Core Viewpoint - Recently, a cloud communication company based in Beijing, Xunzhong Communication Technology Co., Ltd., has initiated its IPO process by submitting a prospectus to the Hong Kong Stock Exchange, with DBS Bank as its sponsor [2][3]. Company Overview - Founded in November 2008 by Park Seong-geun, Xunzhong Communication is headquartered in Chaoyang District, Beijing, and focuses on the development of cloud communication services [4]. - The company went public on the New Third Board in June 2015 and has undergone multiple rounds of financing from various investors, including Unicom Innovation and Beijing Qianyi [4]. - As of April 23, 2025, Park Seong-geun holds approximately 27.36% of the company's shares, making him the largest single shareholder [4]. Business Model and Services - Xunzhong Communication primarily offers three types of solutions: cloud communication services (including CPaaS and contact center SaaS), intelligent communication solutions, and other communication solutions [4]. - The core of the company's business is the Communication Platform as a Service (CPaaS), which has accounted for over 80% of its revenue in recent years [5]. Financial Performance - The company's revenue for the years 2022, 2023, and 2024 was approximately RMB 809.74 million, RMB 915.63 million, and RMB 917.61 million, respectively, with net profits of RMB 74.66 million, RMB 76.58 million, and RMB 50.64 million [10][11]. - The overall gross profit margins for the same years were 24.1%, 21.4%, and 22.1%, with a notable decline in 2023 due to a significant increase in lower-margin messaging service revenues [12]. Market Position - Xunzhong Communication holds a market share of approximately 1.8% in the competitive Chinese cloud communication services market, which consists of around 800 providers [24]. - The Chinese cloud communication services market has shown steady growth, with total revenue increasing from RMB 31.2 billion in 2019 to RMB 48.5 billion in 2023, reflecting a compound annual growth rate (CAGR) of 11.7% [21]. Challenges - The company faces high accounts receivable and prepayments, leading to negative operating cash flow in recent years, with cash outflows of RMB 117 million, RMB 56.2 million, and RMB 114 million for the respective years [17]. - Xunzhong Communication's reliance on telecom operators for resources limits its bargaining power within the industry, impacting its financial stability [15][16].