On February 16, Lianzhang Technology received its IPO registration approval from the U.S. Securities and Exchange Commission (SEC). The company successfully went public on February 27, with its stock price surging by up to 81% on the first trading day. Over the next five days, the stock soared by 83%, driving its market capitalization from the initial $607 million to $1.113 billion. As one of China's leading advertising service providers, what has fueled the strong investor demand for Lianzhang Technology?
Lianzhang Technology is an information technology and advertising company. It uses advanced Internet and communication technologies to display advertising by installing smart access control screens. Its business covers three major sectors: outdoor advertising, local lifestyle services, and smart communities. The company’s successful listing and strong investor interest can be attributed to two key factors: first, its position as a rare asset within the smart access control sector in the U.S. stock market; and second, investors' confidence in the company's long-term investment value.
Performance is key to measure a company's value. From 2022 to 2023, Lianzhang Technology's revenue surged from RMB 163 million to RMB 569 million, up by 249.1%. In the first half of 2024, revenue continued to grow by 136.3% to RMB 449 million, with expectation for high growth throughout the year. This solidifies its status as a high-growth company.
High-growth performance: Building a moat with hardware and creating value with data
Public information reveals that Lianzhang Technology has built its competitive moat through the deployment of smart access control screens, and leveraged community traffic as its key resource. The company operates under a “hardware + software + traffic” model to generate data, which is then capitalized through outdoor advertising and local lifestyle services. While its core product is smart access control systems, Lianzhang Technology primarily sells full-system solutions rather than individual hardware. It charges only a small annual service fee, while the bulk of its revenue comes from advertisers. By utilizing multi-screen interconnectivity technology, the company enhances brand marketing and increases ad exposure for advertisers.
Lianzhang Technology offers smart access control screens in various sizes—7-inch, 8-inch, 10-inch, 18.5-inch, and 22-inch—serving smart communities and local lifestyle venues such as hotels, restaurants, retail stores, and cinemas.
As of June 2024, the company had deployed 72,773 smart access control screens, which was more than 1.5 times the number in 2021, marking rapid growth. These screens are installed across approximately 120 cities in China, covering nearly all first- and second-tier cities, 4,000+ residential communities, and reaching 2.7 million households. On the client side, as of June 2024, Lianzhang Technology had 168 customers, including well-known names such as Baidu.
From a business perspective, Lianzhang Technology generates revenue primarily from outdoor advertising and local lifestyle services. In the first half of 2024, these segments recorded revenues of RMB 302 million and RMB 145 million, reflecting year-over-year growth of 96.74% and 400%, and accounting for 67.4% and 32.4% of total revenue respectively.
Over the past few years, both outdoor advertising and local lifestyle services have maintained high growth. This attributes mainly to Lianzhang Technology’s establishment of an irreplaceable traffic "entry point," which has enabled the company to transform from a hardware and software provider into an IoT data company. The wider its screen deployment, the stronger its competitive moat, increasing the value derived from data, and ultimately leading to greater economies of scale, higher profitability, and improved shareholder returns.
From an industry perspective, according to the Frost & Sullivan report, China's community building access control grew at a compound annual growth rate of 14.5% from 2017 to 2022, and is projected to reach RMB 58.9 billion by 2027, with an annual growth rate of 12.5%. As previously mentioned, Lianzhang Technology’s business model does not focus on selling hardware. Instead, it builds a moat by deploying hardware and profiting from data. This has allowed its growth rate to far exceed industry average.
Unicorn acceleration platform, sharing development achievements
Lianzhang Technology is one of the equity investment projects under TOJOY’s collaboration. TOJOY empowers and accelerates projects across various new economy sectors, including artificial intelligence, big data, IoT, Internet+, blockchain, new retail, and new e-commerce.
By sharing resources, TOJOY also shares in the success of its partner companies. According to the IPO prospectus, TOJOY holds over 6.2 million shares of Lianzhang Technology. Based on the company’s current market valuation, TOJOY’s stake is valued at over RMB 500 million.
Founded in 1991, TOJOY is committed to its mission of “Empowering Businesses, Sharing Happiness.” As a big data-driven resource sharing platform, TOJOY plays a vital role in accelerating its partner companies’ capitalization process by providing comprehensive value-added support. With millions of entrepreneurs in its database, TOJOY lays the foundation for the commercial scalability of its partner companies. To further enhance synergies in business development, TOJOY has opened a second growth curve, leveraging its unique advantages in capital facilitation and market resources to help partner companies achieve transformative growth.
Additionally, TOJOY has developed its proprietary TOJOY Business Opportunity Big Model. TOJOY Enterprise Services has over 5.5 million registered users. Every year, the platform hosts tens of thousands of online business events for entrepreneurs, along with thousands of offline unicorn business opportunity sharing conferences. TOJOY has successfully accelerated 100+ companies, including 11 potential unicorns, 64 high-tech enterprises, 8 gazelle companies, and 8 "little giant" enterprises specializing in advanced and niche industries. For its achievements, TOJOY has been recognized as one of the Top 10 Innovative Enterprises in the Chinese Economy.
In 2025, TOJOY plans to support multiple portfolio companies in going public on major global stock exchanges. With its seasoned capital empowerment team, TOJOY provides partner companies with industry consolidation, mergers & acquisitions, and strategic consulting, ensuring long-term value creation and sustainable growth.
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