Founded in 2007, XAG Tech is dedicated to empowering agriculture with technology, and its main business is to provide intelligent agricultural equipment and intelligent agricultural management system.
The Shanghai Stock Exchange (SSE) has recently terminated 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 completed six rounds of funding from top companies and institutions including GL Ventures, Baidu Capital, Sinovation Ventures and SoftBank Vision Fund.
However, in the last five years, the net loss of XAG Tech has continued to expand. Data from the prospectus shows that the company's net loss has grown from CNY 6.72 million (USD 1 million) in 2018 to CNY 85.12 million (12.65 million) in 2021.
For the reason of loss, XAG Tech explained that the company is in a fast growing industry so the market competition is intensifying. In addition, the company is currently investing heavily in research and development, and new products are still in the promotion stage, which means that the sales scale effect has not yet been reflected.
Besides, in the risk warning section of the prospectus, the company mentioned that it has the risk of R&D failure and the inability to industrialize the R&D results.
The company expects to achieve break-even in the next two years. However, it is still doubtful whether this can be achieved.