Core Viewpoint - HaiMa Cloud has submitted an application for a Hong Kong IPO, positioning itself as the largest GPUaaS provider for real-time cloud rendering in China's cloud gaming industry, with a projected revenue CAGR of 33.8% from 2022 to 2024, despite ongoing losses [1][10]. Group 1: Company Overview - HaiMa Cloud is recognized as the largest GPUaaS provider for real-time cloud rendering in China, holding a market share of 17.9% in 2024 [3]. - The company has established long-term partnerships with major players in the industry, including China Mobile and several leading game developers, serving over 28,000 games as of December 31, 2024 [5]. Group 2: Financial Performance - Revenue is expected to grow from RMB 290.29 million in 2022 to RMB 519.53 million in 2024, reflecting a CAGR of 33.8% [10]. - Despite revenue growth, the company has not achieved profitability, with losses projected at RMB 186 million in 2024, down from RMB 246 million in 2022 [10]. - The gross profit margin is projected to decline from 26.6% in 2023 to 24.9% in 2024, influenced by high R&D and administrative expenses [11]. Group 3: Customer Concentration - The company exhibits high customer concentration, with revenue from its top five clients accounting for 72.7% of total revenue in 2024 [2][7]. - Migu Culture, a digital entertainment company, is the largest client, contributing 42.5%, 46.4%, and 35.7% of total revenue in 2022, 2023, and 2024, respectively [9]. Group 4: Investment and Use of Proceeds - The funds raised from the IPO will be allocated towards infrastructure investment, R&D for core platform software, and the development of emerging products, including enhancements in gaming AI capabilities [13].

Core Viewpoint - HaiMa Cloud Technology Co., Ltd. is preparing for an IPO on the Hong Kong Stock Exchange, aiming to leverage its leading position in the real-time cloud rendering service market for cloud gaming in China, with a market share of 17.9% projected for 2024 [1][3]. Financial Performance - The company has experienced rapid revenue growth, with projected revenues of RMB 2.9 billion, RMB 3.37 billion, and RMB 5.2 billion for the years 2022, 2023, and 2024 respectively, resulting in a compound annual growth rate (CAGR) of 33.8% over three years [3][5]. - Revenue is primarily derived from cloud gaming GPU as a service (GPUaaS) and cloud-native content services, with GPUaaS revenues of RMB 2.48 billion, RMB 2.2 billion, and RMB 4.58 billion for the same years, accounting for 85.4%, 65.4%, and 88.1% of total revenue respectively [3][5]. - Gross profit increased from RMB 61.64 million in 2022 to RMB 89.41 million in 2023, and further to RMB 129.38 million in 2024, with a CAGR of 44.9% [5][6]. Losses and Financial Health - Despite revenue growth, the company reported net losses of RMB 2.45 billion, RMB 2.17 billion, and RMB 1.85 billion for the years 2022, 2023, and 2024, totaling RMB 6.47 billion in cumulative losses [6][8]. - As of December 31, 2024, the company held cash and cash equivalents of RMB 26.24 million, with bank and other borrowings amounting to RMB 154 million, indicating a need for additional funding to sustain operations [8][9]. Customer Dependency - The company has a significant reliance on major clients, with the top five clients contributing 81.2%, 72.3%, and 72.7% of total revenue from 2022 to 2024. Migu Culture, the largest client, accounted for 42.5%, 46.4%, and 35.7% of total revenue during the same period [9][11]. - The number of clients for GPUaaS increased from 37 to 69 between 2022 and 2024, with customer retention rates improving from 77.8% to 88.6% [9]. Market Outlook - The market for real-time cloud rendering services in cloud gaming is expected to reach RMB 11.6 billion by 2029, with a CAGR of 35.4% from 2024 to 2029 [9]. - HaiMa Cloud aims to increase its market share from 12.5% in 2023 to 17.9% in 2024 [9]. Funding and Investment - The company has raised a total of RMB 1.105 billion across 10 funding rounds since 2014, with notable investors including Migu Culture and UCloud [12][14]. - Proceeds from the IPO are intended for infrastructure investment, R&D funding, and operational expenses [12][14].

