On August 14, Flash Technology Co., Ltd. submitted its application to the Hong Kong Stock Exchange, planning to conduct an IPO on the main board.

According to the prospectus, Flash Technology is a Chinese company engaged in providing consumer electronics recycling services, specializing in second-hand mobile phones.

Based on data from Frost & Sullivan, Flash Technology is China's third-largest mobile phone recycling service provider by total transaction value of recycled and sold second-hand mobile phones in 2024, with a market share of approximately 1.3%.

Flash Technology operates as follows:

The company primarily obtains second-hand consumer electronics through trade-in transactions conducted at offline retail stores or online platforms of upstream procurement partners in its recycling system "Flash Recycling." These partners include mainstream consumer electronics brands and their designated distributors, major Chinese consumer electronics retailers, and major mobile network operators. Individual consumers of "Flash Recycling" use their second-hand consumer electronics as partial payment through trade-in programs to purchase new consumer electronics at discounted prices.

Flash Technology then processes the acquired second-hand consumer electronics at its testing and operation centers using proprietary testing, grading, and pricing technologies for resale. The company efficiently distributes these electronics to various buyers in the second-hand consumer electronics market, primarily through its online platform "Flash Quality" and proprietary online stores operated on multiple third-party e-commerce platforms.

While selling second-hand mobile phones may seem like an inconspicuous small business, Flash Technology's revenue has grown significantly year over year due to the accelerated replacement cycle of electronic products.

According to the prospectus, the company's revenue increased from RMB 919.1 million in 2021 to RMB 1.297 billion in 2024, representing a compound annual growth rate of 20%. The revenue growth rate for the first half of 2025 reached an even higher 40.3% year-over-year.

In terms of procurement amounts by supply channel, trade-in purchases accounted for the largest portion at 94.4% in 2024, with the vast majority being offline trade-ins. From the company's annual revenue perspective, sales of second-hand mobile phones constitute basically the entire business, accounting for 94.8%.

While revenue appears to be growing steadily, Flash Technology has actually been losing money due to excessively high sales costs.

Financial data shows that Flash Technology has been losing money for four consecutive years, with total losses exceeding RMB 300 million. The loss in 2024 was RMB 66.443 million, which was less than the previous year's loss.

The main reason for losses is excessively high sales costs. Financial reports show that Flash Technology's sales costs nearly doubled from RMB 688 million in 2021 to RMB 1.235 billion in 2024. With 2024 revenue at only RMB 1.297 billion, this means that annual revenue was almost entirely consumed by sales costs.

The company explains that sales costs mainly include procurement costs of second-hand consumer products, promotional services and commission expenses, and logistics costs paid to third-party logistics service providers.

For Flash Technology to become profitable, it needs to work on reducing these three cost categories.

In the second-hand mobile phone business, stable suppliers are crucial. The prospectus shows that XIAOMI-W appears to be among Flash Technology's top five upstream business partners for enterprise recycling.

According to the prospectus, from 2021 to 2024, Flash Technology's top enterprise recycling upstream business partner has consistently been the same Company A: "A Chinese company listed on the Stock Exchange, which is a consumer electronics and smart manufacturing company with smartphones and smart hardware connected by an IoT platform at its core, and is a mainstream Chinese consumer electronics brand headquartered in Beijing, China."

Although the prospectus does not specify the name of this partner company, considering the above conditions, it easily brings to mind XIAOMI-W (1810.HK), whose headquarters is indeed located at Xiaomi Technology Park, Anning Zhuang Road, Haidian District, Beijing.

The prospectus indicates that Flash Technology purchased consumer electronics worth RMB 3.57 million from this Company A in 2024, accounting for half of Flash Technology's total enterprise recycling procurement value.

Additionally, this Company A frequently appears among Flash Technology's top five suppliers.

In fact, Xiaomi is also an important investor in Flash Technology's operating entity, Shenzhen Flash. According to information, from 2018 to 2019, Shenzhen Flash began Series A financing, and Xiaomi subsidiary Jinmi Investment acquired a substantial stake in Shenzhen Flash.

Besides Jinmi Investment, early investors Hangzhou Shunying and Shunwei Technology also have connections to Xiaomi founder Lei Jun. Both are partnerships, with Lhasa Shunchuang Venture Investment as the general partner. The general partner of Lhasa Shunchuang Venture Investment is Lhasa Shunchuang Capital Management, where Lei Jun holds a 33% stake.

It's also worth noting that SF Holdings has been explicitly mentioned among Flash Technology's top five suppliers over the years.

SF Holdings was Flash Technology's second-largest supplier in 2021, third-largest in 2022, fourth-largest in 2023, and fifth-largest in the first half of 2025. Flash Technology purchases delivery and logistics services from them.

According to the prospectus, Flash Technology was established on May 18, 2016, with founder Liu Jianyi currently serving as Chairman, Executive Director, and General Manager.

Liu Jianyi, now 54 years old, has over 18 years of experience in the telecommunications industry. Before founding Flash Technology, Liu served as Operations Director of a subsidiary of Shenzhen-listed Telling Telecommunication Holding from 2003 to 2012. In 2015, he served as supervisor of a Shenzhen company mainly engaged in buying and selling second-hand mobile digital products, responsible for overseeing channel management strategies and operations. It was perhaps during this time that Liu developed the idea of starting a business in the second-hand electronics field.

Actually, Liu Jianyi's professional background is completely unrelated to electronic products. He graduated from Jiangxi University in China in July 1990, majoring in food science. In 2008, he met independent third party Gao Zibin through business activities.

Due to their similar values and business philosophies, they decided to establish Shenzhen Flash in 2016, leveraging Liu Jianyi's experience in telecommunications-related industries and Gao Zibin's financial resources. Since Shenzhen Flash's establishment, Gao Zibin has only been a passive investor and has not participated in the group's management and operations.