Core Viewpoint - The company, Xinghuan Technology (688031.SH), has submitted an application for issuing H-shares and listing on the Hong Kong Stock Exchange on August 18, 2025 [1] Group 1 - The company has filed the application materials for this issuance on the Hong Kong Stock Exchange's website on the same day [1] - The company has also submitted the filing application materials to the China Securities Regulatory Commission (CSRC) according to relevant regulations [1] - The CSRC has recently accepted the filing application materials from the company [1]

Core Viewpoint - The company, StarRing Technology (688031.SH), has submitted an application for issuing H-shares and listing on the Hong Kong Stock Exchange on August 18, 2025 [1] Group 1 - The application materials for the issuance have been published on the Hong Kong Stock Exchange website on the same day [1] - The company has submitted the filing application materials to the China Securities Regulatory Commission (CSRC) according to relevant regulations [1] - The filing application materials have recently been accepted by the CSRC [1]

Core Viewpoint - The company has submitted an application for issuing H-shares and listing on the Hong Kong Stock Exchange, indicating a strategic move to expand its capital base and enhance market presence [1] Group 1 - The company submitted its application to the Hong Kong Stock Exchange on August 18, 2025 [1] - The application materials were published on the Hong Kong Stock Exchange website on the same day [1] - The company has also submitted the filing materials for this issuance to the China Securities Regulatory Commission, which has recently accepted the application [1]

Core Viewpoint - The company has submitted an application for issuing H-shares and listing on the Hong Kong Stock Exchange, which has been accepted by the China Securities Regulatory Commission [1] Group 1 - The application was submitted on August 18, 2025 [1] - The company is awaiting approvals from the China Securities Regulatory Commission, the Hong Kong Securities and Futures Commission, and the Hong Kong Stock Exchange [1] - There is uncertainty regarding the approval process from relevant regulatory bodies [1]

Investment Rating - The investment rating for the company is maintained as "Buy" [5] Core Insights - The company has shown a significant improvement in its operational metrics, with a notable increase in AI-related revenue orders and a strategic focus on channel empowerment for its outbound strategy [1] - In the first half of 2025, the company achieved a revenue of 153 million yuan, representing a year-on-year growth of 8.82%, and a reduced net loss of 143 million yuan compared to the previous year [2] - The company has launched a new generation of AI infrastructure, positioning its data platform as a core component, which highlights the strategic importance of deep integration between AI and data [3] - A strategic partnership with Hong Kong Broadband has been established, marking a commitment to an outbound strategy and enhancing the company's digital transformation offerings [4] Financial Summary - The company forecasts revenues of 500.45 million yuan for 2025, with a projected growth rate of 34.71% compared to 2024 [10] - The gross profit margin for the first half of 2025 was reported at 45.68%, with a significant improvement in the second quarter to 52.24% [2] - The operating cash flow showed substantial improvement, with a net cash flow of -133 million yuan in the first half of 2025, indicating better cash management [2]

Core Insights - Star Ring Technology (688031) reported a total revenue of 153 million yuan for the first half of 2025, an increase of 8.82% year-on-year, while the net profit attributable to shareholders was -143 million yuan, improving by 25.24% year-on-year [1] - The company’s gross margin was 45.68%, down 4.94% year-on-year, and the net margin was -93.73%, an improvement of 31.45% year-on-year [1] - The company has a significant amount of accounts receivable, which accounted for 76.65% of total revenue in the latest annual report [1] Financial Performance - Total revenue for 2025 was 153 million yuan, compared to 140 million yuan in 2024, reflecting an 8.82% increase [1] - The net profit attributable to shareholders improved from -191 million yuan in 2024 to -143 million yuan in 2025, a 25.24% improvement [1] - The gross margin decreased from 48.06% in 2024 to 45.68% in 2025, while the net margin improved from -136.73% to -93.73% [1] - Total expenses (selling, administrative, and financial) amounted to 137 million yuan, accounting for 89.61% of revenue, down 25.31% year-on-year [1] Cash Flow and Debt - The company reported a significant increase in cash and cash equivalents, rising by 415.27% to 507 million yuan [1] - Accounts receivable decreased by 18.32% from 349 million yuan in 2024 to 285 million yuan in 2025 [1] - Interest-bearing debt increased by 20.14% from 56.34 million yuan to 67.69 million yuan [1] Market Position and Analyst Expectations - Analysts expect the company to report a loss of 238 million yuan for 2025, with an average earnings per share estimate of -1.96 yuan [2] - The company has a historical median Return on Invested Capital (ROIC) of -25.39%, indicating poor investment returns [1] - The company has experienced seven years of losses since its listing, with a notable ROIC of -163.75% in 2018 [1] Fund Holdings - The largest fund holding Star Ring Technology is the Galaxy Intelligent Mixed A Fund, which holds 1.2 million shares [3] - The fund has seen a recent increase in holdings, with a current scale of 690 million yuan and a net value of 3.242 as of August 29 [3]

