You might have come across this toothpaste on Douyin or Xiaohongshu: minimalist white packaging, priced at 9.9 yuan with free shipping. Comments praise it as an affordable gem, while others question its teeth-whitening claims. The company behind this product is Xiaokuo Technology, with the brand named "Canban."
This firm is now aiming for a listing on the Hong Kong Stock Exchange. Recently, Shenzhen Xiaokuo Technology Co., Ltd. formally submitted its application for an initial public offering, targeting to become the first oral care stock on the Hong Kong market.
According to data from Frost & Sullivan, Canban ranked third in China's oral care market in 2025, holding a 6.5% market share. It led the online oral care market. From 2023 to 2025, the company's revenue grew from 1.096 billion yuan to 2.499 billion yuan, while its gross profit margin remained stable at approximately 70%.
However, behind these impressive figures lies another story: the sales expense ratio consistently exceeded 60%, with cumulative marketing expenditures over three years surpassing 3 billion yuan. In contrast, the research and development team comprises only 27 people, with an R&D expense ratio of less than 1%.
Founder Yin Kuo started as an assembly line worker in Dongguan. After over a decade of serial entrepreneurship, he has built a company now heading for an IPO. The question remains: will the market support it?
**Achieving Over 2.5 Billion Yuan in Annual Revenue Primarily from Toothpaste and Mouthwash Sales**
Selling toothpaste for as low as 9.9 yuan per unit, Xiaokuo Technology has managed to generate nearly 2.5 billion yuan in annual revenue.
The company's journey began in 2015. Founder Yin Kuo initially focused on the electric toothbrush sector. However, due to high unit prices, low repurchase rates, and significant inventory costs, the company's funds dwindled to just 270,000 yuan by early 2018. That same year, the oral care brand "Canban" was launched. Nevertheless, during its first two years, Canban ventured into multiple areas simultaneously, including toothpaste, cosmetics, and personal care products, without establishing a core product.
By the second half of 2020, the company's capital had shrunk to 14 million yuan. At this critical juncture, Yin Kuo decided to concentrate all resources on mouthwash. In October 2020, Canban's probiotic mouthwash was officially launched. Leveraging intensive marketing on Douyin and Xiaohongshu, sales exceeded 100 million yuan within 80 days. This breakout product successfully brought Canban into the public eye. Cumulative sales of its portable mouthwash have since approached 300 million units, becoming a major pillar of the brand's growth.
However, mouthwash was never the ultimate goal. Yin Kuo once admitted, "Mouthwash was just a lever; my target has always been the toothpaste market." The company has since narrowed its focus to the oral care sector. Its product range now covers basic categories like toothpaste, mouthwash, toothbrushes, and oral sprays, with over 500 SKUs. The main toothpaste products are priced between 9.9 yuan and 49.9 yuan, catering to both mass and quality-conscious consumer segments.
Currently, the company operates two main brands: the oral care brand "Canban" and the personal care brand "Xiaojiantou." Its business is divided into three segments: basic oral care (toothpaste, toothbrushes), professional and aesthetic oral care (mouthwash, oral sprays, dental floss), and the "Xiaojiantou" segment covering other personal care products (shampoo, body wash, etc.).
Regarding revenue structure, basic oral care products contributed approximately 2.322 billion yuan in 2025, accounting for 92.9% of total revenue. Professional and aesthetic oral care products generated 169 million yuan, representing 6.8% of revenue. Essentially, Xiaokuo Technology is fundamentally a "toothpaste company."
The prospectus shows that from 2023 to 2025, Xiaokuo Technology's revenues were 1.096 billion yuan, 1.369 billion yuan, and 2.499 billion yuan, respectively. Revenue in 2025 increased by 82.5% year-on-year, effectively doubling in less than three years.
According to Frost & Sullivan data, Canban holds the top position in the online channel and also ranks first in the quality toothpaste sub-segment with a 19.2% market share.