Group 1 - A-shares experienced a significant sell-off, with over 4,100 stocks declining and main funds exiting nearly 400 billion yuan within half a day [3][7][12] - The banking sector struggled to maintain support, with major banks like ICBC and CCB losing all gains [10] - Consumer and technology sectors faced heavy selling pressure, particularly during the pre-holiday period, as investors opted to secure profits [13][14] Group 2 - The market saw a dramatic drop in liquidity, with total trading volume shrinking to below 1.1 trillion yuan, a 15% decrease from the previous day [26] - The small-cap stocks were heavily impacted, with the CSI 2000 index plummeting by 0.95% and a staggering 97% of stocks declining [19][20][21] - The recent surge in AI-related stocks faced a sharp correction, with companies like Kunlun Wanwei and Wanxing Technology dropping over 7% [23] Group 3 - Technical indicators showed significant breakdowns, with the Shanghai Composite Index losing key support levels, including the 20-day moving average [28][29] - The market's fear was exacerbated by a surge in reverse repurchase rates, indicating severe liquidity issues [16] - The internal economic environment worsened, with industrial profits declining by 8.3% year-on-year, reflecting a lack of recovery [35] Group 4 - The main sectors experiencing net outflows included liquor (-4.2 billion), information technology (-3.8 billion), and brokerage firms (-3.5 billion) [40] - Notable stocks facing heavy selling included Ningde Times (-720 million), Moutai (-580 million), and Zhongji Xuchuang (-410 million) [40] - The gaming sector was the hardest hit, with a decline of 4.3%, followed closely by solid-state batteries and consumer electronics [40]

Market Overview - The three major stock indices in Shanghai and Shenzhen opened lower on May 26, with the Shanghai Composite Index experiencing a high and then retreating, while the Shenzhen Component and ChiNext indices showed a downward trend, continuing the adjustment seen in the previous two trading days [1] - By the midday close, the Shanghai Composite Index was at 3338.42 points, down 0.30%, with a trading volume of approximately 256.1 billion; the Shenzhen Component was at 10060.36 points, down 0.71%, with a trading volume of approximately 391.1 billion; the ChiNext Index was at 1995.61 points, down 1.28%, with a trading volume of approximately 172.6 billion [1] Institutional Insights - CITIC Securities noted an increase in external uncertainties and a faster rotation of themes, leading to a heightened preference for certain assets. They recommend prioritizing core assets and low-position sectors, while emphasizing the importance of domestic stimulus policies and global geopolitical changes [2] - China Galaxy Securities observed frequent style switching between large and small caps, indicating a lack of sustained upward trends. They highlighted the cautious sentiment among investors and the ongoing support from domestic policies aimed at stabilizing growth [2] Industry Focus - Guojin Securities reported strong growth in domestic demand for home appliances, with a focus on leveraging subsidies and the white goods sector's potential. They also suggested monitoring the black goods sector for ongoing structural upgrades and identifying opportunities in small appliances [3] Policy Developments - The Ministry of Commerce announced a plan to cultivate around 100 leading national smart supply chain enterprises by 2030, emphasizing the use of AI, IoT, and blockchain technologies to enhance supply chain digitalization and resilience [4] - The State Administration for Market Regulation is seeking public opinions on a guideline aimed at regulating the fees charged by online trading platforms to ensure fair practices and promote healthy development in the platform economy [5]

Core Viewpoint - The article emphasizes the importance of enhancing consumer spending in China through improved income, social security, and consumption quality, while advocating for a systematic approach to consumption policy that aligns supply and demand effectively [1][2]. Group 1: Demand Side - The foundation for enhancing consumer spending lies in stabilizing the real estate and stock markets, which are crucial for maintaining residents' asset expectations and consumption willingness [4]. - Over 400 million people in China are classified as middle-income households, defined by an annual income between 100,000 and 500,000 yuan [4]. - The government aims to restore residents' balance sheets by ensuring stability in property and stock markets, thereby boosting consumer confidence [4]. Group 2: Supply Side - The shift towards a service and digital economy necessitates an increase in the supply of quality goods and services, as traditional goods consumption is declining [5][6]. - The rise of sectors such as cultural tourism, healthcare, and education indicates a growing demand for service consumption, with online retail's share of total social retail sales increasing from under 13% in 2015 to over 30% currently [5][6]. - Key areas for supply enhancement include green consumption, high-end products, and new consumption models, particularly in electric vehicles and smart home appliances [6]. Group 3: Government Coordination - There is a need for a coordinated consumption policy framework that addresses the diverse and multi-layered consumer demands across different regions and demographics [7]. - Central government policies should focus on overall planning and leverage fiscal incentives and major project layouts to stimulate consumption [7]. - Local governments should tailor policies to fit regional consumption habits and economic conditions, fostering a collaborative ecosystem between central and local authorities [7].