Fundraising Overview - The company raised a total of RMB 143,016.98 million from its initial public offering, with a net amount of RMB 134,783.29 million after deducting issuance costs [1][2] - The funds are stored in a dedicated special account, and a tripartite supervision agreement has been signed with the sponsor and the commercial bank [1] Fund Utilization - Due to the actual net amount being lower than the planned investment in the prospectus, the company adjusted the total investment scale and the scale of funds used for projects, maintaining a total of RMB 134,783.29 million [2] - Some funds are temporarily idle due to the construction cycle of the fundraising projects [2] Cash Management Plan - The purpose of cash management is to ensure that the use of idle funds does not affect project construction and to enhance fund efficiency [3] - The company plans to use up to RMB 50,000 million of temporarily idle funds for cash management within a 12-month period [3][6] - Investment products will include safe, liquid options such as structured deposits, time deposits, and large certificates of deposit [3] Implementation and Oversight - The board of directors has authorized the chairman or designated individuals to make investment decisions and sign relevant legal documents [3] - The company will adhere to regulatory requirements for information disclosure regarding cash management activities [5] Impact on Operations - The cash management initiative is designed to improve fund efficiency without impacting the normal operations of the company or its main business [4][7] - The income generated from cash management will be used to supplement any shortfall in project investment amounts [5] Compliance and Approval - The cash management plan has been approved by the board of directors and complies with relevant regulations and internal management systems [7] - The sponsor has confirmed that the plan does not alter the intended use of the raised funds and will not harm the interests of the company or its shareholders [7]

Overview - The company plans to use idle self-owned funds for cash management to improve fund utilization efficiency and increase investment returns for the company and its shareholders [1][4]. Cash Management Details - The purpose of cash management is to enhance the efficiency of idle funds without affecting the company's main business operations and ensuring operational funding needs [1]. - The company intends to use up to RMB 400 million for cash management [1]. - The funds are sourced from legally compliant idle self-owned funds, ensuring normal business operations [1]. - Investment products will be selected from financial institutions with legal qualifications, focusing on high safety and liquidity, excluding securities investments [1][2]. Implementation and Duration - The cash management authorization is valid for 12 months from the board's approval, allowing for rolling use of the specified amount [2][4]. - The board has authorized the chairman to make investment decisions and sign relevant contracts, with the finance department responsible for implementation [2]. Impact on Daily Operations - The use of idle funds for investment will not affect the company's main business and is expected to improve fund efficiency and generate investment returns, enhancing overall company performance [2][3]. Risk Management - The company aims to invest in low-risk, liquid financial products, with a focus on controlling investment risks [3]. - The company will monitor economic conditions and market changes to adjust investment strategies accordingly [3]. Approval Process - The board of directors approved the cash management proposal during a meeting on August 27, 2025, ensuring compliance with operational funding needs and fund safety [3][4]. Sponsor's Opinion - The sponsor believes the cash management initiative has been approved by the board and complies with relevant laws and regulations, enhancing the efficiency of idle funds and benefiting all shareholders [4].

Investment Rating - The report maintains a "Strong Buy" investment rating for the company [3]. Core Views - The company has narrowed its losses in the first half of the year, showing significant improvement in operational cash flow and effective cost optimization. Demand from key industries such as finance and energy has led to a continuous influx of large model-related orders [1][6]. - The company has launched a new generation of AI Infra, with ongoing orders related to large models, indicating a strategic upgrade from Data Infra to AI Infra. This transition is expected to yield positive results in the coming years [6][12]. - The financial outlook for the company shows projected revenues of 5.23 billion, 6.93 billion, and 9.18 billion for the years 2025 to 2027, respectively, reflecting a clear growth trajectory [6][12]. Financial Data and Valuation - The company reported total revenue of 1.53 billion in the first half of 2025, with a year-over-year increase of 8.82%. The net loss attributable to the parent company was 1.43 billion, a 25.24% improvement year-over-year [6][12]. - The operating cash flow improved significantly, with a year-over-year increase of 45.87%, attributed to enhanced management and operational efficiency [6][12]. - The financial projections indicate a total revenue of 523 million in 2025, with a year-over-year growth of 41%, followed by 693 million in 2026 and 918 million in 2027, both maintaining a growth rate of 32% [2][13]. Shareholder Information - The company has a total share capital of 121 million shares, with a market capitalization of 7.3 billion. The major shareholder, Sun Yuanhao, holds a 9.22% stake in the company [3][6].

Group 1 - The digital watermark concept sector experienced a decline of 2.15%, ranking among the top losers in the concept sector, with major stocks like Hongbo Co., Ltd. hitting the limit down, while a few stocks like Xinghuan Technology and ST Lingnan saw gains of 3.61% and 1.19% respectively [1][2] - The digital watermark sector faced a net outflow of 1.271 billion yuan, with 22 stocks experiencing net outflows, and 7 stocks seeing outflows exceeding 50 million yuan, led by Hongbo Co., Ltd. with a net outflow of 574 million yuan [2][3] - The top stocks with net outflows included Tianrongxin, Vision China, and Dongfang Guoxin, with net outflows of 227 million yuan, 132.66 million yuan, and 65.30 million yuan respectively [2][3] Group 2 - The concept sectors with the highest gains included the military equipment restructuring concept at 3.57%, sodium-ion batteries at 2.41%, and graphite electrodes at 2.32%, while the digital watermark concept was among the top losers [2] - The main stocks with net inflows in the digital watermark sector included Ruike Laser, Xinghuan Technology, and ST Yilianzhong, with net inflows of 44.65 million yuan, 43.82 million yuan, and 7.78 million yuan respectively [2][3]