Aqara pushes for Hong Kong IPO: net loss widens by 102% over three years, current ratio only 0.3, highlighting repayment pressure

Main Business: Full-Stack Space Intelligence Infrastructure Service Provider

Aqara positions itself as a provider of space intelligence infrastructure and builds a full-stack business model of “hardware + software + services.” Its core business is developing the space intelligence operating system platform, transforming physical environments into AI-driven, computable systems. The company’s product matrix covers three major categories: sensors (AI high-precision situational sensors, intelligent cameras, etc.), hubs (intelligent gateways and intelligent screens), and controllers (smart switches, door locks, curtain motors, etc.). As of the end of 2025, it has formed a product system with 50+ categories and 2,200+ SKUs. It has累计activated 56 million devices, with business coverage in 90+ countries and regions, and over 15 million global users.

Its business model consists of two tracks running in parallel: its own brand business and the ODM business. Aqara brand products are aimed at end consumers, while the ODM business provides product development and manufacturing services for partners such as Xiaomi. In 2025, revenue from the own brand accounted for 64.3%, while the ODM business accounted for 33.8%, reflecting the company’s ongoing transition toward an own-brand-led business structure.

Revenue Performance: 2025 Revenue Down Slightly by 1.1%—Growth Stalls

The company’s revenue growth has been lackluster over the past three years. Operating revenue in 2023, 2024, and 2025 was 1.439 billion yuan, 1.489 billion yuan, and 1.472 billion yuan, respectively. In 2025, revenue同比 fell slightly by 1.1%, with the growth rate significantly slowing from 3.4% in 2024.

The stagnation in revenue growth is mainly driven by two factors: first, the decline in ODM business revenue. In 2025, ODM product revenue was 497 million yuan,同比 decreasing by 8.5%; second, uncertainty in the global economy led to weak demand for consumer electronics. Although Aqara brand product revenue remained in growth, it was not enough to fully offset the ODM decline and the overall soft market environment. By region, the overseas market performed strongly. Aqara’s overseas brand revenue increased from 380 million yuan in 2023 to 629 million yuan in 2025, a compound annual growth rate of 28.7%. The proportion of overseas brand revenue rose from 42.2% to 66.5%.

Profitability: Cumulative Net Loss of 713 Million Over Three Years—2025 Losses Widen by 39.7%

The company’s profitability has continued to deteriorate. For three consecutive years from 2023 to 2025, it recorded net losses, with the loss scale expanding year by year. In 2025, the net loss reached 322.4 million yuan, which expanded by 102% compared with 159.5 million yuan in 2023. The年均 compound growth rate was 41.4%.

What is worth noting is that adjusted profit, after excluding items such as fair value changes of convertible and redeemable preferred shares, also performed poorly. In 2025, adjusted profit was 56.85 million yuan, down sharply by 49.7% from 113 million yuan in 2024, indicating a significant weakening in the profitability of the core business. Over the three years, cumulative adjusted profit was only 115 million yuan, which is still insufficient to cover 16.1% of the net losses in the same period—profit quality is a cause for concern.

Gross Margin: Overall Up by 8.7 Percentage Points—ODM Gross Margin Doubles

The company’s overall gross margin shows a steady upward trend, rising from 29.7% in 2023 to 38.4% in 2025, up 8.7 percentage points. This was mainly due to product-structure optimization and improved pricing power in the ODM business.

By business segment, the revenue mix of high-margin Aqara brand products increased. The proportion of Aqara brand product revenue rose from 62.6% in 2023 to 64.3% in 2025. ODM business gross margin increased significantly from 10.8% to 27.0%, gaining 16.2 percentage points over two years, becoming an important driver for gross margin growth. Notably, Aqara’s overseas business gross margin stays at a high level of around 50%, well above the gross margin of 32.8% for domestic business, reflecting a higher product premium capability in overseas markets.

Net Margin: Adjusted Net Margin Fluctuates and Slides to 3.9%

Due to continued net losses, the company’s net margin measured under International Financial Reporting Standards has remained negative. Adjusted net margin (adjusted profit / revenue) shows a volatile trend that first rises and then falls. After reaching a peak of 7.6% in 2024, it fell back to 3.9% in 2025, reflecting insufficient profitability stability.

The decline in net margin is mainly attributable to increased R&D spending and higher selling expenses. In 2025, the R&D expense ratio rose from 12.0% in 2023 to 15.9%, and the selling expense ratio increased from 12.8% to 16.0%. These two factors squeezed profit margins. Although gross margin continued to improve, pressure on the expense side prevented profitability from improving in tandem.

