According to the financial app Intelligence, as a key introduction company by the Jing'an District government of Shanghai, China's first stock in the DaaS industry, Lingxiong Technology (02436), has taken substantial steps to strengthen its layout in the Eastern China market. Recently, Lingxiong Technology's wholly-owned subsidiary, Lingxiong Technology (Shenzhen) Co., Ltd. (referred to as "Lingxiong Technology"), has established Lingxiong Meibang Technology (Shanghai) Co., Ltd. (referred to as "Lingxiong Meibang") in Shanghai and officially started operations.

Through this company, Lingxiong Technology aims to integrate high-quality industry resources, expand its national market share in document printing equipment solutions, further consolidate and enhance its nationwide service capability and key regional market penetration of DaaS services, and contribute actively to the creation of a high-level industrial cluster in Shanghai's Jing'an District.

Significant "chain-effect" of the industry leader receiving key government introduction and support.

Since the beginning of this year, Jing'an District of Shanghai has frequently extended an olive branch to Lingxiong Technology. On August 31, 2023, Lingxiong Technology was invited to the Jing'an District Mayor's symposium. On the same day, at the Shenzhen Special Session Promotion Ceremony of the "Monthly Push" event, a key platform of Jing'an District, Lingxiong Technology, and 8 other leading companies in various fields signed a strategic cooperation agreement with the Jing'an District Government of Shanghai.

It is understood that the "Monthly Push" series of events by Jing'an District is an important part of the 2023 investment promotion efforts in Jing'an District. It aims to enhance the region's comprehensive strength in investment promotion, targeting leading companies in strategic emerging industries such as new tracks, data intelligence, biotechnology, etc. To provide a favorable business environment for the key introduction companies, since March 2023, the Jing'an District government has successively released important policies such as "Several Policies to Accelerate the Attraction and Cultivation of Innovative Leading Enterprises to Create High-Level Industrial Clusters in Jing'an District" and "Implementation Opinions on Accelerating the Construction of the "Shanghai Shibei Hi-Tech Private Enterprise Headquarters Agglomeration Zone" in Jing'an District," vigorously supporting the high-quality development of key introduction companies.

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 a leading company in the billion-dollar level DaaS industry, the first listed company, and it has a strong "chain-effect."

Reportedly, Lingxiong Technology is China's largest enterprise-level DaaS supplier, providing comprehensive services including IT equipment subscriptions, IT tech subscription services, asset management SaaS, and IT equipment recycling, to comprehensively address the equipment full life cycle management issues faced by Chinese companies, helping companies 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 demonstration platform for public services for small and medium-sized enterprises, a national-level specialized, special and new "little giant" enterprise, the only enterprise in the DaaS industry to receive this "double certification." In addition, Lingxiong Technology is also a national high-tech enterprise. Data shows that Lingxiong Technology achieved a significant revenue growth against the trend to 1.664 billion yuan in 2022, continuing to maintain its industry-leading position.

Regarding the role as the "chain-leading" enterprise engine, in recent years, Lingxiong Technology has continuously enriched the digitalized closed-loop DaaS service content and application scenarios, united more strategic partners, gradually establishing a vast DaaS ecosystem circle, empowering more enterprises with a comprehensive DaaS service solution for high-quality development. At the same time, it has been actively promoting the formation and widespread application of related standards and norms in the domestic DaaS industry, such as actively participating in the drafting and formulation of standards such as the "Standard for Information Security Management of Waste Mobile Terminals," "Classification and Coding Standard for Credit Service Industry," "Standard for the Construction and Management of Internet Second-hand Goods Trading Platforms," etc. In March 2023, as the main drafting unit, the national standard "Enterprise Credit Evaluation Indicators" has been officially released and implemented.

These measures are gradually helping to promote the standardization and maturation of the entire industry. According to a research report from Torch Insight, the DaaS market size in China has increased from 10.2 billion yuan in 2017 to 34.5 billion yuan in 2021. The entire market size is expected to maintain a compound annual growth rate of 32% over the next few years and reach 138.2 billion yuan in 2026.

Some experts point out that Linoxun's strong comprehensive strength and the driving and gathering capability of a powerful industry chain are highly consistent with the development plan of Jing'an District in Shanghai. The "two-way journey" of the two is a natural and logical development.

Furthermore, according to Linoxun's planning, it will establish its regional headquarters in the eastern region of Shanghai, integrating wisdom savings, green sharing, and comprehensive 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 eastern regional headquarters aims to leverage Shanghai's regional advantages, industry strengths, and talent advantages to radiate the entire Yangtze River Delta region and facilitate the convenient sharing of digital DaaS services, enhancing the long-term sustainable growth of Linoxun's overall business.

Strategic shareholders strongly support Shanghai's development and firmly bullish on the future.

Of particular note, Linoxun Technology was actively introduced by the Jing'an District government and quickly established Linoxun Meibang in Shanghai, with strong support from its strategic shareholder, Shenzhen Dachen Caizhi Venture Capital Management Co., Ltd.

In March of this year, the Jing'an District government released the "Several Policies on Accelerating the Attraction and Cultivation of Innovative Leading Enterprises in Jing'an District to Create a High-level Industrial Cluster," explicitly focusing on constructing a large enterprise open innovation accelerator. The eastern regional headquarters planned by Linoxun Technology is part of the "Jing'an District Large Enterprise Innovation Open Accelerator" project in collaboration with Dachen Caizhi, and the operation of Linoxun Meibang in Shanghai is an important step in project implementation.

