Shangrui Technology Co., Ltd. (hereinafter referred to as "Shangrui Tech") responded to the Beijing Stock Exchange's first-round inquiry on August 27. In terms of shareholding structure, actual controller Cheng Tianle leverages a 19.10% direct stake to command 48.21% of voting rights, while Wang Bao'an and his wife control as much as 20.70% of voting power with only a 7.88% shareholding—a clear divergence between voting rights and economic interests. What draws even more attention is that core shareholder Xin Yonghong, a senior executive at the postal system, repeatedly entrusted relatives to hold shares on his behalf due to "restrictions imposed by his employer on employees' external investments." This proxy shareholding arrangement spans four major shareholding platforms and involves multiple founding shareholders and their relatives, creating a deeply intricate structure.
Meanwhile, actual controller Cheng Tianle bears a bet-on agreement with a "resurrection clause." If the company fails to complete its IPO before December 31, 2025, the repurchase obligation would automatically be reinstated. That deadline has now passed, yet whether the repurchase clause has been triggered and whether the actual controller can fulfill his obligations remains unresolved. On the business and financial front, the company's main brand revenue share has slid from 73.14% to 59.38%, signaling that its touted "private-label-first" strategy is losing momentum. Sales in the U.S. market account for as much as 82.54% of total revenue, with Amazon as a single channel contributing over 66% of income. In the first half of 2025, net cash flow from operating activities plummeted to -82.89 million yuan, diverging sharply from net profit. Inventory surged from 201 million yuan to 381 million yuan, climbing to 43.75% of total assets. Additionally, the company hastily distributed a 20 million yuan dividend shortly after the audit cut-off date, bringing cumulative dividends to 70 million yuan while simultaneously seeking to raise 321 million yuan from the market.
Postal Executive's Proxy Shareholding Concerns and the Founder's Bet-on Agreement Burden
Shangrui Tech's predecessor was Dongguan Shangrui E-Commerce Co., Ltd., co-founded by Cheng Tianle, Liu Guizhong, Li Ailing, Yang Silin, Li Zhihua, and Zhou Sijie. It was registered with the Dongguan Administration for Industry and Commerce on January 21, 2011, with an initial registered capital of just 500,000 yuan. Founder Cheng Tianle, born in 1981, holds a master's degree from the University of London. He previously served as a key account manager for eBay China and later as B2C channel sales director at Zetop Network, a major consumer electronics seller. In 2011, Cheng and his entrepreneurial partners established the company at the Songshan Lake Overseas Students Pioneer Park in Dongguan.
Looking at the equity evolution, the company's first capital increase occurred in July 2012, raising registered capital from 500,000 yuan to 5 million yuan. After multiple rounds of equity adjustments and changes, the company was listed on the National Equities Exchange and Quotations (NEEQ) on May 27, 2025. Before filing, actual controller Cheng Tianle directly held 19.10% of shares and indirectly controlled 29.11% of voting rights through controlling shareholder Dongguan Banfu, giving him aggregate control of 48.21% of voting rights. Xin Yonghong and his son Xin Cheng together hold 10.67% of the company's shares. Xin Yonghong has deep roots in the postal system, having served as deputy director of Dongguan Post Office and general manager of Guangdong Provincial Postal Express Logistics Co., Ltd.'s Dongguan branch.
Wang Bao'an and his wife Wang Qiuyun hold 7.88% of the company's shares through Dongguan Shangyue and Dongguan Yunzhirui, yet control as much as 20.70% of voting rights. Wang Bao'an also serves as a company director, and his controlled entity, Dongguan Qixin Industrial Investment Co., Ltd., has related-party transactions with the company involving property leases and equipment rentals. Additionally, Li Zhihua directly holds 5.74% and indirectly holds 1.41% through Dongguan Banfu, for a combined 7.15% stake. Notably, core shareholder Xin Yonghong (formerly the second-largest shareholder) repeatedly entrusted his brother-in-law and sister to hold shares on his behalf due to "employer-imposed restrictions on employees' external investments." The proxy shareholding relationships are deeply intertwined: both the proxy holders and the principals involve multiple founding shareholders (such as Cheng Tianle, Xu Jin, Li Ailing, Yang Silin, etc.) and their relatives (including Fu Honglang, Liu Guizhong, Xin Yafan, Liu Liming, etc.), with these arrangements evolving repeatedly across multiple shareholding platforms (Dongguan Banfu, Ningbo Shangyi, Dongguan Yingcaoshan, Dongguan Shangshi) and corporate entities—a highly complex structure.
