China's largest flexible employment platform is going to IPO.

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According to Hong Kong Stock Exchange disclosures on June 25, Hangzhou Linka Technology Co., Ltd. (hereinafter referred to as “Linka Technology”) has submitted a listing application to the main board of the Hong Kong Stock Exchange. CICC and CMB International serve as joint sponsors.

The prospectus shows that Linka Technology owns two major platforms: “Linggong Punch-in” and “Qingtuan Club.” As of December 31, 2025, Qingtuan Club had accumulated nearly 2 million registered corporate clients and approximately 57 million registered users.  

A look into its three-year financial data shows that Linka Technology has exhibited a diverging trend of expanding revenue scale and continuously narrowing gross profit margin.

From 2023 to 2025, Linka Technology’s total revenues were 463 million yuan, 1.201 billion yuan, and 2.435 billion yuan, respectively. While the revenue base expanded, its comprehensive gross profit margin declined from 18.8% in 2023 to 10.2% in 2024, further dropping to 7.0% in 2025.

The compression of profit margin was directly caused by a switch in its core business model. Linka Technology’s income structure mainly consists of “one-stop flexible employment solutions” and “online recruitment matching services.” During the period, revenue from the high gross margin online recruitment matching services (which enjoyed gross margins of 80.5% to 87.0%) plunged from 21.3% of total revenue in 2023 to 5.3% in 2025.  

Correspondingly, the revenue share of “one-stop flexible employment solutions” increased from 75.7% to 94.5%. In this business, Linka Technology acts as the principal and recognizes revenue on a gross basis, with remuneration and benefits paid to flexible workers recorded directly as cost of sales.

This accounting method increases the revenue scale, but due to rigid human resource costs, this business had a gross profit margin of only 2.4% in 2025. The shrinkage of high-margin business and the expansion of low-margin business structurally diluted the overall profit space.  

On the profit side, Linka Technology posted net losses of 110 million yuan, 20.88 million yuan, and 269 million yuan for 2023 to 2025, respectively. The widening loss in 2025 was mainly due to non-operating items: during the year, fair value losses of financial liabilities measured at fair value through profit or loss amounted to 165 million yuan, mainly due to changes in the company’s valuation, which led to an increase in the fair value of equity shares.

Excluding changes in book fair value, the company’s own business cash flow turnover ability still faces challenges. From 2023 to 2025, net cash flow used in operating activities remained negative, at -37.92 million yuan, -66.92 million yuan, and -79.44 million yuan, respectively.  

The continued depletion of cash flow is closely related to the increase in accounts receivable. The prospectus indicates that from 2023 to 2025, trade receivables were 55.1 million yuan, 153 million yuan, and 330 million yuan, respectively. During the same period, turnover days for trade receivables were extended from 30.4 days to 36.3 days. Increased working capital needs directly led to interest-bearing bank and other borrowings surging to 238 million yuan in 2025.  

In terms of revenue sources, Linka Technology relies heavily on top clients and specific service industries.

In 2025, for its one-stop flexible employment solutions, the restaurant industry contributed 44.4% and the retail industry 33.7% of revenue. Meanwhile, the top five clients accounted for as much as 59.5%, 74.1%, and 67.5% of total revenue in 2023, 2024, and 2025, respectively. The largest single client contributed 41.0% and 30.0% of revenue in 2024 and 2025, respectively. The high concentration of downstream clients means that changes in the employment needs or cost control strategies of key clients will directly impact the company’s fundamentals.  

On the compliance front, Linka Technology faces potential financial pressures regarding social insurance contributions.

The prospectus discloses that during the reporting period, the company did not pay full social insurance for some employees as required. The shortfall in social insurance payments was 9.8 million yuan, 11.3 million yuan, and 13.4 million yuan for 2023, 2024, and 2025, respectively.

Although the company has not yet received any notice of supplementary payments or administrative penalties from the relevant authorities, the risk of having to pay the shortfall and overdue fines objectively exists amid normalized compliance supervision. This will further challenge its already thin profit margins.

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