Revenue Mix: Aqara Brand Share Increases—Sensor Products Grow by 20.4%

The company’s revenue mix shows a trend of “increasing share of Aqara brand products and decreasing share of the ODM business,” reflecting a shift in business focus toward higher-gross-margin own-brand products.

Aqara brand product revenue increased from 899.9 million yuan in 2023 to 947 million yuan in 2025, a compound growth rate of 2.6%. Sensor products performed particularly well: revenue grew from 256 million yuan to 308.2 million yuan. Over two years, it grew by 20.4%, with its share increasing by 3.1 percentage points, becoming a key driver of Aqara brand growth. Hub product revenue rose from 82 million yuan to 113.3 million yuan, up 37.8%, with its share increasing by 2.0 percentage points. Controller product revenue, however, declined by 6.6%, with its share decreasing by 3.4 percentage points. ODM product revenue decreased from 519 million yuan to 497 million yuan, with its share falling from 36.0% to 33.8%.

Related-Party Transactions: Xiaomi Revenue Exceeds One-Third—Material Reliance Risk Is Prominent

The company has major related-party transactions with Xiaomi Group. Xiaomi is both the company’s largest customer and an important supplier and shareholder. From 2023 to 2025, revenue from Xiaomi was 472 million yuan, 501 million yuan, and 477 million yuan, accounting for 32.8%, 33.7%, and 32.4% of total revenue, respectively—exceeding 30% for three consecutive years.

In the same period, the company’s purchase amounts from Xiaomi as a proportion of total purchases were 2.8%, 3.8%, and 4.9%, respectively, mainly including parts such as integrated circuits, modules, and adapters. Xiaomi also holds 7.92% of the company’s equity, making it a major related party. The company’s significant reliance on Xiaomi entails potential risks. If Xiaomi adjusts its procurement strategy or reduces orders, it could have a material adverse impact on the company’s operating performance.

Financial Challenges: Current Ratio 0.3, Net Liabilities 2.348 Billion Yuan—Heavy Debt Repayment Pressure

The company faces severe financial challenges, mainly reflected in the following:

2. Ongoing net losses: Cumulative net losses were 713 million yuan from 2023 to 2025, and the loss scale has been expanding year by year. In 2025, net losses increased同比 by 39.7%.

3. Liquidity crisis: As of the end of 2025, the current ratio was only 0.3, and the quick ratio was 0.2. Current liabilities were as high as 3.483 billion yuan, while current assets were only 1.057 billion yuan, indicating severe short-term debt repayment pressure.

4. High net liabilities: As of the end of 2025, net liabilities were 2.348 billion yuan, and the asset-liability ratio was as high as 305.4%, placing the company in a severely insolvent state. Of this, the book value of convertible and redeemable preferred shares was 2.768 billion yuan, accounting for 79.3% of total liabilities. Although the company states that the preferred shares’ redemption rights have been paused, there is still potential for significant debt repayment pressure.

5. Operating cash flow fluctuations: In 2025, net cash outflow from operating activities was 73.41 million yuan, a major deterioration compared with the net inflow of 289 million yuan in 2024, indicating weakened cash-generating ability from the core business.

6. Increased R&D investment: R&D expenses increased from 173 million yuan in 2023 to 234 million yuan in 2025. The R&D expense ratio rose from 12.0% to 15.9%. While this helps with technology accumulation, it further exacerbates profitability pressure in the short term.

Peer Comparison: Global No. 7 Space Intelligence Provider—Market Share Only 1.5%

According to the Frost & Sullivan report, based on 2024 revenue, Aqara is the world’s seventh-largest provider of active AI-driven space intelligence infrastructure, with a market share of 1.5%, and also the largest provider of space intelligence infrastructure in China. The top six global companies are all European and American firms, with a combined market share of 22.4%, significantly ahead of Aqara.

Aqara’s competitive advantages lie in its broad product categories (50+ categories, 2,200+ SKUs), wide global footprint (covering 90+ countries and regions), and deep integration with mainstream ecosystems such as Apple Home (15 categories and 340+ products supporting Apple Home). However, compared with international giants, the company’s scale is still smaller, and there are clear gaps in R&D investment and brand influence.

Customer Concentration: Top Five Customers Contribute 38.9% of Revenue—Xiaomi Reliance Risk Is Prominent

The company has relatively high customer concentration. From 2023 to 2025, the revenue share of the top five customers was 42.7%, 42.3%, and 38.9%, respectively. Revenue share from the single largest customer (Xiaomi) was 32.8%, 33.7%, and 32.4%, respectively, which is significantly higher than the industry average.

