When you buy accident insurance while riding a shared bike, receive a delivery liability insurance with your food order, or select flight delay insurance when booking a flight, these fragmented insurance policies embedded in everyday scenarios are giving rise to new faces in the capital markets.

Recently, BAIGE DIGITAL (ASX: 2672) has officially commenced its global offering for a Hong Kong listing. The company is an insurance technology firm primarily providing technology-enabled insurance intermediary services to scenario partners and insurance companies. This company, carrying the halo of being the "first AI-powered insurance tech stock," plans to officially list on the main board of the Hong Kong Stock Exchange on June 29.

However, beneath this光环, the company's financial performance appears somewhat dim.

Initial Public Offering Details

The prospectus shows that from 2023 to 2025, the company achieved revenues of 660 million yuan, 914 million yuan, and 1.227 billion yuan, respectively. During this period, annual losses were 17.18 million yuan, 27.712 million yuan, and 46.669 million yuan, and the company expects to continue incurring losses in 2026. Meanwhile, the overall gross profit margins were only 7.9%, 9.1%, and 8.4%, remaining below 10%.

With the company's listing imminent, the question remains: will investors buy into the story it is telling?

Founder's Journey and Funding History

The company was established in April 2015. Founder and Chairman Tu Jinbo was born in 1976. He graduated from Xiamen University in July 2000 and obtained an Executive Master of Business Administration from the City University of Hong Kong in July 2021. He is currently pursuing a Ph.D. in Artificial Intelligence at Xiamen University.

With over 24 years of experience in the insurance industry and corporate management, this venture represents his second entrepreneurial endeavor. In 2004, he resigned from his two-year position at Ping An Insurance to start his own business, establishing a company focused on the service trade and health sectors. In 2015, amid the rapid development of "Internet+" and a wave of entrepreneurship, Tu identified an opportunity in the insurance industry.

Tu believes insurance should not be a low-frequency luxury but a high-frequency daily necessity. Through technological means, insurance products can become fragmented, timely, and scenario-based, allowing insurance to genuinely penetrate the market.

According to the prospectus, the company's products span nine ecosystems, including shared mobility, food delivery services, auto sales, and public healthcare, ensuring effective methods to address diverse risks across various scenarios rather than narrowly focusing on a single risk type in a specific setting. Partners include companies like Hellobike and FlightStats.

Since its inception, the company has garnered favor from multiple capital sources. From 2018 to 2025, it completed five rounds of financing, raising a total of nearly 145 million yuan. Investors include Xiamen Huicheng, New Hope Investment Group Co., Ltd. (referred to as "New Hope"), and local industrial capital in Xiamen.

Among them, New Hope is the largest external shareholder. In April 2021, it invested a total of 53.3 million yuan through capital increase and equity transfer to acquire a 15% stake. Due to subsequent capital increases and share expansions, its holding has been diluted to the current 13.87%, making it the second-largest shareholder.

In February 2025, the company first submitted an IPO application to the Hong Kong Stock Exchange. It submitted again in August 2025, with both attempts lapsing due to document expiration. On March 18, 2026, after updating its prospectus, the company submitted again and passed the listing hearing on June 16. CMBC Capital and BOCI act as joint sponsors.

According to the global offering announcement, the company plans to globally issue 33.3444 million H shares, with 3.3346 million for the Hong Kong public offering and 30.0098 million for the international offering. It is expected to list on June 29, with an offer price between HK$15.6 and HK$20.28, aiming to raise up to approximately HK$676 million.

The intended use of proceeds includes investing in the research and development of solutions and services, recruiting and retaining relevant R&D talent, and improving infrastructure; expanding the sales network and establishing branches; and seeking acquisition and investment opportunities in target companies within the same industry or upstream/downstream ecosystem partners.

Revenue Growth and Profitability Challenges

The prospectus shows that as of the end of 2025, the company had established cooperation with 260 channel partners and 79 insurance companies. From 2023 to 2025, its revenue grew continuously to 660 million yuan, 914 million yuan, and 1.227 billion yuan, respectively. Based on total premiums in 2025, the company ranked first among third-party scenario-based internet insurance intermediaries in China.

However, over the three years, company profitability moved inversely to revenue. Losses expanded from 17.18 million yuan in 2023 to 27.71 million yuan in 2024, and further to 46.67 million yuan in 2025. The company stated that the increased loss in 2024 was mainly due to higher sales and distribution expenses and R&D costs. The increased loss in 2025 was primarily due to share-based compensation, sales and distribution expenses, and R&D costs.

The company expects to continue incurring losses in 2026 as it will continue to invest resources in researching new solutions, new risk scenarios, and cutting-edge technologies.

Judging from the disclosed data, the revenue growth rate under capital support is indeed notable, yet it comes with losses. This is perhaps the biggest point of contention in the market regarding its "first insurance tech stock" label.

The company's business is mainly divided into three parts: insurance transaction services, precision marketing and digital solutions, and third-party administration services. Insurance transaction services form the primary revenue pillar. From 2023 to 2025, revenue from this business was 536 million yuan, 825 million yuan, and 821 million yuan, accounting for 81.21%, 90.26%, and 66.91% of total revenue, respectively.

It is worth noting that from 2023 to 2025, while the company's gross profit grew overall to 52.1 million yuan, 83.2 million yuan, and 103 million yuan, the corresponding gross profit margins were 7.9%, 9.1%, and 8.4%, remaining below 10%. The gross profit margin for the main insurance transaction service business was 9.1%, 9.8%, and 11.5%, respectively.

