F-1/A: Carbon Zero Technologies Files for IPO

Carbon Zero Technologies International Inc. has filed an amendment to its F-1 registration statement, outlining plans for an initial public offering of American Depositary Shares (ADSs) on the Nasdaq Global Market.

Summary

• Carbon Zero Technologies International Inc. (CZTI) is an F-1/A filing for an amendment to its registration statement for an initial public offering (IPO).
• The company plans to offer 3,335,000 ADSs, representing 13,340,000 Class A ordinary shares, with an expected IPO price between $11.00 and $13.00 per ADS.
• The filing also registers the resale of 1,500,000 ADSs by a selling shareholder.
• CZTI operates in the renewable resources recycling industry in China, utilizing an O2O (Online to Offline) model.
• The company's business includes waste metallic resource recycling, household waste recycling, and pre-owned electronic sales, with plans to expand into dismantling and disposal services.
• Revenues for the years ended December 31, 2024, and 2025, were RMB 4.5 billion and RMB 5.8 billion, respectively, showing a 28.9% year-over-year growth in 2025.
• The company has a nationwide recycling network with approximately 4,600 third-party recycling stations and over 38,000 registered recycling personnel as of December 31, 2025.
• CZTI is focused on technological innovation, including AI-driven platforms for optimizing operations and traceability.
• The company plans to expand its operations into the United States and Southeast Asian markets.
• Risks highlighted include those related to operating in China, regulatory uncertainties, competition, and the company's reliance on technology and data.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this filing as negative due to the company's continued net losses, negative operating cash flows, and material weaknesses in internal controls, despite revenue growth and expansion plans.

Positives

• Significant revenue growth of 28.9% in 2025 compared to 2024, reaching RMB 5.8 billion.
• Extensive nationwide recycling network with approximately 4,600 third-party recycling stations and over 38,000 registered recycling personnel as of December 31, 2025.
• Leading position in China's waste household appliance recycling platform, recycling approximately 46.1 million units since inception.
• Proprietary technology and O2O model aimed at digitizing and standardizing the recycling ecosystem.
• Expansion plans into the United States and Southeast Asian markets to capture high-value growth.
• Focus on innovation-driven growth strategies and strengthening business collaborations.
• Participation in carbon trading is planned to capitalize on data collected via their system.
• Received recognition as a National High Tech Enterprise and a Key Enterprise for Resources Recycling in China.

Negatives

• The company incurred net losses for the years ended December 31, 2024 (RMB 24.8 million) and 2025 (RMB 15.6 million).
• Negative net cash flows from operating activities for both 2024 (RMB 68.4 million) and 2025 (RMB 68.9 million).
• Substantial accumulated deficit of RMB 59.6 million as of December 31, 2025.
• The company has limited insurance coverage, excluding business interruption, product transportation, and key-man insurance.
• Identified material weaknesses in internal control over financial reporting related to insufficient competent financial reporting personnel and lack of formal internal control policies.
• The company's planned expansion into the US and Southeast Asian markets faces significant risks, uncertainties, and obstacles.
• The dual-class voting structure will limit shareholder influence and may discourage change-of-control transactions.
• The company currently does not expect to pay dividends in the foreseeable future.

Risks

• Risks related to doing business in the PRC, including government oversight, evolving laws and regulations, and potential for material adverse changes in operations or value of ADSs.
• Uncertainties regarding the interpretation and enforcement of PRC laws, rules, and regulations, which could adversely affect the business and prospects.
• Potential for delisting or trading prohibition in the United States under the Holding Foreign Companies Accountable Act (HFCAA) if the PCAOB is unable to inspect the auditor's work.
• The company's reliance on AI systems may not achieve expected operational benefits and could adversely affect its business, results of operations, and reputation.
• AI systems depend on the quality, availability, and lawful use of operational and third-party data; deficiencies in data or data governance could impair systems and expose the company to legal, regulatory, and reputational risks.
• Reliance on proprietary and third-party AI technologies may require substantial investment, specialized personnel, and may not provide a sustainable competitive advantage.
• The company's planned expansion into the United States and Southeast Asian markets faces significant risks, including regulatory and licensing requirements, capital requirements, operational challenges, and competition.
• The company may be held liable for information or content displayed on or linked to its system, which could harm its reputation, business, and results of operations.
• Misconduct or illegal actions by third-party merchants or business partners could adversely affect the company's reputation, business, financial condition, and results of operations.
• The company's operations are subject to the performance and reliability of China's internet infrastructure; disruptions or limitations in internet access could adversely affect its ability to serve customers and generate revenue.
• The company may not be able to prevent others from unauthorized use of its intellectual property, which could harm its business and competitive position.
• The company may be subject to intellectual property infringement claims, which may be expensive to defend and disrupt its business and operations.
• Failure to develop and maintain an effective system of internal control over financial reporting could impair the company's ability to produce accurate financial statements or comply with applicable regulations.
• The company may be subject to legal proceedings or administrative penalties during the course of its business operations.
• Changes in U.S. and international trade policies, particularly with regard to China, may adversely impact the company's business and operating results.
• The company's operations have been and may continue to be affected by the COVID-19 pandemic.
• The company is vulnerable to natural disasters, health epidemics, and other outbreaks, which could disrupt its operations.
• The company's business operations depend on the performance and reliability of China's internet infrastructure, and any disruptions or limitations in internet access could have adverse effects on its ability to serve customers and generate revenue.
• The company may not be able to prevent others from unauthorized use of its intellectual property, which could harm its business and competitive position.
• The company may be subject to intellectual property infringement claims, which may be expensive to defend and disrupt its business and operations.
• The company's dual-class voting structure will limit shareholders' ability to influence corporate matters and could discourage others from pursuing any change of control transactions that holders of Class A ordinary shares and ADSs may view as beneficial.
• Substantial future sales or perceived potential sales of ADSs in the public market could cause the price of the ADSs to decline.
• The company may have broad discretion in the use of the net proceeds from its initial public offering and may not use them effectively.
• Shareholders may face difficulties in protecting their interests, and their ability to protect their rights through U.S. courts may be limited because the company is incorporated under Cayman Islands law.
• Certain judgments obtained against the company by its shareholders may not be enforceable.
• The company may be classified as a passive foreign investment company (PFIC) for United States federal income tax purposes, which could subject United States holders of ADSs to significant adverse United States federal income tax consequences.