However, these impressive market rankings have not translated into sustained profitability. From 2023 to 2025, the company's gross profit margins were 72.1%, 69.8%, and 71.9%, respectively. Despite high gross margins, net profits were not consistently high. Net profit was 41.62 million yuan in 2023, decreased to 34.22 million yuan in 2024, and turned into a loss of 18.25 million yuan in 2025, with the net profit margin falling to -0.73%.
**Hua Chenyu as Spokesperson with Over 3 Billion Yuan in Sales Expenses Over Three Years**
The root of the losses lies in the sales expenses.
From 2023 to 2025, Xiaokuo Technology's sales and distribution expenses were 685 million yuan, 835 million yuan, and 1.534 billion yuan, respectively. These expenses consistently accounted for around 60% of revenue. The three-year total exceeded 3 billion yuan.
Taking 2025 as an example, marketing expenses within sales and distribution costs amounted to 1.374 billion yuan, constituting 89.5% of the total. Employee costs were 94 million yuan, accounting for 6.1%. This means for every 100 yuan earned, the company spent over 60 yuan on promotion.
In terms of specific marketing strategies, in May 2025, Hua Chenyu was officially announced as the brand spokesperson for Canban, deeply involved in brand marketing and product promotion. In March 2026, the collaboration escalated, with Hua Chenyu participating as a co-founder in establishing the new personal care brand "Poinz."
This brand focuses on daily chemical products like mosquito repellent floral water, lip care essence, and hand cream, with individual product prices mainly ranging from 19.9 yuan to 69.9 yuan. Within just one day of launch, the Gross Merchandise Volume across all channels surpassed 21 million yuan. Currently, the brand's Tmall flagship store has attracted 145,000 followers, with over 100,000 followers on Douyin.
As of April 7, 2026, the best-selling item in the "Poinz" Tmall flagship store was a scented moisturizing hand cream priced at 49.9 yuan per tube, with sales exceeding 20,000 units.
The high sales expense ratio directly compressed profit margins. An industry expert commented that for consumer brands reliant on traffic-driven marketing growth, investors are most concerned about whether revenue growth can be sustained once marketing investment slows down.
This marketing-driven growth model is particularly evident in the channel structure. In 2025, online channels still contributed 80.3% of Xiaokuo Technology's revenue, while offline channels accounted for only 19.7%. Its growth is highly dependent on third-party platforms like Douyin. The prospectus itself lists "reliance on third-party platforms" as a risk factor, acknowledging the difficulty of breaking this dependence in the short term.
The personnel structure also reflects this focus. 48.6% of the company's employees work in online operations and content creation. In stark contrast, the R&D team consists of only 27 people. The R&D expense ratio decreased from 1.63% in 2023 to 0.78% in 2025. Total R&D expenses over three years were merely 54.09 million yuan, not even matching a fraction of the annual marketing spend.
The weakness in R&D is closely tied to the production model.
Xiaokuo Technology employs an OEM (Original Equipment Manufacturer) model for its products. The book value of its property, plant, and equipment is only about 8.52 million yuan. This indicates that it is essentially an oral care company with almost no production facilities of its own.
The company collaborates with multiple third-party manufacturers. The procurement concentration from its top five suppliers decreased from 37% in 2023 to 31% in 2025. The prospectus explains this as "diversifying supply chain risk," but it also discloses uncertainties regarding quality control by these third-party manufacturers.
The combination of insufficient R&D investment and the OEM model has led to quality control shortcomings experienced by consumers.
Canban previously used advertising claims such as "170% stain removal improvement in one use" and "271% whitening improvement in three days," which attracted numerous consumer complaints alleging that actual results did not match the宣传. The brand explained that these figures were based on "laboratory machine-test data," not clinical trial results. This suggests a gap between the efficacy promises seen on shelves and the actual user experience.
More notably, according to a report, some whitening toothpastes use colorants to create a visual whitening illusion, and Canban products were mentioned among them. On consumer complaint platforms, some users reported issues like allergic reactions to Canban toothpaste, finding plastic pieces inside the toothpaste, and experiencing gum bleeding after use despite claims of whitening in seven days.