The prospectus shows that from 2023 to 2025, referral fees, commissions, and service fees paid to channel partners and individual insurance brokers were 486 million yuan, 743 million yuan, and 725 million yuan, accounting for 90.6%, 90%, and 88.3% of commission income for the respective years. The company believes that as it develops, these referral fees, commissions, and service fees will continue to increase.

An expert pointed out that for a light-asset intermediary platform like this, the key to improving profitability lies in reducing the proportion of channel referral fees and enhancing value-added services.

The expert suggested that first, it can optimize user matching algorithms through technological means to improve conversion rates, thereby reducing reliance on high-cost channels. Second, it should develop its own brand and direct customer acquisition channels, such as enhancing brand influence through content marketing and social media, gradually decreasing dependence on external traffic. Furthermore, exploring deep cooperation models with insurance companies, such as jointly developing innovative products or providing value-added services, can increase the added value per transaction.

Corresponding to the declining proportion of insurance transaction service revenue, the precision marketing and digital solutions business revenue increased to 398 million yuan, a year-on-year growth of 362.79%, accounting for 32.44% of total revenue. The company stated this was mainly due to organic growth from existing projects and contributions from new precision marketing projects. Additionally, TPA service revenue increased from 27.22 million yuan to 76.15 million yuan, a year-on-year growth of 179.76%.

Another analyst noted that the company's precision marketing and digital solution revenue is highly correlated with insurance transaction scenarios, meaning the so-called "revenue structure optimization" is more of a horizontal extension within the same industry chain rather than genuine business diversification.

However, the gross profit margin for precision marketing and digital solutions is even lower, at 0.8%, 2.5%, and 2% from 2023 to 2025. The company stated that as it continues to scale up, it will focus on leveraging its growing market share to negotiate more favorable terms with suppliers, thereby optimizing traffic acquisition costs and improving gross margins. The gross profit margin for TPA services reached 25.2% in 2023 but also fell below 10% in 2024 and 2025.

Research and Development and Client Concentration

The proprietary SaaS application system launched in 2021 is the core technology supporting the company's business operations. As this system iterates and upgrades, the company initiated a digital transformation in 2024 and began developing six MaaS support models driven by machine learning and AI.

However, from 2023 to 2025, while the company's R&D expenses increased to 15.7 million yuan, 32.4 million yuan, and 35.1 million yuan, they accounted for only 2.4%, 3.5%, and 2.9% of operating revenue, respectively. During the same period, the company's advertising and marketing expenses were 37.541 million yuan, 41.909 million yuan, and 61.214 million yuan.

The low proportion of R&D expenditure is not unique to this company among insurance tech firms. For instance, in 2025, another listed company's R&D expenditure was 48.43 million yuan, accounting for 3.3% of revenue; another firm's R&D expenditure was 8.64 million yuan, accounting for 3.5% of revenue. Only one company had relatively higher R&D expenditure of 75.6 million yuan, representing 6% of revenue.

An industry executive previously stated that genuine technology empowerment should penetrate backend processes such as actuarial pricing, intelligent underwriting, anti-fraud risk control, and automated claims settlement. Utilizing big data and AI to achieve personalized product customization and full lifecycle risk management can substantially reduce the industry's comprehensive costs and improve claims settlement efficiency. This is the key for insurance technology to transition from a "traffic logic" to a "value logic."

Furthermore, a significant portion of the company's revenue comes from a limited number of insurance companies. From 2023 to 2025, total revenue from the top five clients was 455 million yuan, 706 million yuan, and 686 million yuan, accounting for 69%, 77.2%, and 55.9% of total revenue, respectively.

The company also stated that any significant change in its relationships with these insurance companies could materially and adversely affect its operating performance. To mitigate such concentration risk, the company will continue to maintain good relationships with existing clients and further diversify and expand the number of cooperating insurance companies.

Industry Context and Listing Rationale

Since 2020, over ten insurance intermediary and technology companies have listed in the U.S. or Hong Kong. Among companies currently in the listing process, besides this one, others are planning Hong Kong listings, while another is considering a U.S. listing.

An analyst believes the company's listing is a continuation of the wave of insurance intermediary companies going public. Regarding the reasons behind this wave, the analyst stated: first, capital exit pressure, as the primary market financing environment tightens, early investors need an IPO channel for exit, which is the most direct motivation; second, the valuation premium of the "insurance + technology" story; third, the industry consolidation window, where small and medium-sized platforms face pressure of "go public or be eliminated," making listing a choice to obtain funds and maintain operations; fourth, the Hong Kong Stock Exchange allows unprofitable biotech and tech companies to list, providing a feasible path for insurance tech companies that "increase revenue but not profits."

Another expert also noted that the recent wave of insurance tech companies seeking listings in Hong Kong or the U.S. is mainly to seek capital market support to accelerate technology and business model innovation. As the digital transformation of the insurance industry accelerates, these companies require substantial funds for R&D of new technologies, market expansion, and talent attraction. Simultaneously, listing can enhance a company's brand awareness and credibility, helping to establish broader cooperative relationships globally.

From the data disclosed in the prospectus, the company's report card is a mixed bag. Although the company's revenue maintains rapid growth and it has achieved the top position among third-party scenario-based internet insurance intermediaries, cumulative losses over three years exceeding 91 million yuan and a long-term gross profit margin below 10% have cast some shadow over the光环 of the "first AI-powered insurance tech stock."

The company's choice to list on the Hong Kong Stock Exchange at this time represents both a crucial leap in its own development and another test for this wave of insurance tech listings.