Business Context and Reporting Period
JIADE Ltd (Nasdaq: JDZG) is a Cayman Islands holding company providing one-stop comprehensive education supporting services to adult education institutions in China. The company operates primarily through its PRC subsidiaries, offering software platforms (the KB Platform) and auxiliary solutions for adult education, as well as safety technology training services. This Form 20-F covers the fiscal year ended December 31, 2025.
Key Financial Metrics (Year Ended Dec 31, 2025)
| Metric | 2025 (RMB) | 2025 (US$) | 2024 (RMB) | 2024 (US$) |
|---|---|---|---|---|
| Total Revenue | 25,701,513 | 3,673,691 | 18,742,196 | 2,567,670 |
| Net Income (Loss) | (10,528,493) | (1,504,911) | 5,606,782 | 768,126 |
| Operating Income (Loss) | (12,221,585) | (1,746,915) | 6,385,127 | 874,758 |
| Gross Margin | 45.4% | 45.4% | 69.8% | 69.8% |
| Cash and Equivalents | 19,773,580 | 2,826,372 | 3,918,146 | 560,047 |
| Working Capital | 66,163,483 | 9,457,195 | 21,262,205 | 2,954,000 |
| Total Debt (Bank Loans) | 16,240,000 | 2,321,294 | 4,000,000 | 571,747 |
Material Changes vs. Prior Period
- Revenue Growth: Revenue increased 37% to RMB 25.7 million, driven by new revenue streams from safety technology training (RMB 8.4 million), online courses, and customized equipment sales following the acquisition of Kunyuan and Jiazhi in early 2025.
- Profitability Decline: The company reported a net loss of RMB 10.5 million in 2025, a reversal from a net income of RMB 5.6 million in 2024. This was primarily due to a 223% increase in General and Administrative (G&A) expenses (to RMB 17.6 million) and a 148% increase in direct costs of revenue.
- Expense Drivers: G&A expenses surged due to increased share-based compensation (approx. RMB 6.3 million), higher consulting fees, and costs associated with new office leases and safety training operations. Selling expenses increased 667% due to significant promotion investments.
- Customer Concentration: While revenue grew, reliance on top customers decreased slightly. The top three customers accounted for 55% of revenue in 2025, down from 85% in 2024.
Guidance, Outlook, and Risks
- Strategic Outlook: Management plans to expand into new markets within Sichuan and other provinces, diversify offerings into production safety training, and continue investing in R&D for AI-driven educational tools.
- Internal Control Weakness: Management concluded that disclosure controls and procedures were not effective as of December 31, 2025, citing inadequate segregation of duties due to limited accounting staff. Remediation plans include hiring qualified personnel with U.S. GAAP experience.
- Regulatory Risks: Significant risks include PRC regulations on social insurance and housing fund contributions (estimated outstanding liability of RMB 622,000 plus potential fines), cybersecurity reviews, and the potential classification of the company as a PRC tax resident enterprise.
- Listing Status: The company regained compliance with Nasdaq minimum bid price requirements in July 2025 after a period of non-compliance.
- Subsequent Events: In February 2026, the company completed a registered direct offering raising approximately $3 million in gross proceeds.
Investor Verification Checklist
- Internal Controls: Verify the progress of remediation for the material weakness in internal controls over financial reporting.
- Expense Sustainability: Assess whether the sharp increase in G&A and selling expenses is a one-time cost of expansion or a structural increase that will permanently impact margins.
- Customer Concentration: Monitor the stability of the top three customers, which still represent over half of total revenue.
- Regulatory Compliance: Confirm the status of social insurance and housing fund contributions and any potential penalties from PRC authorities.
- Cash Burn: Review the company's ability to sustain operations given the net loss and increased debt levels, despite the recent capital raise.