Taoping's Pivot to Smart Elevators Rides China's Policy Wave

TIANJIN, China – December 29, 2025 – Nasdaq-listed Taoping Inc. has announced a significant strategic pivot, anchoring its future growth in China's massive urban modernization push. The company revealed the establishment of a new corporate headquarters in Tianjin and the securing of US$2 million in smart elevator renewal contracts, signaling a determined move into the nation's burgeoning smart infrastructure sector.

The dual announcements highlight an aggressive strategy to capitalize on a market supercharged by government policy and pressing infrastructure needs. While the new contracts provide immediate revenue visibility, the move reflects a broader transformation for the company, shifting its focus from cloud services and new media toward the tangible world of AI-powered urban technology.

Capitalizing on a National Mandate

The newly secured US$2 million in contracts, awarded to Taoping's recently acquired subsidiary, Skyladder (Tianjin) Technology Development Co., Ltd., are set to be completed with revenue recognized in the first quarter of 2026. This provides a near-term boost and a proof-of-concept for the company's new direction. However, the true scale of the opportunity lies in the national context.

China is currently grappling with an aging elevator fleet. According to the State Administration for Market Regulation, of the approximately 12 million elevators operating nationwide, nearly 1.2 million have been in service for more than 15 years, creating a pressing need for upgrades and replacements. Recognizing this, the Chinese government has enacted powerful policies to stimulate modernization. State-issued directives in July 2024 and January 2025, focused on large-scale equipment renewal, have unlocked significant public funding.

Notably, Beijing has allocated around 150 billion yuan (US$21.31 billion) in special treasury bonds specifically to support these renewal efforts. Further financial incentives, including an advance allocation of 62.5 billion yuan (US$8.88 billion) for 2026 trade-in programs, now explicitly include subsidies for installing elevators in older residential buildings. This policy tailwind creates a powerful dual-growth cycle, as Taoping's Chairman and CEO, Jianghuai Lin, noted in a statement, driven by "both large-scale renewal demand and comprehensive intelligence upgrades."

Technology-Driven Differentiation

Taoping aims to differentiate itself in a competitive market that includes global giants like Kone Corp and Hitachi. The company is moving beyond what it calls the "traditional single-equipment upgrade approach" by deploying a sophisticated, technology-driven model. At its core are "deep IoT perception and AI-powered autonomous decision-making," systems designed to create a comprehensive, full life-cycle smart service.

This involves outfitting elevators with intelligent sensors that collect real-time operational data on everything from door function and cabin stability to motor temperature and cable tension. This data is fed into Taoping's proprietary cloud platforms, where AI algorithms analyze patterns, predict potential failures, and optimize maintenance schedules. The goal is to shift from a reactive repair model to a proactive, predictive one, enhancing safety and operational efficiency.

This approach aligns perfectly with China's broader "smart city" ambitions, which seek to integrate AI, big data, and IoT into urban management. As of late 2022, a prior iteration of Taoping's smart elevator program in Tianjin already covered 8,000 units, demonstrating a scalable model for real-time monitoring and on-demand maintenance. By offering a complete service ecosystem rather than just hardware, Taoping is positioning itself as a key partner for municipalities and property managers undertaking complex urban renewal projects.

A Calculated Corporate Evolution

This push into smart elevators represents a calculated evolution for Taoping. The company, which has a history in cloud platforms and digital marketing, is now aggressively diversifying into the industrial IoT space. The strategic underpinning for this move was laid bare with the November 2025 acquisition of Skyladder Group Limited, the parent of the subsidiary now executing on the new contracts.

The acquisition, valued at approximately US$21.36 million and paid for entirely in Taoping stock, was a significant bet. The deal includes stringent performance-based targets for Skyladder, with required revenue growing from RMB 74.14 million in 2026 to over RMB 180 million by 2029. This structure signals Taoping's confidence in the subsidiary's ability to capture a substantial piece of the modernization market and deliver long-term value.

Further cementing this new focus is the relocation of its corporate headquarters to Tianjin's Tiankai Higher Education Park. While maintaining its Shenzhen office as a southern innovation hub, the move to Tianjin places the company's leadership in a strategic northern hub, closer to key partners and government initiatives in the region. Mr. Lin stated the move "strengthens Taoping's operational foundation" and "enhances access to innovation resources."

Investor Caution Amid Strategic Ambition

Despite the promising strategy and favorable market conditions, investors have remained cautious. Taoping, a micro-cap company with a market valuation of around US$13.58 million, has seen its stock price languish near its 52-week low. Paradoxically, the December 29 announcement was met with a 6.12% decline in its share price, suggesting a disconnect between the company's positive news flow and market sentiment.

Financial analysts point to underlying concerns. An AI-driven analysis from TipRanks recently rated the stock as "Underperform," citing a history of declining revenues, persistent losses, and a shrinking gross profit margin, which fell from 22.9% in 2023 to 14.93% in the trailing twelve months. This suggests that while Taoping may be winning contracts, it could be at the expense of profitability. The company's balance sheet showed total debt of approximately US$10.41 million against shareholder equity of US$14.48 million as of its last fiscal year filing.

This financial picture presents a critical challenge. Taoping is attempting a bold and capital-intensive pivot into a competitive, hardware-centric industry while navigating the pressures of being a publicly traded micro-cap firm. The success of its smart elevator strategy will depend not only on its technological prowess and ability to leverage government policy, but also on its capacity to manage costs, achieve profitability, and ultimately convince a skeptical market that its transformation can deliver sustainable long-term value.