Founded in 2007, XAG Tech is dedicated to empowering agriculture through technology, and its main business is to provide intelligent agricultural equipment and intelligent agricultural management system.
The Shanghai Stock Exchange (SSE) recently suspended the listing review of XAG Tech (Chinese: 极飞科技) because the issuer withdrew its listing application or the sponsor withdrew its recommendation.
Previously, XAG Tech has closed six rounds of funding from top companies and institutions including GL Ventures, Baidu Capital, Sinovation Ventures and SoftBank Vision Fund.
However, over the past five years, XAG Tech’s net loss has continued to grow. Data from the prospectus shows that the company’s net loss increased from CNY6.72 million (US$1 million) in 2018 to CNY85.12 million (US$12.65 million) in 2021.
As a reason for the loss, XAG Tech explained that the company operates in a fast-growing industry, so market competition is intensifying. In addition, the company is currently investing heavily in research and development, and new products are still in the promotion phase, so the sales size effect has not yet been felt.
Also, the company mentioned in the risk warning section of the prospectus that it has risk of R&D failure and inability to industrialize R&D results.
The company expects to break even within the next two years. However, it is still questionable whether this can be achieved.
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