Executive Summary / Key Takeaways

• JIADE Limited (JDZG) is a rapidly expanding provider of comprehensive education supporting services for adult education institutions in China, leveraging its proprietary Kebiao Technology Educational Administration Platform (KB Platform) and strategic acquisitions.
• The company has demonstrated strong revenue growth, from approximately RMB10.24 million in 2022 to RMB18.74 million in 2024, driven by its scalable tech solutions and expanding service offerings.
• Recent acquisitions of Kunyuan and Jiazhi have significantly diversified JDZG's revenue streams into mandatory production safety and vocational skills training, benefiting from high repeat business due to regulatory requirements.
• JDZG's competitive edge stems from its specialized, tech-driven platform, continuous R&D, and agile market entry, positioning it effectively against larger, more diversified edtech players in its niche.
• Investors must weigh the company's growth potential against significant risks, including the inherent uncertainties of operating under evolving PRC regulatory oversight, the impact of its dual-class share structure, and potential dilution from its self-underwritten public offering.

The Digital Backbone of China's Adult Education

JIADE Limited (JDZG), through its PRC subsidiaries, is carving out a significant niche in China's burgeoning adult education sector. The company's core mission revolves around providing comprehensive, one-stop education supporting services to adult education institutions, underpinned by a robust technological framework and a strategic approach to market expansion. This foundational strategy, rooted in its history, positions JDZG as a key enabler for efficiency and effectiveness within a fast-growing industry.

The cornerstone of JDZG's offering is the Kebiao Technology Educational Administration Platform (KB Platform). This proprietary software is designed to streamline information and data management across the entire adult education teaching cycle, from initial enrollment to post-graduation. The platform's comprehensive functionalities, encompassing enrollment consultation, student information collection, status management, learning progress tracking, grade inquiry, and graduation management, offer tangible benefits to its institutional clients. By automating and centralizing these processes, the KB Platform significantly improves student management efficiency, reduces labor costs, and minimizes human errors in data handling. This technological differentiation is a critical component of JDZG's competitive moat, allowing it to offer a more integrated and efficient solution compared to more generalized offerings in the market.

JDZG's commitment to technological innovation is further evidenced by its intellectual property portfolio, which includes 36 software copyrights and eight copyright registration certificates acquired since April 2020. In November 2022, Kebiao Technology, one of JDZG's key PRC subsidiaries, was recognized as a High and New Technology Enterprise (HNTE) by Sichuan provincial authorities. This designation underscores the company's continuous investment in research and development and its successful commercialization of technology within high-tech sectors. The strategic intent behind this ongoing R&D is to develop and update existing and new software systems, further expanding business and profitability.

Beyond its core platform, JDZG provides a suite of auxiliary solutions that complement the KB Platform. These services span the entire teaching cycle, offering pre-enrollment guidance on school and major selection, application strategy development, entrance exam training, application assistance, offline tutoring, exam administration, and guidance on graduation thesis preparation. This holistic approach ensures that adult education institutions receive end-to-end support, enhancing the value proposition of JDZG's services.

Strategic Expansion and Operational Achievements

JDZG's business has experienced rapid growth since its inception, a testament to its effective strategy and the underlying market demand. The company's PRC subsidiaries had provided technological support services to over 17 adult education institutions and support services to approximately 88,807 students by December 31, 2024. This operational scale highlights the increasing adoption of its platform and services within the adult education landscape.

A significant strategic move occurred in January 2025 with the completion of the acquisitions of Kunyuan and Jiazhi. These acquisitions represent a deliberate expansion into the critical area of production safety training and vocational skills development. Kunyuan and Jiazhi specialize in providing mandatory safety technology training for personnel engaged in five major categories of conventional special operations, including fusion welding, work at height, high-altitude operations, high-voltage electrical work, and low-voltage electrical work.

The business model of Kunyuan and Jiazhi is particularly compelling due to its recurring revenue nature. Personnel in these special operations are required by the Ministry of Emergency Management of China to complete refresher training every three years and certification renewal training every six years. This regulatory mandate ensures a high rate of repeat business, providing a stable and predictable revenue stream for JDZG. Kunyuan, for instance, trains approximately 800 individuals per month, generating training fees of approximately RMB1,000 per person for initial training and RMB300 for refresher or renewal training. Similarly, Jiazhi trains approximately 400 individuals per month with comparable fee structures. Furthermore, Jiazhi is expanding into supporting facilities like accommodation and catering services, which are expected to generate additional revenue and enhance overall profitability. This strategic diversification not only broadens JDZG's market reach but also strengthens its financial resilience through a blend of software-as-a-service and recurring training revenue.

Financial Performance and Capital Deployment

JDZG has demonstrated a compelling growth trajectory in its financial performance. Total revenue grew from approximately RMB10.24 million in 2022 to RMB15.57 million in 2023, and further to RMB18.74 million (US$2.57 million) in 2024. This consistent top-line expansion reflects the increasing demand for its education supporting services and the successful integration of its offerings. Net income, while showing a dip in 2024 to RMB5.61 million (US$768,000) from RMB9.56 million in 2023, still represents a substantial profit base, especially considering the strategic investments and acquisitions made during the period. The net income in 2022 was RMB5.36 million.

The company's working capital has also seen significant improvement, rising from approximately RMB6.59 million in 2022 to RMB15.40 million in 2023, and reaching RMB21.26 million (US$2.91 million) by December 31, 2024. This robust working capital position provides JDZG with operational flexibility and the capacity to fund its growth initiatives. Cash on hand, however, decreased from RMB7.82 million in 2023 to RMB3.92 million (US$537,000) in 2024, indicating active deployment of capital for growth and acquisitions.

