As the wave of smart manufacturing sweeps across industries, smart manufacturing software solutions have become a core support for driving the transformation and upgrading of the manufacturing sector and building sustainable corporate competitiveness. These solutions deeply integrate artificial intelligence, big data, and automation technologies, enabling a comprehensive evolution of production processes towards automation, intelligence, and efficiency. They facilitate the digital and intelligent transformation of the entire manufacturing process. By aggregating and analyzing production data in real-time, smart manufacturing software systems support intelligent decision-making and optimize process execution, thereby significantly enhancing production efficiency, ensuring product consistency, and strengthening overall corporate competitiveness.

Amidst this thriving industry development, a leading company has embarked on a new journey towards a Hong Kong listing. On February 15, Shanghai Gery Software Co., Ltd. submitted its application for a main board listing on the Hong Kong Stock Exchange, with Guotai Junan International and CMBC Capital acting as joint sponsors. According to a Frost & Sullivan report, Gery is the first Chinese company to achieve comprehensive coverage of software solutions across all segments of the value chain in the pan-semiconductor industry. It provides end-to-end solutions from materials and processing to components, assembly, and downstream applications, covering all sectors within the pan-semiconductor industry. Concurrently, Gery holds the top market share position among local providers of smart manufacturing software solutions for the pan-semiconductor industry in China.

However, an examination of its financial performance reveals that Gery has not yet emerged from its loss-making predicament. From 2022 to 2024, Gery's adjusted net losses were approximately 85.576 million yuan, 126 million yuan, and 102 million yuan, respectively. In the first four months of 2025, its adjusted net loss expanded to 32.43 million yuan. This implies that Gery has accumulated nearly 350 million yuan in losses in less than four years. On one hand, the company showcases significant strengths like full value chain coverage and leading market share; on the other, it faces persistent losses without a clear trend of improvement. Against this backdrop, determining the appropriate valuation for Gery in the secondary market is undoubtedly a critical question warranting deep investigation.

Since its establishment in 2007, Gery has continuously deepened its focus on the smart manufacturing solutions sector. Its development history clearly illustrates how a local industrial software enterprise, through nearly two decades of sustained dedication and technological accumulation, has gradually grown into a key force driving the intelligent upgrade of China's high-end manufacturing. This progress is attributed to Gery's three-step development path: 'from specialization to breadth, from points to areas, and tackling high-end sectors.'

In its early stages, Gery started with semiconductor manufacturing as its core focus, successfully delivering some of China's first semiconductor front-end and packaging & testing Manufacturing Execution Systems. In 2013, it entered the display panel sector, becoming a significant participant in the localization substitution process within that industry, thereby laying a solid technical and industrial foundation. As its capabilities matured, Gery began systematic expansion from 2016 onwards, extending its business into areas like photovoltaics and printed circuit boards. It also undertook its first turnkey project for a full-factory CIM system, marking a transition from a single-point software provider to an integrated solutions supplier. During this period, the company initiated its international business layout, gradually building a cross-industry, cross-regional business system.

Since 2022, Gery has entered a phase focused on conquering high-end sectors and taking a leadership role. It ventured into the frontier field of Micro LED in 2022 and achieved a breakthrough with an 8-inch semiconductor front-end full-factory CIM system. In mid-2023, it completed the localization substitution for a 12-inch semiconductor front-end full-factory CIM system, conquering a key industry high point and achieving a milestone breakthrough. Subsequently, Gery continued to make advances in cutting-edge areas such as CIM for 12-inch semiconductor mass-production fabs, simulation for high-end lithography processes, full-factory CIM for high-end PCBs, and CIM for fully automated Micro LED mass-production fabs. It also progressed with its LOFA AI and equipment control integration project, consistently leading the industry's intelligent upgrade.

To date, Gery can provide customized full-stack smart manufacturing software solutions for clients in the semiconductor, display panel, PCB, and photovoltaic industries. The company's integrated platform covers the entire value chain, from production data collection and process management to advanced big data analytics and AI applications. Relying on five interconnected solution platforms—the Production Operations Platform, Integrated Automation Platform, Intelligent Control Digital Platform, Intelligent Big Data Engine Platform, and Digital Equipment Platform—Gery has established a new generation of digital production architecture.

According to the prospectus, leveraging over 17 years of deep industry experience, Gery has established long-term cooperative relationships with advanced manufacturing enterprises such as SMIC and Tianma Microelectronics. Since 2022, the company has established business relationships with over 290 clients in the pan-semiconductor industry, of which approximately 160 are semiconductor industry customers. In terms of market position, Gery has steadily risen to become the leading domestic vendor. Data shows that in 2024, Gery held an 11.7% market share in China with revenue of approximately 249 million yuan, ranking first among local providers of smart manufacturing software solutions for the pan-semiconductor industry.

