Analysis Report on the Sustainability of Qichacha's High Gross Margin Model

Based on collected data, I provide a comprehensive analysis of Qichacha’s high gross margin model.

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Qichacha’s prospectus shows that the company’s gross margin has continued to climb and remains at an extremely high level [0]:

Indicator	2022	2023	2024	First Half of 2025
Gross Margin	87.24%	88.51%	88.81%	90.74%
Operating Revenue	RMB 518 million	RMB 618 million	RMB 708 million	RMB 375 million
Net Profit	RMB 190 million	RMB 259 million	RMB 317 million	RMB 172 million
Net Profit Margin	36.68%	41.91%	44.77%	45.87%

This profitability is comparable to that of Kweichow Moutai (with a net profit margin of approximately 49%), earning it the industry title of “Software Moutai” [1].

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Qichacha’s high gross margin stems from the inherent characteristics of the software and internet industry [1]:

• High Marginal Cost Characteristics
  : After data acquisition, the marginal replication cost approaches zero
• Asset-Light Operation Model
  : No physical inventory required, main costs are R&D and servers
• Significant Scale Effect
  : The larger the user base, the lower the cost per user

Product Category	Revenue Proportion	Features
Membership Products	~85%	Standardized products, high gross margin
Qichacha Professional Edition	~6%	Customized for high-end users
Data Interface Services	~8%	B-end API calls

Membership products (VIP/SVIP) contribute over 85% of the company’s revenue. This product has mature scale effects, with the revenue growth rate of standardized products significantly outpacing the cost growth rate [2].

Qichacha’s costs mainly include data collection and processing, server operation and maintenance, and labor costs. The platform’s data comes from official public channels such as the National Enterprise Credit Information Publicity System, and data cleaning, desensitization, and modeling are completed through self-developed supercomputing platforms and deep learning algorithms [0]. Compared with physical products, its marginal cost is extremely low.

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In the commercial data service industry in 2023, Qichacha ranked second in the industry with a

[1], second only to Tianyancha (38.63%). The pattern of “Three Checks and One Treasure” (Tianyancha, Qichacha, Aiqicha, Qixinbao) has basically taken shape, with obvious first-mover advantages.

• Cumulative Registered Users
  : Over 150 million (as of June 2025)
• Monthly Active Users
  : Approximately 80 million
• Annual Paid Users
  : Over 1 million
• ARPPU (Average Revenue Per Paid User)
  : RMB 624

High stickiness of C-end users supports sustained revenue growth [2].

Qichacha has strategically raised prices for its core products, with the price of a 1-year VIP membership adjusted from RMB 360 to RMB 388. Compared with Tianyancha and Qixinbao, Qichacha has a higher price positioning but still maintains a high paid conversion rate [1].

Sales expense ratio has continued to decline and is lower than the industry average [1]:

Year	Qichacha’s Sales Expense Ratio	Average of Peer Companies in the Industry	Key Competitor (Hehe Information)
2022	25.37%	30.67%	27.19%
2023	20.42%	32.94%	28.24%
2024	15.88%	33.94%	29.84%

Approximately 60% of Qichacha’s sales expenses are used for online promotion, achieving refined operations while maintaining revenue growth.

Revenue from B-end business increased from RMB 106 million in 2022 to RMB 164 million in 2024, with its proportion rising from 20.49% to 23.89% [2]. Clients cover 5 major state-owned banks, 12 joint-stock banks, over 50 securities companies, and over 80 insurance companies, among others.

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• Slowdown in Monthly Active User Growth
  : It grew by 12.7%, 15.5%, and 15.5% respectively from 2022 to 2024, but declined in the first half of 2025
• Decline in Paid Conversion Rate
  : The conversion rate of new paid users continues to decline
• User Churn
  : 440,000 and 480,000 paid users stopped renewing their subscriptions in 2023 and 2024 respectively
• ARPPU Under Pressure
  : The price increase strategy is facing market tests

The core functions and service pricing in the industry are highly overlapping, and the dynamics of major competitors are as follows [1]:

Competitor	Strategy	Impact
Tianyancha	First echelon, strong technical capabilities, the first to obtain central bank credit reference filing	Leading market share
Aiqicha (Baidu)	Relying on Baidu’s ecosystem, implementing low-price competition	Directly squeezes pricing space
Qixinbao (Hehe Information)	Listed on the STAR Market, market value exceeds RMB 24 billion	Strong capital strength

Baidu’s Aiqicha’s low-price strategy continues to squeeze Qichacha’s pricing, and homogenized competition in the industry is eroding profit margins [0].

