Vatai Holdings Ltd. has filed to list on the Hong Kong Stock Exchange, reporting a 66% year-on-year revenue increase in the first half of FY26. The cross-border e-commerce compliance provider generated CNY 386 million in sales during the period, up from CNY 233 million a year earlier.

The company, which provides tax, environmental, and product compliance services for Chinese merchants selling globally, aims to capitalize on the expanding international trade sector. Vatai operates in 121 countries and regions, with Europe accounting for 83% of its revenue in H1FY26.

Financial Performance

Vatai’s revenue growth accelerated from 51% in FY25 and 46% in FY24. Adjusted profit, which excludes share-based compensation and restructuring charges, rose 70% to CNY 74.1 million from CNY 43.6 million in the same period last year.

The company’s customer base expanded significantly, with paying customers rising 47% to 246,245 last year from 167,133. This growth reflects increasing demand for regulatory navigation services as Chinese brands enter unfamiliar overseas markets.

Revenue streams were diversified across three primary service categories. Environmental compliance services grew 70% to account for 44.7% of total revenue. Tax compliance services also rose 70%, contributing 36.1% of sales. Product testing and certification services expanded 71%, making up 14.5% of revenue.

Geographic Exposure and Trade Risks

While Europe remains the dominant market, the Americas segment showed volatility linked to trade policy changes. Revenue growth in the Americas slowed to 28% in FY25 after the U.S. eliminated the de minimis duty-free exemption for packages under $800 from China. However, growth rebounded to 62% in H1FY26.

Europe did not experience a similar slowdown in FY25. The region recently imposed a temporary CNY 3 customs duty on packages worth EUR 150 or less, but Vatai’s European revenue remained stable in H1FY26.

Balance Sheet Strength

Vatai’s cash position strengthened considerably, rising to CNY 563 million by June from CNY 122 million a year earlier. This increase was supported by strong operating cash flows and pre-IPO funding from investors including IDG. Earlier backers include Boyu Capital and investment bank CICC, which serves as a main underwriter.

What the Numbers Show

The divergence between revenue growth and profit expansion highlights operational leverage. While revenue increased 66%, adjusted profit grew 70%, indicating that costs are scaling slightly slower than top-line income. Additionally, the resilience of the Americas business post-de minimis elimination suggests that regulatory headwinds may have less long-term impact than initially feared, provided merchants adapt their pricing or logistics strategies.