In May 2024, JDZG completed its Initial Public Offering (IPO), raising $9.20 million in gross proceeds, with net proceeds of approximately $6.60 million. The company is currently undertaking a best-efforts public offering of up to 20.00 million Class A Ordinary Shares at an assumed public offering price of $0.95 per share, aiming to raise approximately $18.79 million in net proceeds. These proceeds are strategically earmarked for market expansion and promotion in new regions (approximately 30%), research and development investment (approximately 30%), acquisition of vocational training institutions (approximately 20%), and working capital purposes (approximately 20%). This capital allocation plan underscores JDZG's commitment to sustained growth through both organic expansion and inorganic strategies, particularly in the high-demand vocational training segment.

Competitive Landscape and Strategic Positioning

JDZG operates within a dynamic and competitive edtech landscape in China. While precise, directly comparable market share figures for all niche competitors are not publicly detailed, the company's strong performance in adult education support suggests effective penetration. JDZG's primary competitive advantages lie in its specialized, tech-driven platform and its focused approach to the adult education market.

Compared to larger, more diversified players like New Oriental Education & Technology Group Inc. (EDU), TAL Education Group (TAL), and Gaotu Techedu Inc. (GOTU), JDZG's offerings appear more specialized for adult education, potentially offering greater efficiency in user interfaces for administrative tasks. JDZG's strategy as a newer entrant emphasizes agility and innovation in software solutions, positioning it as more adaptable in shared markets like online enrollment and exam services. While New Oriental's broader market positioning, established brand, and diversified services likely give it an edge in customer reach and loyalty, JDZG's unique value proposition lies in its focused, tech-driven approach for adult learners, potentially offering more intuitive platforms for professional users.

JDZG's emphasis on auxiliary services, such as application strategy development and graduation thesis preparation, makes its offering more comprehensive for adult users compared to TAL's broader K-12 focus. In terms of innovation speed, JDZG's newer status could enable faster development cycles for new features, though it likely lags in overall product performance and innovation speed compared to TAL's notably faster iteration on learning tools. Against Gaotu, JDZG's platform might provide materially better integration for institutional management, such as student information and learning progress tracking, giving it a unique value proposition in adult education. However, Gaotu's emphasis on affordability and wide accessibility could make it more competitive in user acquisition.

JDZG's competitive strengths, including its wide-ranging software platform and auxiliary solutions, competitive technological advantages from proprietary software, and a scalable business model, are essential for its success. The company also benefits from robust governmental policies that bolster the fast-growing adult education industry, providing a supportive regulatory environment for its operations. This strategic positioning allows JDZG to effectively compete in targeted segments, leveraging its agility and specialization.

Risks and Considerations for Investors

Investing in JDZG's Class A Ordinary Shares involves a high degree of risk that discerning investors must carefully consider. A primary concern stems from the company's corporate structure as a Cayman Islands exempted company with no material operations of its own, conducting substantially all operations through its PRC subsidiaries. Chinese regulatory authorities could disallow this structure, which would likely result in a material change in operations and a significant decline or complete loss of value for Class A Ordinary Shares.

The evolving regulatory landscape in the PRC presents ongoing legal and operational risks. Applicable PRC laws and regulations are sometimes vague and uncertain, and recent governmental actions, including crackdowns on illegal securities activities and expanded cybersecurity reviews, could materially impact JDZG's operations. While JDZG's PRC counsel has confirmed it is not currently subject to cybersecurity review, the high uncertainty surrounding future interpretations and implementations of these regulations remains a significant risk. Furthermore, the Class A Ordinary Shares may be prohibited from trading under the Holding Foreign Companies Accountable Act (HFCA Act) if the PCAOB is unable to inspect the company's auditors for two consecutive years. While JDZG's current and previous auditors have been inspected by the PCAOB, future obstructions by PRC authorities could lead to a new determination.

The company's dual-class share structure concentrates voting control with Mr. Yuan Li, the Chairman of the Board and Co-Chief Executive Officer, who holds approximately 96.50% of the voting rights. This concentration of power limits other shareholders' ability to influence corporate matters and could lead to decisions not aligned with their interests, potentially discouraging change of control transactions. Shareholder advisory firms have also expressed opposition to multiple class structures, which could adversely affect the trading market for JDZG's Class A Ordinary Shares.

The current offering is self-underwritten, with Mr. Yuan Li selling shares without commission. His lack of experience in best-efforts offerings decreases the likelihood of a successful sale. Additionally, the sale or availability of substantial amounts of Class A Ordinary Shares in the public market could adversely affect their market price. New investors will also experience immediate and substantial dilution in the net tangible book value per share, as the public offering price is significantly higher than the pro forma as-adjusted net tangible book value per share attributable to existing shareholders. Management also retains broad discretion in the use of the net proceeds, and ineffective application could harm the business and financial condition.

Conclusion

JIADE Limited presents a compelling investment narrative as a technology-driven enabler in China's expanding adult education market. Its proprietary KB Platform, coupled with strategic acquisitions in the vocational training sector, positions the company for continued growth and recurring revenue streams. The company's historical revenue expansion and commitment to R&D underscore its operational effectiveness and strategic foresight in a dynamic industry.

However, the investment thesis is tempered by significant regulatory and governance risks inherent in its operational structure within the PRC, alongside the implications of its dual-class share structure and the nature of its public offering. JDZG's ability to leverage its technological leadership and execute its growth strategies while effectively navigating these complex external factors will be paramount to realizing its full potential. For investors with a high tolerance for risk and a long-term view on the Chinese adult education sector, JDZG offers exposure to a specialized and growing market segment, contingent on successful risk mitigation and strategic execution.