DJI Rival XAG Files for Hong Kong IPO After Achieving Profitability
Chinese agricultural drone maker XAG Technology, a significant competitor to market leader DJI, has submitted an application for an initial public offering in Hong Kong. The filing marks the company's second attempt to go public, following a withdrawn application for Shanghai's STAR Market in 2021.
The move comes after XAG achieved a financial turnaround, reporting a net profit of 70.41 million yuan on revenue of 1.066 billion yuan (approximately $147 million) in 2024, reversing losses from the previous two years. The company's growth continued into the first half of 2025, with revenues reaching 745 million yuan and profits hitting 130 million yuan. XAG's gross margin has also steadily improved, rising from 17.9% in 2022 to 34.3% in the first half of 2025.
According to a Frost & Sullivan report cited in its prospectus, XAG held a 17.1% share of the global agricultural drone market in 2024, ranking second behind DJI’s dominant 59% share. Within China, XAG accounted for 20.8% of the agricultural drone market by revenue in 2024, compared to DJI's 63.9%. Founded in 2007 by former Microsoft engineer Peng Bin, XAG develops products including drones for crop spraying and seeding, agricultural utility vehicles, and smart farming systems.
Despite its recent profitability, the company's prospectus outlines several risks. XAG remains heavily dependent on its agricultural drone business, which contributed 89% of its revenue in the first half of 2025. The company's research and development spending as a percentage of revenue has also declined, falling from 32.1% in 2022 to approximately 10% in the first six months of 2025. Other challenges include intense market competition, potential supply chain disruptions, and geopolitical risks associated with its international operations, which accounted for 34.8% of its revenue in 2024.
XAG is backed by several high-profile investors, including SoftBank Group, which is its largest external shareholder with a 12.86% stake. Other backers include Hillhouse Capital, Baidu Capital, and Sinovation Ventures. The company plans to use the proceeds from its Hong Kong IPO to fund the research and development of next-generation agricultural robotics, expand its global sales channels, construct a new headquarters and R&D center, and supplement working capital.