High customer concentration is mainly due to reliance on Xiaomi. Although the company actively expands overseas markets and other customers, in the short term it is difficult to change the material risk of reliance on a single customer. If major customers reduce procurement or terminate cooperation, it will have a significant adverse impact on the company’s operations.

Supplier Concentration: Top Five Suppliers Account for 19.3%—Supply Chain Risk Is Relatively Controllable

The company’s supplier concentration is relatively low. From 2023 to 2025, the procurement amount share of the top five suppliers was 21.7%, 19.9%, and 19.3%, respectively. The largest supplier’s procurement amount share was 7.3%, 6.4%, and 4.9%, showing a year-by-year decline.

Major suppliers include Xiaomi, smoke detector manufacturers, safe manufacturers, and others. Most of them are independent third parties, making supply chain risk relatively controllable. The company has built a diversified supplier system, with alternative suppliers for key components, and maintains long-term cooperation with major suppliers, helping to ensure supply chain stability. However, some core components such as certain chips still rely on a single source, which creates the risk of supply interruptions.

Equity Structure: Founder You Yanyun Controls 39.27% of Voting Rights—Equity Is Concentrated

As of the last date of practical feasibility, the company’s equity structure is as follows:

• Single largest shareholder group: composed of founder You Yanyun and ECY Investments controlled by him, holding 18.98% of equity in total and having 39.27% of voting rights
• Nova-M: holds 5.35% equity; Lumi Global controlled by You Yanyun’s sister You Liping holds 70%, and ESOP III holds 30%
• Joy Capital series funds: hold 10.55% in total
• Sunve Hi-Tech: holds 8.37%
• Red Better Limited (Xiaomi): holds 7.92%
• ESOP platform: ESOP I and ESOP II hold a total of 9.17%

You Yanyun enjoys three votes per share through A+ class ordinary shares. Together with a vote deferral agreement, he effectively controls the company with about 39.27% of voting rights, making him the company’s de facto controller. The equity structure is relatively concentrated: the founder’s control is stable, but there is governance risk arising from concentrated ownership.

Core Management Team: Founder-Led, Family Members Participate in Management

The company’s core management team includes:

• You Yanyun: founder, chairman of the board, executive director and chief executive officer; U.S. nationality; has many years of experience in automation and control; responsible for the company’s overall strategy and business development.
• Dr. Lin Zhen: executive director; formerly a research and development engineer at Huawei Technologies Co., Ltd.; responsible for R&D management of the company.
• Ms. Kong Li: executive director; formerly held a position in supply chain management at Huawei Technologies Co., Ltd.; responsible for the company’s supply chain management.
• Ms. You Chenxi: executive director; daughter of You Yanyun; responsible for expanding the company’s overseas business.

As of 2025, the total remuneration for directors was 11.786 million yuan. Over three years, it grew by 28.8%, with a growth rate significantly higher than revenue growth. The executive team has extensive industry experience, but some core executives have familial relationships with the founder, which may affect the company’s governance independence.

Risk Factors: Multiple Risks Interwoven—High Operational Uncertainty

The company faces multiple risks, mainly including:

2. Risk of continuing losses: From 2023 to 2025, there have been consecutive net losses, with losses expanding; in the future, the company may continue to record losses.

3. Customer concentration risk: Significant reliance on Xiaomi, with single-customer revenue accounting for more than 30%.

4. Liquidity risk: The current ratio is only 0.3; net liabilities are 2.348 billion yuan, creating short-term debt repayment pressure.

5. Market competition risk: Facing fierce competition from international giants and domestic peers, making it difficult to increase market share.

6. Supply chain risk: Some core components rely on a single supplier, creating the risk of supply interruptions.

7. Risk from international trade policies: Overseas revenue accounts for 66.5%, and is affected by changes in international trade policies and tariffs.

8. Technology iteration risk: The space intelligence industry evolves quickly. If new products cannot be launched in time, the company will lose competitiveness.

9. Intellectual property risk: There is risk of intellectual property infringement lawsuits, and patent protection has uncertainty.

10. Related-party transaction risk: Major related-party transactions with Xiaomi may harm the interests of the company and its minority and small shareholders.

11. Data security risk: Involves collecting and processing user data, facing compliance risks related to data security and privacy protection.

As an early mover in the space intelligence field, Aqara has technological advantages and a global footprint. However, issues such as ongoing net losses, customer concentration, and tight liquidity cannot be ignored. Investors need to carefully assess the sustainability of the company’s business model and various risk factors, and make rational investment decisions.

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