[IPO Outlook] Mingzhi Technology Heads to Hong Kong: Rising Gross Margin, but These Points Are Worth Noting

Entering 2026, Hong Kong's new stock market has shown strong performance, with several newly listed stocks surging significantly on their first day. $BIREN TECH (06082.HK)$ 、 $RIBOLIFE-B (06938.HK)$ 、 $BUSYMING (01768.HK)$ Several companies recorded impressive gains on their first day of listing, while other newly listed stocks also generally saw varying degrees of rise.

Meanwhile, more 'reserves' are speeding towards the Hong Kong stock market. The Hong Kong Stock Exchange's website shows that Mingzhi Technology Co., Ltd. (referred to as 'Mingzhi Technology') recently officially submitted its prospectus, planning to list on the main board of the Hong Kong Stock Exchange, with CCB International acting as the sole sponsor.

This trip to Hong Kong, Mingzhi Technology intends to use the proceeds raised for:Developing industry-specific component platforms focused on three core areas; expanding manufacturing capabilities and improving production efficiency; further developing sales and marketing networks across various geographic regions, etc.

A leader in niche markets, with multiple commercialized products

As a platform-based medical device company with a history dating back to 2000, one of Mingzhi Technology's core competencies lies in its deep control over the single-use endoscope industry chain.

According to the prospectus, Mingzhi Technology operates in Silicon Valley and China,focusing on the research and development and commercialization of single-use endoscope systems.It is one of the few companies globally that has achieved vertical integration of the supply chain, with operations covering the entire process from self-developed manufacturing of core optoelectronic components and precision parts to complete system assembly.

In terms of product strength,according to Frost & Sullivan data, based on 2024 shipment volumes, the company ranks among the top three brands in the US, Europe, and Japan’s single-use ureteroscope markets,occupying a significant position in high-value global markets. Its developed single-use ureteroscope and cystoscope (with a working channel of 6.6Fr) are among the 'world’s slimmest.'

In terms of product portfolio, Mingzhi Technology has built a diversified brand matrix and a rich product combination. Its proprietary brands include OTU (ONETU®), OTU co-branded products (developed in collaboration with leading medical technology companies), and WiScope®, covering urology, hepatobiliary surgery, respiratory medicine, ENT, gastroenterology, and gynecology.

As of January 23, 2026,the company has eight approved product categories in major global markets (the US, EU, and China) while also having five additional product categories under development.Among these, disposable endoscopes (such as ureteroscopes, cystoscopes, and bronchoscopes) and image processors (OTU-A series main console, OTU-T series portable tablet) form the two core product segments. The former serves as consumable devices to meet clinical precision treatment needs, while the latter ensures image quality through advanced algorithms. Together, they create a complete product ecosystem.

In addition, the cholangioscope, gastroscope, colonoscope, duodenoscope, and neuroendoscope in Mingzhi Technology's candidate product pipeline are expected to achieve regulatory milestones between 2026 and 2027.

Profit for the first three quarters declined, but gross margin remained impressive.

In terms of performance, for the first three quarters of 2023, 2024, and 2025,Mingzhi Technology's revenue reached 135 million yuan (RMB, hereinafter), 141 million yuan, and 117 million yuan, respectively, with year-on-year revenue growth of 3.9% in the first three quarters of 2025.

The revenue growth was primarily due to the market shift towards adopting disposable endoscopes, with increased customer demand driving up the shipment volume of the company’s products. This was offset by a decrease in development and other service revenue following the completion of major service contracts in 2025.

On the profitability side, for the first three quarters of 2023, 2024, and 2025,Mingzhi Technology achieved net profits of 49.99 million yuan, 66.666 million yuan, and 49.922 million yuan, respectively, with a year-on-year decline of 14.49% in net profit for the first three quarters of 2025.This reflects a situation of 'revenue growth without corresponding profit growth,' which is related to factors such as increased R&D expenditures.

The prospectus also disclosed thatMingzhi Technology's overall gross margin was 69.1% in 2023, increased to 72.6% in 2024, and further rose to 73.7% in the first nine months of 2025.The steady increase in gross margin is mainly attributed to cost savings from higher production utilization and improved yields of in-house designed camera modules, fully reflecting the profitability advantages of the vertically integrated model.

In terms of cash flow, net cash generated from operating activities in the first three quarters of 2023, 2024, and 2025 were 53.605 million yuan, 74.338 million yuan, and 42.797 million yuan respectively, providing a solid foundation for business expansion and R&D investment with continuous cash inflows.

Additionally, as of September 30, 2025, the company's cash and cash equivalents amounted to 127 million yuan.

High customer concentration and several other points worth noting.

Beyond financial performance, WiseTech has some other aspects worth paying attention to.

According to the prospectus, although the company’s revenue maintained growth, the rate was relatively moderate, with year-on-year revenue growth of 4.4% in 2024 and 3.9% in the first three quarters of 2025.This does not reflect the synchronized high growth of the industry.Data shows that the compound annual growth rate of the global disposable endoscope market between 2024 and 2032 is projected to be 17.2%.

In addition,WiseTech also faces potential risks due to high customer concentration.According to the prospectus, the company’s customer base mainly consists of distributors. In 2023, 2024, and the first three quarters of 2025, revenue from the top five customers accounted for approximately 67.2%, 62.6%, and 69.9% of total revenue respectively, while the largest single customer (Customer A) contributed 41.5%, 31.6%, and 36.0% of total revenue respectively.

This highly concentrated client structure implies that the company's revenue stability is overly tied to a few major clients, which deserves attention.

Conclusion

Overall, WiseTech can be considered a relatively "small but beautiful" enterprise, holding a solid position in certain niche markets with high gross margins and steady profitability. However, its revenue scale and growth rate are mediocre, and there was an instance of "revenue growth without profit growth" in the first three quarters of 2025, points that also merit attention.

Author: Yun Zhifengqi

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