The most sensitive risk hidden in Shangrui Tech's equity structure is the bet-on agreement borne by actual controller Cheng Tianle. The prospectus discloses that the company and Cheng Tianle signed agreements containing special rights clauses with investment institutions and shareholders including Suzhou Yuanhai, Dongguan Shangyue, and Dongguan Yunzhirui. Although these clauses have been terminated, they carry a "resurrection clause": if the company's IPO fails or it does not achieve a qualified listing by December 31, 2025, the repurchase clause will automatically be reinstated, and investors have the right to demand that Cheng Tianle personally fulfill share repurchase obligations. The agreed deadline of December 31, 2025, has already passed. Whether the repurchase clause has been triggered and whether it poses potential pressure on the company's future development is not clearly stated in the prospectus. The Beijing Stock Exchange's inquiry letter has already required the company to calculate the range of funds the actual controller would need to fulfill repurchase obligations. If the repurchase amount far exceeds Cheng Tianle's personal disposable assets, it could trigger dramatic changes in the equity structure and even threaten the stability of control over the company.
Also noteworthy is a patent litigation involving the U.S. subsidiary. In September 2025, Shangrui Tech's U.S. subsidiary signed a settlement agreement with the plaintiff, with a settlement fee of $50,000. The Beijing Stock Exchange has required the company to explain the specifics of this patent litigation, including the amount of products involved and their proportion of main business revenue, and whether potential disputes exist.
Private Label Revenue Share Declines Year After Year, Operating Cash Flow Plunges
Shangrui Tech positions itself as a company engaged in the R&D, design, and sales of consumer private-label products, owning brands such as ORORO (functional apparel), TURBRO (home and living), Radioddity (digital technology), and Genmitsu (maker hardware). In 2024, main business revenue reached 1.525 billion yuan, with the four major product categories accounting for 36.57%, 28.23%, 25.74%, and 9.45% respectively. During the reporting period, the company's private-label revenue as a proportion of main business revenue declined from 73.14% to 59.38%. Domestic sales account for only 0.19% of the company's products, while the U.S. market outside China accounts for 82.54% and other overseas non-U.S. markets account for 17.27%. During the reporting period, revenue from the Amazon platform under the B2C model as a proportion of main business revenue was 69.98%, 73.63%, 69.89%, and 66.23% respectively. Although this shows a slow downward trend, the concentration remains at a high level. The Beijing Stock Exchange has explicitly required the company to explain whether Amazon requires exclusive cooperation and whether there is any practice of fake orders or paid ranking manipulation.
During the reporting period, the company's revenue grew from 1.2 billion yuan to 1.532 billion yuan, and net profit attributable to the parent company increased from 77.04 million yuan to 106 million yuan. The gross margin on main business steadily climbed from 39.82% to 45.45%, with functional apparel achieving a gross margin as high as 63.89% in the first half of 2025. In the first half of 2025, net cash flow from operating activities was -82.8921 million yuan, compared with 58.6372 million yuan in the same period of the previous year. The company attributes this primarily to seasonal factors: inventory buildup in the first half for promotions in the second half of the year. At the end of each reporting period, the book value of inventory rose from 201 million yuan to 381 million yuan, with its proportion of total assets climbing from 28.72% to 43.75%.
From 2022 to the first half of 2025, the company distributed a cumulative cash dividend of 70 million yuan to shareholders, accounting for 21.64% of net profit over the same period. On June 26, 2025 (shortly after the initial filing audit cut-off date), the company approved the 2024 profit distribution plan, distributing a 20 million yuan cash dividend, which was promptly paid on July 7. The prospectus discloses that company director Wang Bao'an is the actual controller of related party Dongguan Qixin Industrial Investment Co., Ltd. In 2026, the company expects to collect 50,000 yuan in utility fees and 60,000 yuan in property rental fees from Dongguan Qixin, while paying 970,000 yuan in equipment rental fees and 320,000 yuan in property rental fees to it, totaling 1.4 million yuan in related-party transactions. As of the end of the reporting period, the company had 106 R&D personnel and had obtained 5 invention patents and 56 software copyrights. During the reporting period, R&D investment was 19.8342 million yuan, 23.6156 million yuan, 27.7659 million yuan, and 16.3819 million yuan respectively, accounting for 1.65%, 1.67%, 1.81%, and 2.69% of revenue.
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