Gery's growth into an industry leader has been strongly supported by various investors in the primary market. The prospectus indicates that Gery completed a total of five financing rounds before its IPO. Following its Series D financing in October 2023, its post-money valuation reached 3.5 billion yuan. Notably, Gery's shareholder structure exhibits distinct characteristics of 'state-owned team + industrial capital'. The National Venture Capital Fund for Important Industries, under China Development Bank Capital, holds a 6.96% stake. China Development Manufacturing, led by the national-level China Manufacturing Transformation and Upgrade Fund, holds a 5.65% stake. Shenzhen Qichang, under China Merchants Capital, holds a 4.14% stake. Shenzhen Chenxin, under the China State-owned Capital Venture Investment Fund, holds a 4.14% stake. Shenzhen Investment Holdings, under the Shenzhen State-owned Assets Supervision and Administration Commission, holds a 2.07% stake. The SMIC Haihe Fund, jointly funded by SMIC and Tianjin state-owned capital, holds a 1.62% stake. This demonstrates that Gery has not only gained strong support from national strategic capital but has also achieved deep integration with a core industry player (SMIC), building a solid foundation of capital and industrial synergy for its long-term development.

As the leading local enterprise in China's pan-semiconductor smart manufacturing software solutions field, Gery's commercialization capabilities have continued to strengthen in recent years, as most directly evidenced by the steady growth of its revenue. According to the prospectus, Gery's revenues for 2022, 2023, and 2024 were approximately 110 million yuan, 165 million yuan, and 249 million yuan, respectively, representing a compound annual growth rate exceeding 50%. For the first four months of 2025, Gery's revenue was 81.05 million yuan, a year-on-year increase of 4.23%. Although growth has slowed, it remains on an upward trend.

This sustained revenue growth is primarily driven by the dual engines of its CIM software solutions and Intelligent Control Digital Platform within the smart manufacturing software solutions business. From 2022 to 2024, as the company expanded into other segments of the pan-semiconductor field, revenue from CIM software solutions grew robustly to 75.51 million yuan, 137 million yuan, and 195 million yuan, respectively. Revenue from the Intelligent Control Digital Platform, although fluctuating during the same period, showed an overall upward trend and also contributed to revenue growth. In the first four months of 2025, the overall revenue growth rate slowed, mainly affected by a decline in revenue from its core business, CIM software solutions. Revenue from this business segment was approximately 63.78 million yuan, a decrease of 11.68% year-on-year. However, the Intelligent Control Digital Platform business performed remarkably well, with revenue surging by 263.5% to 15.605 million yuan, effectively offsetting the temporary weakness in the CIM business.

It is important to note that all of Gery's solutions are delivered as customized projects, and the timing of revenue recognition can be influenced by project phases. Therefore, the short-term decline in CIM business revenue might be related to delays in the acceptance milestones of certain projects, and its subsequent performance requires ongoing observation. Revenues from the Intelligent Big Data Engine Platform and the Digital Equipment Platform still account for a small proportion and have not yet effectively gained significant market traction.

Despite continuous revenue growth, Gery's profitability has remained in the red, presenting a classic case of 'revenue growth without profit growth'. From 2022 to the first four months of 2025, its adjusted net losses were 85.576 million yuan, 126 million yuan, 102 million yuan, and 32.43 million yuan, respectively. This situation is primarily caused by two factors. The first is significant fluctuations in gross margin. Data shows that Gery's gross margins for 2022, 2023, 2024, and the first four months of 2025 were 16.9%, 3.4%, 13.2%, and 6.1%, respectively, displaying a clear 'roller coaster' pattern and posing a substantial challenge to profit stability. This exposes a fundamental weakness of its customized project-based business model: individual high-cost projects can easily drag down overall profits, while low product standardization leads to weak pricing power and cost control capabilities. Furthermore, provisions for onerous contracts and inventory impairment losses have exacerbated the volatility of gross profit.

Secondly, high operating expenses have severely eroded profit margins. Data indicates that from 2022 to the first four months of 2025, Gery's operating expenses as a percentage of revenue remained persistently high at 97.65%, 91.48%, 93.11%, and 133.75%, respectively. Within these expenses, research and development investment constituted the largest component, accounting for 47.3%, 46.5%, 47.9%, and 70.8% of revenue during the same periods. This suggests that the company is still in a development stage driven by high-intensity R&D investment, with resources clearly倾斜 towards long-term technological capability building. However, this strategy also exerts continuous pressure on profitability in the short term.

Certainly, Gery's persistent losses are also inseparable from changes in the overall industry environment. Chairman Sun Zhiyan explicitly pointed out that the industry has entered a stage of competition for existing market share, with price wars intensifying due to product homogenization, directly compressing corporate profit margins. However, pricing pressure is not the only challenge Gery faces; it also contends with operational risks associated with high customer concentration. According to the prospectus, from 2022 to the first four months of 2025, contributions from its top five customers were as high as 62.4%, 54.2%, 46.7%, and 52.5% of revenue, respectively, indicating that the company's business remains heavily reliant on a small number of core clients. This structure could expose Gery to potential risks such as limited bargaining power, concentrated credit and collection risks, and earnings volatility.

Additionally, some industry perspectives suggest that traditional CIM systems based on complex code stacks might be reconstructed by 'AI-native' smart manufacturing systems built on large models. If Gery cannot quickly embrace this transformation, its existing technological assets could face the risk of devaluation.

In summary, although Gery has become a leading player among local vendors, it still faces systemic challenges. Its growth model, which exchanges high R&D investment for technological breakthroughs and market position, struggles to achieve financial closure amidst the harsh realities of low-margin project-based work and industry price wars. The company stands at a critical crossroads: whether it can rapidly enhance product standardization and profitability within the window of opportunity presented by import substitution, successfully making the leap from 'using capital to buy market share' to achieving 'self-sustaining profitability,' will determine its ability to weather cycles and truly become a long-term leader in the industry.