F-1/A: Carbon Zero Technologies Files Amended IPO Registration

Carbon Zero Technologies International Inc. has filed an amendment to its Form F-1 registration statement, detailing its proposed initial public offering of American Depositary Shares (ADSs).

Summary

• Carbon Zero Technologies International Inc. has filed Amendment No. 15 to its Form F-1 Registration Statement with the SEC, indicating its intention for an initial public offering (IPO) of American Depositary Shares (ADSs).
• The company plans to offer 3,335,000 ADSs, representing 13,340,000 ordinary shares, with an estimated IPO price between $12.00 and $14.00 per ADS.
• The filing also registers the resale of 1,500,000 ADSs representing 6,000,000 ordinary shares by a selling shareholder.
• The company operates in the renewable resources recycling sector, primarily in China, utilizing an O2O (Online to Offline) model.
• Revenues for the year ended December 31, 2025, were RMB 5.8 billion, an increase of 28.9% from RMB 4.5 billion in 2024.
• The company has experienced net losses in both 2024 (RMB 24.8 million) and 2025 (RMB 15.6 million), with negative net cash flows from operating activities.
• The company intends to use the net proceeds from the offering for expanding recycling operations, downstream operations, research and development, and general working capital.
• Significant risks are highlighted, including those related to operating in China, regulatory uncertainties, competition, and the company's financial performance.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this filing as negative due to the company's continued net losses, negative operating cash flows, and high cost of goods sold, despite revenue growth and an upcoming IPO.

Positives

• Total revenues increased by 28.9% year-over-year, reaching RMB 5.8 billion in 2025.
• The company is a leading player in China's waste household appliance recycling sector, ranking first according to a CIC report.
• The company has an extensive nationwide recycling network with approximately 4,600 third-party recycling stations and over 38,000 registered recycling personnel as of December 31, 2025.
• The company is leveraging technology, including AI, to enhance its recycling operations and traceability systems.
• The company has a clear growth strategy including expanding into new recycling categories and international markets (US and Southeast Asia).

Negatives

• The company incurred net losses in both 2024 (RMB 24.8 million) and 2025 (RMB 15.6 million).
• The company experienced negative net cash flows from operating activities in both 2024 (RMB 68.4 million) and 2025 (RMB 68.9 million).
• The company has an accumulated deficit of RMB 59.6 million as of December 31, 2025.
• The company's merchandise costs as a percentage of total product revenue increased to 98.9% in 2025.
• The company has limited insurance coverage.
• The company faces significant risks related to PRC regulations, including potential government oversight and changes in policies.

Risks

• The company faces challenges due to the rapidly evolving renewable resources recycling industry in China, including limited systems, absence of standards, and regulatory uncertainties.
• The company's planned expansion into the United States and Southeast Asian markets faces significant risks, uncertainties, and obstacles, including regulatory and licensing requirements, capital requirements, operational challenges, and competition.
• The company's AI systems may not achieve expected operational benefits and could adversely affect its business, results of operations, and reputation.
• The company's AI systems depend on the quality, availability, and lawful use of operational and third-party data, and deficiencies in such data or data governance practices could impair its technology systems and expose it to legal, regulatory, and reputational risks.
• Trading of the ADSs could be prohibited in the United States under the Holding Foreign Companies Accountable Act (HFCAA) if the PCAOB is unable to inspect its auditor's reports for two consecutive years.
• There is a risk of material adverse effects on the company's business, financial condition, and results of operations due to changes in PRC economic, political, and social conditions.
• The company may be subject to liabilities under the Foreign Corrupt Practices Act and Chinese anti-corruption laws.
• The company's reliance on its management team and the potential loss of key personnel could severely disrupt its business.

Future Outlook

The company plans to expand its recycling operations into new categories, enhance its downstream operations through mergers and acquisitions, invest in research and development, and improve employee compensation and benefits. It also aims to expand into the United States and Southeast Asian markets.

Management Comments

• The company aims to transform the entire renewable resources recycling business through its O2O system, establishing comprehensive, digitized, AI-powered, and standardized waste recycling services.
• The company believes it is uniquely positioned to capture the fragmented, rapidly growing market by turning global waste into a sustainable, profitable engine for a zero-carbon future.
• The company's corporate culture balances stability and innovation, focusing on rapid business growth and expanding recycling categories and integrating business chain verticals.

Industry Context

StockSavvy.ai notes that Carbon Zero Technologies International Inc. is operating in a rapidly growing and evolving renewable resources recycling market in China, driven by government policies supporting circular economy and environmental protection, as well as increasing consumer awareness of sustainability. The company's O2O model and technology integration position it as an innovator in a fragmented industry.

Comparison to Industry Standards

• The company claims to be the largest waste household appliance recycling platform in China in 2025, recycling approximately 46.1 million units since inception.
• The company's revenue growth of 28.9% in 2025 outpaced the projected CAGR of 7.1% for the Chinese renewable resources recycling industry between 2022 and 2027.
• The company's extensive nationwide recycling network (4,600+ stations, 38,000+ personnel) appears to be a significant competitive advantage compared to the highly fragmented nature of the Chinese recycling industry, which has over 90,000 companies.
• The company's focus on technology-driven innovation, including AI for sorting and logistics, aligns with industry trends towards digitization and efficiency improvements.

Corporate Governance

Related Party Transactions

• The company has engaged in significant transactions with related parties, including sales of products, provision of services, advances to suppliers, accounts payable, and loans.
• Notable related party transactions include sales of household waste to Hubei Jinke and purchases of household waste from various entities controlled by or affiliated with management.
• The company has outstanding loans from and to related parties, including significant long-term loans payable to BJ ABGreen RSC and its shareholders.

Stakeholder Impact

• Shareholders face risks of dilution due to the IPO and potential volatility in ADS prices.
• Investors in ADSs are purchasing equity in the Cayman Islands holding company, not directly in the operating entities in China, which carries unique risks.
• The company's reliance on PRC subsidiaries for cash flow and dividend distributions is subject to PRC foreign exchange controls and regulations.
• Employees are subject to PRC labor laws and social security contributions.
• Customers and suppliers are impacted by the company's O2O model and its network of recycling stations and downstream partners.

Next Steps

• The company intends to apply for listing of its ADSs on the Nasdaq or NYSE under the symbol CZTI.
• The offering is contingent on the successful listing of the ADSs on Nasdaq or NYSE.
• The company plans to use the net proceeds for expanding recycling operations, downstream operations, R&D, and general working capital.
• The company will continue to pursue its growth strategies, including expanding recycling categories and integrating business chain verticals.

Key Dates

Recommendation

While the company shows revenue growth and a strategic plan for expansion, the persistent net losses, negative operating cash flow, high cost of goods sold, and significant risks associated with its China operations and IPO process warrant a cautious 'hold' rating. The company needs to demonstrate a clear path to profitability and successful execution of its international expansion plans before a more positive recommendation can be considered.

Keywords

IPO, American Depositary Shares, Form F-1, SEC Filing, Renewable Resources Recycling, China, O2O Model, Technology