Founder Yin Kuo is not unaware of these problems. He stated that after the final round of fundraising, his first instruction was to deposit all funds in the bank and halt all advertising, regardless of any potential sales drop, until a profitable model was developed.
However, the final round of financing for Xiaokuo Technology occurred in 2021. Since then, advertising has not ceased, and regulatory violations have persisted.
Xiaokuo Technology was fined 3,000 yuan in December 2021 for advertising violations and penalized 12,800 yuan in July 2022 for false advertising.
The tightening regulatory environment now adds further compliance pressure. In December 2023, the "Measures for the Supervision and Administration of Toothpaste" came into effect, explicitly requiring scientific substantiation for efficacy claims and prohibiting medical claims. Companies must upload summaries of efficacy claim evidence for regulatory review by December 1, 2025.
**Serial Entrepreneur from Anhui Faces 580 Million Yuan Valuation Adjustment Mechanism Pressure**
While operational issues remain unresolved, capital market pressures are looming—specifically, a 580 million yuan valuation adjustment mechanism agreement weighing on founder Yin Kuo.
Rewinding to 1989, Yin Kuo was born in Lingbi County in northern Anhui. At 16, he dropped out of high school and ventured south alone. Without a diploma or connections, he started as an assembly line worker in a lingerie factory in Dongguan. He subsequently held jobs as a kitchen helper in a Western restaurant and a foreign trade salesperson, gradually working his way up from the bottom.
In 2011, he embarked on his first entrepreneurial venture, co-founding the smart health hardware brand "Maikai," becoming one of China's earliest smart hardware entrepreneurs. This experience laid the groundwork for his future endeavors. In 2015, Xiaokuo Technology was established, initially continuing the smart hardware approach by entering the electric toothbrush market, but this path proved unsuccessful after two years.
The real turning point came in 2018. That year, Yin Kuo registered the "Canban" trademark and decided to bet on the toothpaste market. For the next two years, he and his team experimented repeatedly on platforms like Xiaohongshu. It wasn't until 2020, when Canban's probiotic mouthwash launched and achieved sales exceeding 100 million yuan within 80 days, that the business truly gained traction.
Capital嗅觉 are always sharp. Between 2018 and 2021, Xiaokuo Technology密集 completed 10 rounds of capital increase. The company's valuation skyrocketed from 50 million yuan to 1.872 billion yuan, a 37-fold increase in three years.
The list of investors reads like a "who's who" of consumer investment circles: ByteDance, Innovation Works, ClearVue Partners, Plum Venture Capital, China Renaissance, and Cornerstone Capital all participated. The largest round occurred in July 2021, led by Huaxing Growth Capital, raising nearly 400 million yuan.
According to the prospectus, Yin Kuo currently holds a direct stake of 21.89%. Through controlling Xiamen Xiaokuo, Shenzhen Xiaokuo, and Shenzhen Mario, he holds a combined stake of 38.98%, making him the actual controller of the company. Plum Venture Capital holds approximately 8.84%, and ByteDance's affiliated entity, Quantum Jump, holds about 4.94%.
However, no new institutional funding has been secured since 2021. Concurrently, the company faces a significant "valuation adjustment mechanism" obligation. As of the end of 2025, the redemption liability on Xiaokuo Technology's books had reached 582 million yuan, accounting for about 60% of its total current liabilities.
The trigger condition is straightforward: if a qualified IPO is not completed within 60 months from the investment date, the company must repurchase the investors' shares using its own funds.
The company stated in the prospectus that the redemption obligation will terminate upon the successful completion of the listing. An expert提醒 more directly: "Failure to complete a qualified IPO within the stipulated timeframe would place immense cash flow pressure on the company."
It is worth noting that Xiaokuo Technology did not pay dividends in 2023 or 2024. However, just before submitting the listing application in 2025, the company distributed 130 million yuan in cash dividends to shareholders.
From Lingbi, Anhui, to the Dongguan assembly line, from 270,000 yuan in capital to a valuation nearing 1.9 billion yuan, Yin Kuo's personal journey has been dramatic. The pressing question now is whether he can lead this toothpaste empire to a successful IPO.
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