Chinese smart systems company Julong Holding Ltd is gearing up to go public on the NASDAQ, and investors should be preparing.
The company is offering 2.392 million shares in what could be a very high-stakes IPO, especially given today’s rocky U.S.-China tech relations.
If you’re not already on high alert, you should be, because this one’s loaded with red flags hiding behind pretty growth numbers.
On the Surface…
…Julong looks like a growth story.
Its revenue in FY 2024 was $24.74 million, which was up 48.4% from the year before.
Its net income was $2.4 million, after a 52.8% leap. And its cash flow was a turnaround tale, going from negative $1.9 M to positive $ 9.8 M.
Sounds great, right? Hold that optimism.
Behind that nice math is a twisted corporate structure, heavy reliance on the Chinese government, and a side of regulatory turbulence that could give any investor heartburn.
The Real Bombshell
86.5% of Julong’s Revenue Comes from Government Contracts
Yes, you read that right. Julong’s client list is basically the Chinese government dressed in different uniforms, universities, transport hubs, banks, and hospitals.
That’s not just a risk. That’s a ticking time bomb. If Beijing sneezes or rewrites a contract clause, Julong could catch pneumonia, and you, dear investor, could be left holding the tissue.
Oh, and the China Securities Regulatory Commission wants more clarity on their shareholding structure. This means that even China thinks things look… fuzzy.
About That $5 IPO Price Tag…
Let’s not sugarcoat it. The $5 a share might be wildly overpriced.
Here’s why. The net tangible book value post-IPO is estimated at $0.49. That’s a 90 %+ drop in value for new investors the moment the shares hit the market.
Still feel good about that five-dollar bet?
Geopolitics Just Entered the Chat
Julong isn’t just facing business risks. It’s flying headfirst into a U.S.-China tech cold war.
The U.S. government is clamping down hard on Chinese tech, slapping restrictions on chip exports and scrutinizing any company that even sniffs around cloud infrastructure or AI.
Julong plays right in that arena, with cloud-based building systems, security networks, and data integration platforms.
If regulators decide to tighten the screws further (which is likely), Julong could get caught in the crossfire, fast.
Panic, Maybe Just a Bit
Julong’s IPO is not your average growth stock. It’s a regulatory Rubik’s cube dressed up as a promising tech firm.
Yes, the numbers show growth, and yes, the tech is real.
But the government contract dependency, corporate structure gymnastics, overvaluation concerns, and geopolitical minefield make this IPO feel less like an investment and more like a roulette spin in a thunderstorm.
Hold off. Watch closely. And whatever you do, don’t buy the hype blind.
