Under the government's emphasis and support, Lingxiong Technology, a newly established company in Shanghai, has taken substantial steps to strengthen its presence in the East China region.

According to the Zhongtong Finance APP, Lingxiong Technology (02436), the leading company in the Chinese DaaS industry and a key enterprise introduced by the Jing'an District Government in Shanghai, has taken substantial steps to strengthen its presence in the East China market. Recently, Lingxiong Technology's wholly-owned subsidiary, Lingxiong Technology (Shenzhen) Co., Ltd. (referred to as "Lingxiong Technology"), established Lingxiong Meibang Technology (Shanghai) Co., Ltd. (referred to as "Lingxiong Meibang") in Shanghai and officially launched its operations.

It is reported that through this company, Lingxiong Technology aims to integrate high-quality resources in the industry, expand its market share in the national document printing equipment solution market, and further consolidate and enhance its national service capabilities and market penetration in key regions for DaaS services. It will also contribute actively to the development of a high-level industrial cluster in the Jing'an District of Shanghai.

Significant "chain effect" of industry leader receives key introduction and support from the government

Since the beginning of this year, the Jing'an District of Shanghai has frequently extended an olive branch to Lingxiong Technology. On August 31, 2023, Lingxiong Technology was invited to participate in a discussion with the district mayor of Jing'an District. On the same day, at the signing ceremony of the "Monthly Promotion" event in Shenzhen, a key carrier in the Jing'an District, Lingxiong Technology and eight other leading companies in various fields signed strategic cooperation agreements with the Jing'an District Government.

It is understood that the "Monthly Promotion" series of activities, as an important part of the investment promotion work in Jing'an District in 2023, aims to enhance the comprehensive investment promotion strength of the region. The focus of investment promotion is leading companies in strategic emerging industries such as new tracks, data intelligence, and biotechnology. In order to provide a favorable business environment for key introduced enterprises, the Jing'an District Government has successively issued important policies such as the "Several Policies to Accelerate the Attraction and Cultivation of Innovative Leading Enterprises to Build a High-level Industrial Cluster in Jing'an District" and the "Implementation Opinions on Accelerating the Construction of the 'North High-tech Private Enterprise Headquarters Agglomeration Area' in Jing'an District" since March 2023, vigorously supporting the high-quality development of key introduced enterprises.

Why did Lingxiong Technology receive key introduction and support from the Jing'an District Government? The reason lies in the fact that Lingxiong Technology is the leading company in the billion-dollar DaaS industry, the first listed company in this new track, and has a strong "chain effect".

It is reported that Lingxiong Technology is China's largest enterprise-level DaaS provider, offering a full-stack service including IT equipment subscription, IT technology subscription services, asset management SaaS, and IT equipment recycling. It comprehensively solves the problem of equipment lifecycle management faced by Chinese enterprises, helping them achieve cost reduction, efficiency improvement, and high-quality development. It is worth mentioning that Lingxiong Technology has been recognized by the Ministry of Industry and Information Technology as a national public service demonstration platform for small and medium-sized enterprises and a national-level specialized and new "little giant" enterprise, making it the only company in the DaaS industry to receive both certifications. In addition, Lingxiong Technology is also a national high-tech enterprise. Data shows that Lingxiong Technology's revenue in 2022 increased significantly against the trend to 1.664 billion yuan, maintaining its position as the industry leader.

In terms of playing the role of a "chain" enterprise engine, in recent years, Lingxiong Technology has continuously enriched the digital closed-loop DaaS service content and application scenarios. At the same time, it has formed partnerships with more strategic cooperation partners, gradually building a large DaaS ecological service circle, and empowering more enterprises for high-quality development with its full-stack DaaS service solutions. At the same time, it has been actively promoting the formation and widespread application of relevant standards and specifications in the domestic DaaS industry. For example, as an important drafting unit, it actively participates in the discussion and formulation of standards such as the "Management Specification for Information Security of Waste Mobile Terminals," "Classification and Coding Specification for Credit Service Industry," and "Construction and Management Specification for Internet Second-hand Trading Platforms." In March 2023, as a major drafting unit, it participated in the drafting of the national standard "Enterprise Credit Evaluation Indicators," which has been officially released and implemented.

