SCHEDULE 13G/A: Viomi Technology Co., Ltd. Founder Xiaoping Chen Retains Significant Control with 61% Voting Power

An amended Schedule 13G filing reveals that Viomi Technology Co., Ltd.'s founder, Xiaoping Chen, along with entities he controls, beneficially owns 35.2% of the company's ordinary shares, representing 61.0% of the total outstanding voting power as of December 31, 2024.

Summary

• The filing is an Amendment No. 6 to Schedule 13G, reporting beneficial ownership of Viomi Technology Co., Ltd.'s Class A ordinary shares.
• The reporting persons are Xiaoping Chen, Viomi Limited, and VioCloud Limited.
• As of December 31, 2024, Xiaoping Chen beneficially owned 71,997,521 ordinary shares, representing 35.2% of the class and 61.0% of the total outstanding voting power.
• Xiaoping Chen holds sole voting power over 71,033,975 shares and shared voting power over 963,546 shares, primarily due to an irrevocable voting proxy from certain employees.
• Viomi Limited, wholly owned by a trust for Xiaoping Chen and his family, beneficially owned 69,836,364 ordinary shares, representing 34.1% of the class and 60.1% of the total outstanding voting power.
• VioCloud Limited, controlled by Xiaoping Chen, beneficially owned 397,611 Class A ordinary shares, representing 0.2% of the class and 0.0% of the total outstanding voting power.
• The beneficial ownership calculation is based on 204,623,122 total ordinary shares outstanding as of December 31, 2024, comprising 101,858,572 Class A shares and 102,764,550 Class B shares.
• Class A ordinary shares carry one vote per share, while Class B ordinary shares carry ten votes per share.
• Class B ordinary shares are convertible into Class A ordinary shares on a one-for-one basis, but Class A shares are not convertible into Class B shares.

Sentiment

Score: 5

Explanation: The document is a factual report on beneficial ownership, which is neutral in sentiment. It provides clarity on control but does not inherently convey positive or negative business performance.

Positives

• The significant beneficial ownership and concentrated voting power held by founder Xiaoping Chen indicates strong insider commitment and stable control over the company's strategic direction.
• The dual-class share structure, with Class B shares carrying ten votes, allows the founder to maintain substantial control, which can provide stability and long-term vision.

Negatives

• The highly concentrated voting power with Xiaoping Chen (61.0%) means that minority shareholders have limited influence on corporate decisions, potentially impacting corporate governance and shareholder democracy.

Risks

• Concentrated ownership and voting power with Xiaoping Chen could lead to decisions that primarily benefit the controlling shareholder rather than all shareholders.
• The dual-class share structure may deter certain institutional investors who prefer a one-share, one-vote governance model.

Future Outlook

This Schedule 13G filing is a disclosure of beneficial ownership and does not contain forward-looking statements or guidance regarding the company's future financial performance or strategic outlook.

Industry Context

This filing is specific to the ownership structure of Viomi Technology Co., Ltd. and does not provide broader insights into industry trends or competitive landscape. However, dual-class share structures are common among technology companies, particularly those with founder-led management, to ensure long-term strategic control.

Comparison to Industry Standards

• The dual-class share structure employed by Viomi Technology Co., Ltd., where Class B shares have ten times the voting power of Class A shares, is a common mechanism used by founder-led technology companies, similar to structures seen in companies like Google (Alphabet Inc.), Facebook (Meta Platforms, Inc.), and Snap Inc. This structure allows founders to retain significant control and pursue long-term visions without immediate pressure from public markets.
• Xiaoping Chen's beneficial ownership of 35.2% of shares, translating to 61.0% of voting power, indicates a high degree of control, which is comparable to other companies where founders or founding families maintain majority voting rights, such as Ford Motor Company or The New York Times Company, albeit through different share class mechanisms.

Corporate Governance

Related Party Transactions

• Viomi Limited is wholly owned by a trust established for the benefit of Xiaoping Chen and his family.
• VioCloud Limited is wholly owned by Foshan Yunmi Electric Appliances Technology Co., Ltd., in which Xiaoping Chen directly holds 99.78% equity interests and controls another 0.22% through a limited partnership.
• Certain employees granted an irrevocable voting proxy for their ordinary shares to Mr. Xiaoping Chen, giving him shared voting power over these shares.

Stakeholder Impact

• Shareholders: The concentrated voting power with Xiaoping Chen means that minority shareholders have limited ability to influence corporate decisions, potentially impacting their governance rights.
• Management: The stable control by the founder may provide a clear strategic direction and reduce pressure from short-term market fluctuations, allowing management to focus on long-term goals.
• Employees: The mention of an irrevocable voting proxy from certain employees to Xiaoping Chen indicates a degree of alignment or control over employee-held shares.

Key Dates

Keywords

Viomi Technology, Xiaoping Chen, Beneficial Ownership, SEC Filing, Schedule 13G, Class A Shares, Class B Shares, Voting Power, Corporate Governance, Insider Ownership