Qichacha faces multiple compliance challenges [0]:

• Credit Reference Business Compliance
  : Fined RMB 10,000 by the Jiangsu Branch of the People’s Bank of China in October 2025 for violating credit reference business management regulations
• Data Boundary Disputes
  : Regulatory authorities still have disputes over the definition of the boundary of “reprocessing of public data”
• Personal Information Protection
  : Some public information of enterprises includes sensitive information such as legal representatives’ ID numbers and contact information, and the balance between desensitization processing and technology tests compliance capabilities

Qichacha’s R&D expense ratio continues to be lower than the industry average. When C-end user growth faces bottlenecks, technological innovation capability is crucial for product differentiation [1]. The company plans to invest RMB 503 million raised in this IPO into AI R&D projects, indicating that it is making up for this shortcoming [0].

The prospectus shows that the average salary of Qichacha’s sales staff (RMB 238,100) is only about 50% of that of Kingsoft Office and Hehe Information; the average salary of management staff (RMB 511,000) is less than one-third of that of Compass [0]. The salary gap may affect talent attraction, and talents are the core competitiveness in the data service industry.

• As the government increases data openness, some basic query services may face pressure to become free
• The implementation of the “Interim Provisions on Accounting Treatment Related to Enterprise Data Resources” brings opportunities, but compliance costs may increase

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RMB 503 million raised in the IPO will be invested in artificial intelligence R&D, with plans to integrate AI into products to deeply explore the data value of the industrial chain [0]. The company has started integrating AI into its products since 2023, which will become the next growth engine.

The open platform has completed over 100 billion data calls in total, providing various services such as MCP, API, and SDK for the digital transformation of industries such as manufacturing [1]. The gross margin of B-end business is also relatively high, with greater growth potential.

RMB 368 million raised will be used for the upgrade of a multi-dimensional large database, strengthening the breadth and depth of data coverage, and extending data services to the upstream and downstream of the industrial chain.

RMB 458 million is planned to be invested in C-end product upgrades, and RMB 171 million is planned for B-end product upgrades, forming a richer product hierarchy to respond to homogenized competition [0].

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Compared with the listed Hehe Information (parent company of Qixinbao), its market value has exceeded RMB 24 billion since it was listed on the STAR Market in 2024 [0]. If Qichacha successfully goes public, its valuation will become a reference standard for data service enterprises.

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Dimension	Qichacha’s Advantages	Risk Factors
Profitability	Net profit margin of 45%+, healthy cash flow	Slowdown in C-end growth
Market Position	Second in the industry, 150 million users	Intensified competition
Growth Potential	B-end business, AI R&D	Homogenization, price war
Compliance	Multi-dimensional qualification certifications	Regulatory risks, penalty records

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• The existing user base and membership revenue can still support a high gross margin
• Scale effects continue to play a role
• Growth in B-end business offsets the slowdown in C-end

• Key Variables
  : AI technology conversion efficiency and the effectiveness of B-end business expansion
• Core Challenges
  : Construction of differentiation capabilities and prevention and control of compliance risks
• Potential Risks
  : Price wars continue to erode profit margins

If it can successfully transform from a

and deeply integrate AI technology into its business, the high-profit model will have strong sustainability. Otherwise, it may face dual pressures of growth bottlenecks and declining profit margins.

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[0] Xinhua News - “Qichacha Sprints for IPO, Value Opportunities and Compliance Challenges of Data Assets” (http://www.news.cn/digital/20251024/730b0625b5394b9aa4f790173eb45320/c.html)

[1] Sina Finance - “C-End Monthly Active Users Decline, B-End Story to Be Told: What Are the Odds of Qichacha’s IPO?” (https://finance.sina.com.cn/cj/2026-01-14/doc-inhhfrtc4191783.shtml)

[2] Sina Finance - “Qichacha’s IPO Accepted, Gross Margin Exceeds 90%, Involved in Multiple Lawsuits” (https://finance.sina.com.cn/wm/2025-10-12/doc-inftqsvv4266227.shtml)

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: The above analysis is based on data from public prospectuses and media reports. Qichacha is currently in the IPO review stage, and its financial data has been audited but it has not yet been listed. Investors should pay attention to subsequent regulatory inquiry responses and detailed information in the official prospectus.