These measures are gradually promoting the standardization and mature development of the entire industry. According to a research report by Zhushi Consulting, the size of the Chinese DaaS market has grown from 10.2 billion yuan in 2017 to 34.5 billion yuan in 2021. The entire market is expected to maintain a compound annual growth rate of 32% in the next few years and reach 138.2 billion yuan in 2026.

Experts pointed out that Lingxiong Technology's strong comprehensive strength and the driving and agglomeration ability of its industrial chain are highly consistent with the development plan of Shanghai's Jing'an District. The "two-way convergence" between the two can be said to be a natural fit.

It is also reported that according to Lingxiong Technology's plan, it will establish its East China regional headquarters in Shanghai, which will integrate smart savings, green sharing, and complete functions to create an advanced multi-functional platform covering technology research and development, talent exchange and introduction, regional business coordination, and corporate image display. The East China regional headquarters aims to leverage the regional advantages, industrial advantages, and talent advantages of Shanghai to radiate the entire Yangtze River Delta region, promote convenient sharing of digital DaaS services, and enhance the driving force for the long-term sustainable growth of Lingxiong Technology's overall business.

Strong support from strategic shareholders and a firm long-term outlook for future development in Shanghai

It is worth mentioning that Lingxiong Technology received key support from the Jing'an District government and quickly established Lingxiong Meibang in Shanghai, which is closely related to the strong support from its strategic shareholder, Shenzhen Dachen Cai Zhi Venture Investment Management Co., Ltd. (referred to as "Dachen Cai Zhi").

It is reported that in March of this year, the Jing'an District government issued the "Several Policies to Accelerate the Attraction and Cultivation of Innovative Leading Enterprises and Build High-level Industrial Clusters in Jing'an District," which clearly stated the key construction of open innovation accelerators for large enterprises. The East China regional headquarters planned by Lingxiong Technology is the "Jing'an District Large Enterprise Innovation Open Accelerator" project in cooperation with Dachen Cai Zhi, and the operation of Lingxiong Meibang in Shanghai is an important step in the implementation of the project.

As a well-known investment institution, Dachen Cai Zhi has accompanied Lingxiong Technology as a strategic shareholder for 6 years and has long been a strong supporter and firm believer in the development of Lingxiong Technology. "From years of observation, Lingxiong Technology has performed very well in terms of operational capability, management capability, and profit growth. Each stage fully meets our investment expectations. This is also the main reason why Dachen Cai Zhi has continuously increased its investment for four rounds," said Huang Yuewei, General Manager of Dachen Cai Zhi's Shanghai branch.

"Lingxiong Technology, as the top player in the DaaS industry, has built core barriers that are difficult to surpass, and its future market share will continue to increase. Therefore, Lingxiong Technology has great potential for revenue and profit growth. As a result, its overall market performance in the future will be very good." "Huang Yuewei added that this is the typical characteristic of value stocks.

Similarly, as strategic shareholders, Dongfang Fuhai and Shenzhen High-Tech Investment Group (referred to as "Shenzhen High-Tech Investment") also expressed their high recognition. Chen Liwei, a partner at Dongfang Fuhai, highly regards Lingxiong Technology's business model, strong growth capabilities, and digital construction capabilities, stating that "its future value space is enormous." Tang Mengyuan, General Manager of Shenzhen High-Tech Investment's subsidiary, Shenzhen High-Tech Investment Zhengxuan Equity Investment Fund Management Co., Ltd., stated that Lingxiong Technology, which has already entered the top companies in the industry, has highlighted its service value, has a stable profit model, and has obvious economies of scale. It will achieve even greater development in the future, and we have a long-term positive outlook on Lingxiong Technology's future development and value.

