Our success depends largely on the continued efforts and leadership of our senior management team and other key personnel. Specifically, we rely on the expertise and extensive experience of our founder and CEO, Chen Bin, who plays a critical role in the company's development history and strategic planning. We also depend on the core R&D personnel led by Vice President of Technology Development, Tang Hao, who are crucial to our technological innovation and product development. If any of our senior management or key employees in critical departments such as R&D, sales, and marketing were to leave, it could affect our ability to execute our business strategy and promptly fill any such talent gap, or we might be unable to fill it at all."
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