The company started out as a digital solutions provider for China's agricultural supply chain but has morphed into a produce trader in its own right

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Key Takeaways:

The IPO hopeful gets 99% of its revenue from the sale of agricultural products, which is a low-margin business

Backed by big state-owned food and agricultural conglomerates, the company is firmly anchored in China's cold-chain logistics network

What's in a name? In the case of Shenzhen Yueshi Digital Intelligence Co. Ltd., the answer could be a set of contradictions.

In its recent pitch for a Hong Kong IPO, the company described itself as a seller of perishable products in China's refrigerated supply chain, driven by digital intelligence. But in fact, digital solutions make up just a tiny fraction of its income.

The business of getting temperature-controlled foodstuffs from the farm or factory to consumers is highly fragmented and labor-intensive in China, operating on thin margins and resistant to efforts to achieve meaningful scale.

Although cold-chain infrastructure has expanded rapidly, circulating the agricultural products efficiently through the system has been hampered by opaque information, crude forecasting and inventory mismatches.

Digitization has offered a way to streamline the process, as highlighted in Yueshi Digital's application to list shares on the Hong Kong Stock Exchange.

The company was founded in 2019 as a provider of digital tools for the agricultural supply chain. Using a self-developed cloud platform deployed across storage facilities, wholesale markets and food processing plants, it set out to standardize warehouse management, logistics and transaction records. The platform now covers around 30 provinces, autonomous regions and municipalities across China, serving more than 750 cold-chain operators.

As coverage expanded, Yueshi Digital gained insights into procurement patterns, product preferences and pricing dynamics for small and medium-sized wholesalers. From 2023 the company expanded its business by getting directly involved in the sale of cold-chain products and feeding the data back into the trading process. From there, sales of agricultural products quickly ...