With the support of policies and core resources, the new company has broad prospects

In fact, Lingxiong Technology's plan to establish its East China regional headquarters in Shanghai as an important part of its future strategic planning has long been evident. In November 2022, after Lingxiong Technology's parent company, Lingxiong Technology, successfully listed on the Hong Kong Stock Exchange, an important strategic plan was to continuously enrich product categories, enhance service capabilities, deepen cooperation with strategic shareholders and business partners, further expand the penetration in core cities, and increase market share in target markets.

Senior observers pointed out that the establishment and operation of Lingxiong Meibang is actually laying a solid foundation for Lingxiong Technology to build its East China regional headquarters in the future. This observer further analyzed that Lingxiong Technology has subsidiaries in 9 core first- and second-tier cities such as Beijing, Shanghai, Guangzhou, and Shenzhen, with business scope covering economically developed regions such as the Beijing-Tianjin-Hebei region, the Yangtze River Delta, the Pearl River Delta, etc. These regional markets have relatively high awareness of DaaS services, but there is still a huge room for expansion in the penetration of the DaaS market. "Lingxiong Technology's market share in the national DaaS market is about 4%. Although it has always maintained the industry's first position, there is still a huge room for development. To further increase market share, the most effective way is to form strong alliances and demand 'output' from core first- and second-tier cities."

It is reported that Chen Dongsheng has joined Lingxiong Technology as the General Manager of Lingxiong Meibang. Chen Dongsheng is a senior practitioner in the DaaS industry with more than 20 years of management experience in providing overall printing and copying equipment leasing solutions for clients in various fields. He has a deep influence in the printing and copying leasing service market in the Yangtze River Delta region with Shanghai as the core. Chen Dongsheng's joining will undoubtedly play an important role in helping Lingxiong Technology achieve its strategic objectives in the East China region.

"In terms of the compatibility of strategic cooperation, Chen Dongsheng is an excellent partner for Lingxiong Technology. Both parties can fully leverage their core strengths to provide enterprise users with comprehensive stack printing and copying equipment solutions, IT equipment subscriptions, and other services to help enterprises reduce costs and increase efficiency. Through Lingxiong Meibang, Lingxiong Technology can not only further enhance its penetration in the DaaS market in the Yangtze River Delta, but also strengthen and enhance its national service capabilities. More importantly, it can accelerate the strategic layout of the printing and copying business in the national market," added the aforementioned analyst.

According to Haitong International's research report, the industry's core barriers constructed by Lingxiong Technology include: first, the closed-loop DaaS ecosystem can generate strong synergies, significantly improve the utilization rate of IT equipment, consolidate its cross-selling capabilities, and have high customer stickiness; Second, a complete and powerful recycling and refurbishment industry chain provides strong support and synergy for the equipment subscription service. Third, an intelligent risk control system is crucial for the development of the DaaS business, and the company maintains a very low bad debt ratio year-round. Fourth, the strong support of strategic shareholders.

The person in charge of Lingxiong Research Institute said that Lingxiong Meibang carries the important strategic mission of Lingxiong Technology, and naturally will receive the infusion of core resources from Lingxiong Technology to help this new company quickly gain momentum. Specifically, while operating on the basis of Lingxiong Technology's mature business model, Lingxiong Meibang further shares the abundant resources of Lingxiong Technology's strategic shareholders such as Tencent, JD.com, and Lenovo, such as JD.com's millions of enterprise traffic entrances and the convenience of warehousing management, logistics, and distribution services, as well as Tencent's batch enterprise customer resources in the mass entrepreneurship space. "It can be said that Lingxiong Meibang has a high starting point."

"In recent years, as major enterprises have attached great importance to cost reduction, efficiency improvement, and cash flow, DaaS services have become a must-have for their operations and have shown a booming trend. Against this backdrop, Lingxiong Meibang, which integrates numerous core resources, and has the strong support of the Shanghai Jing'an District government's policies, has promising development prospects." said the person in charge of Lingxiong Technology.