As a renowned investment institution, Dachen Caizhi has been accompanying Linoxun Technology as a strategic shareholder for 6 years, providing long-term strong support and firmly believing in the development of Linoxun Technology. "After observing for many years, whether it's operational capability, management capability, or profit growth, Linoxun Technology performs very well. Each stage completely meets our investment expectations. This is also the main reason why Dachen Caizhi has increased investments in four consecutive rounds," said Huang Yuewei, General Manager of Dachen Caizhi's Shanghai branch.

"As the top company in the DaaS industry, Linoxun Technology has built core barriers that are difficult to surpass, leading to an increasing market share in the future. Therefore, Linoxun Technology's future revenue size and profit level have great room for imagination. Thus, its overall market performance will be very good," added Huang Yuewei, emphasizing that this is a typical characteristic of value stocks.

Furuihai from the East and Shenzhen High-Tech Investment Group (referred to as 'Shenzhen High-Tech Investment'), who are also strategic shareholders, have expressed a high degree of agreement. Chen Liwei, a partner at Furuihai from the East, highly regards Linox Technology's business model, strong growth capabilities, and digital construction capabilities, stating that 'its future value space is enormous.' Tang Mengyuan, general manager of Sun Xuan Equity Investment Fund Management Co., Ltd., a subsidiary of Shenzhen High-Tech Investment under Shenzhen High-Tech Investment, stated that Linox Technology, as a leading company in the industry, has highlighted its service value, solid profit model, significant economies of scale, and will achieve more sustainable development in the future, 'firmly bullish on the future development and value of Linox Technology.'

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

In fact, Linox 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 Linox Technology's parent company, Linox Technology, successfully went public on the Hong Kong Stock Exchange, an important strategic plan was to continue enriching product categories and enhancing service capabilities, deepening cooperation with strategic shareholders and business partners, further expanding core city penetration, and increasing market share in target markets.

According to senior observers, the establishment and operation of Linox Meibang is actually laying a solid foundation for Linox Technology to build its East China regional headquarters. The observer further analyzed that Linox Technology has subsidiaries in nine core first and second-tier cities such as Beijing, Shanghai, Guangzhou, and Shenzhen, covering a wide range of regions including Jing-Jin-Ji, the CNI Yangtze Index, the Yangtze River Economic Belt, and the CNI Zhujiang Index. These regional markets have relatively high awareness of DaaS services, but there is still huge room for expansion in the penetration of the DaaS market. 'Linox Technology holds approximately 4% of the national DaaS market share. Despite consistently maintaining the industry's top position, there is still huge room for development. To further increase market share, the most effective way is to form strong alliances and 'yield' to core first and second-tier cities.'

It is reported that Chen Dongsheng has joined Linox Technology and assumed the position of general manager of Linox Meibang. Chen Dongsheng is a senior practitioner in the DaaS industry with over 20 years of management experience in providing comprehensive document printing equipment leasing solutions to clients in various fields, with a strong influence in the Shanghai-centered Yangtze River Delta document printing leasing service market. Chen Dongsheng's joining undoubtedly plays an important role in helping Linox Technology achieve its strategic objectives in the East China region.

'In terms of the strategic cooperation match, Chen Dongsheng is a very good partner for Linox Technology. Both parties can fully leverage their core strengths to provide enterprise users with comprehensive stack document printing equipment solutions, IT equipment subscriptions, and other services, better assisting enterprises in reducing costs and increasing efficiency. Through Linox Meibang, Linox Technology can further enhance its penetration in the Yangtze River Delta DaaS market, strengthen and enhance national service capabilities, and most importantly, accelerate the strategic layout of document printing business in the national market.' The above analyst added.

Haitong International's research report believes that the industry's core barriers constructed by Linox Technology include: first, the closed-loop DaaS ecosystem can generate strong synergistic effects, significantly improve the utilization rate of IT equipment, consolidate its cross-selling with high customer stickiness; second, a perfect and robust recycling and refurbishment industry chain, which provides strong support and synergistic effects for equipment subscription services; third, the intelligent risk control system is crucial to the development of DaaS business, and the company maintains a very low bad debt rate year-round; fourth, the strong support of strategic shareholders.

The head of the Linox Research Institute stated that Linox Meibang carries an important strategic mission for Linox Technology and will naturally receive the core resources of Linox Technology to help this new company quickly establish itself. Specifically, while operating based on Linox Technology's mature business model, Linox Meibang will further share the rich resources of Linox Technology's strategic shareholders such as Tencent, JD.com, Lenovo, such as JD.com's traffic entrance of tens of millions of enterprises and convenient storage management, logistics, and distribution services, Tencent's batch enterprise customer resources in the venture space. 'It can be said that Linox Meibang has a very high starting point.'

In recent years, as major enterprises have paid high attention to cost reduction and efficiency improvement, and highly valued cash flow, DaaS services are becoming essential for the operation of major enterprises. Under this backdrop, Lingxiong Meibang, which integrates numerous core resources, has received strong support from the Jing'an District government in Shanghai, and the development prospects are promising. The person in charge of Lingxiong Technology expressed.