NewTimeSpace | ZG Group-W (06676.HK) Market Value Shrinks Over 80% Post-Listing Amid Continued Losses

While 2025 marked a breakout year for AI applications, one particular company has seen its stock price plummet by more than 80% since debuting on the Hong Kong Stock Exchange (HKEX) last year.

On March 10, 2025, the HKEX welcomed a "unique" listed entity: **ZG Group (06676.HK)**, the first company to go public via a **De-SPAC** transaction. On its first day of trading, the stock opened high but trended downward. Although it managed to close at its offer price that day, the share price has since entered a persistent decline with little sign of recovery.

 Post-Listing Slump: A Drop of Over 80% Within One Year

According to **NewTimeSpace**, ZG Group’s listing via the De-SPAC model made it the first domestic company to enter the HKEX through this specific vehicle.

The company’s journey to the public market began as early as 2018, but it faced numerous delays. It restarted its listing efforts five years later in August 2023. Even the De-SPAC route was not without hurdles, as its prospectus lapsed twice—in August 2023 and March 2024.

Following these setbacks, ZG Group successfully listed by utilizing the SPAC model as a diversified fundraising solution. The company eventually raised **HK$550 million**, consisting of three components: the original cash reserves of the SPAC shell, **HK$532.6 million** in PIPE (Private Investment in Public Equity) investments, and post-listing placement funds. This structure offered more flexibility compared to a traditional IPO.

Despite the successful debut in March 2025, the subsequent market performance has been startling. On its first day, the stock showed high volatility, surging over 13% at the open and peaking near a 20% gain before rapidly retreating. By the afternoon, the decline intensified, briefly dipping below the **HK$10.00** offer price before closing at **HK$10.02** (a marginal gain of 0.2%).

Since then, ZG Group has been locked in an unstoppable downward trend. As of the close on **January 29, 2026**, the stock stood at **HK$1.55**, down 2.52% for the day. Since its listing, the share price has cumulatively fallen by **84.50%**, representing a collapse of over 80% from its initial valuation.

 Pre-IPO Capital Favorite Faces "Revenue Growth Without Profit"

The cold reception from the secondary market stands in stark contrast to the enthusiasm ZG Group enjoyed from venture capital prior to its listing.

**NewTimeSpace** notes that since its founding in 2012, ZG Group attracted high-profile investors. In 2013, it secured a **US$6.43 million** Series A led by Matrix Partners China at a post-money valuation of US34.80 million** round with participants including **Sequoia China**, Bull Capital Partners, and Matrix Partners China.

By the time of its listing, ZG Group had completed six rounds of financing, raising approximately **RMB 2.5 billion**. After its Series F round, the company’s valuation reached **RMB 7.93 billion**, earning it "unicorn" status. For the De-SPAC transaction, ZG Group was valued at **HK$10.004 billion** (approximately RMB 9.372 billion). However, less than a year later, its market capitalization has evaporated to **less than HK$2 billion**.

The company’s **1H 2025 interim report** highlighted a growing disparity between scale and profitability. Total revenue reached **RMB 797 million**, a **12.2%** year-on-year increase. However, the loss attributable to owners widened significantly to **RMB 499 million**, a **573.1% increase** in losses compared to the same period last year.

ZG Group attributed these losses to several factors, including its transition from an asset-heavy to an asset-light model, business restructuring, strategic investments, legacy issues, and one-time listing expenses.

The Long Road to AI: Continued Deficits Post-Transformation

As a leader in China’s industrial internet sector, ZG Group primarily integrates the steel and MRO (Maintenance, Repair, and Operations) supply chains through its digital platform. **NewTimeSpace** understands that the company is currently pushing a strategy of "Global, Multi-Category, and Full AI Integration"—ambitious goals that require heavy upfront investment.

At the beginning of 2026, ZG Group announced the completion of an **industrial-grade AI dataset system** designed for Large Language Model (LLM) applications.

The company's transition began in 2019 when it started reducing its domestic self-operated (inventory-holding) business to move toward a light-asset model. Under the old model, the company profited from price spreads in steel trading; under the light-asset model, it functions as an e-commerce platform. By March 2023, the company had fully ceased its domestic self-operated steel operations. Its current business segments include transaction services, transaction support, tech subscriptions, and international trading.

However, since this pivot, financial performance has remained under pressure. Data from the prospectus and subsequent reports show that from 2021 to the first three quarters of 2024, cumulative losses exceeded **RMB 1.1 billion**.

A notable point of concern is the **International Trading** segment. While it was the largest revenue contributor in the first nine months of 2024 (RMB 420 million), its gross margin was a thin **6.5%**, and it has historically dipped into negative territory. In contrast, the transaction and tech subscription services maintain high gross margins of over 80%, though they represent a smaller portion of total revenue.

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