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 expand into the United States and Southeast Asian markets. They aim for rapid business growth by enhancing integrated system capabilities and expanding recycling categories and business chain verticals.

Management Comments

• We intend to transform the entire renewable resources recycling business in China, United States, and Southeast Asian countries as we develop and deploy our Online to Offline system (O2O system) through online applications and offline sites in the traditional recycling business.
• Our goal is to establish comprehensive, digitized, artificial intelligence-powered and standardized waste recycling services and convert the recycled materials into renewable resources, covering all categories of recyclable materials.
• We believe that Carbon Zero Technologies is uniquely positioned to capture this fragmented, rapidly growing market, turning global waste into a sustainable, highly profitable engine for a zero-carbon future.
• We believe that a robust and sustainable business is a good business, but a business that does good for society beyond generating shareholder return is a great business.
• We believe that the value of a business lies in solving social problems and creating social values.

Industry Context

StockSavvy.ai notes that Carbon Zero Technologies operates in China's rapidly growing renewable resources recycling industry, which is projected to reach 590.3 million tons by 2027, with a CAGR of 7.1% from 2022 to 2027. The industry is driven by supportive government policies, increasing environmental awareness, and the emergence of online platforms. The company's O2O model and technological integration position it to capitalize on these trends, though the industry is highly fragmented with over 90,000 companies operating in 2022.

Comparison to Industry Standards

• According to the CIC report, Carbon Zero Technologies was the largest waste household appliance recycling platform in China in 2025, recycling approximately 46.1 million units since inception.
• The company's recycling volume of ferrous metals was approximately 1.9 million tons in 2025, with revenue of RMB 4.14 billion, while the average selling price decreased by 19.5% compared to 2024.
• The company's recycling volume of household waste was approximately 14.2 million units in 2025, with revenue of RMB 1.62 billion, while the average selling price slightly decreased by 0.1% compared to 2024.
• The company's system service revenue increased by 197.9% from RMB 6.5 million in 2024 to RMB 19.4 million in 2025, indicating strong adoption of its platform.

Corporate Governance

Related Party Transactions

• The company engaged in significant transactions with related parties, including sales of products, provision of services, advances to suppliers, accounts payable, and loans from related parties.
• Notable related parties include entities controlled by or associated with Mr. Baitong Tang (CEO), and other shareholders or entities with minority ownership stakes.
• The company purchased a substantial amount of household waste from related parties in 2024 (RMB 518.2 million) and 2025 (RMB 2.12 billion).

Stakeholder Impact

• Shareholders: Potential dilution from the IPO, reliance on price appreciation for returns as no dividends are expected in the near future, and limited influence due to dual-class share structure and controlling shareholder.
• Investors: High degree of risk associated with investing in the ADSs, including the possibility of losing the entire investment, and risks related to PRC regulations and potential delisting.
• Employees: Plans to increase compensation and benefit packages, and invest in vocational training.
• Creditors/Lenders: The company has secured commitments for additional credit lines and is in negotiations to renew existing loans, indicating ongoing reliance on debt financing.
• Business Partners/Suppliers: The company relies on a network of recycling stations, personnel, and downstream customers, with some concentration in suppliers and customers noted in the filing.

Next Steps

• Obtain Nasdaq approval for the listing of ADSs.
• Complete the initial public offering.
• Expand recycling operations into new categories.
• Expand downstream operations, including dismantling and disposal.
• Pursue mergers and acquisitions involving downstream companies.
• Enhance research and development systems.
• Increase employee compensation and benefit packages, and recruit high-level talent.
• Invest in vocational training.
• Expand operations into the United States and Southeast Asian markets.
• Participate in carbon trading.

Key Dates

Recommendation

While the company shows revenue growth and expansion plans, the persistent net losses, negative operating cash flows, material weaknesses in internal controls, and significant risks associated with operating in China and potential delisting warrant a cautious approach. The IPO proceeds are intended to address some of these issues, but the path to profitability remains uncertain. Therefore, a 'hold' recommendation is appropriate, pending further operational improvements and clearer signs of sustainable profitability.

Keywords

Carbon Zero Technologies, F-1/A, IPO, American Depositary Shares, Nasdaq, Renewable Resources Recycling, China, O2O Model, Waste Management, Environmental Services, Securities Offering, SEC Filing