Core Viewpoint - Shenzhen Xunce Technology Co., Ltd. is seeking to go public on the Hong Kong Stock Exchange after two previous failed attempts, highlighting its ongoing efforts to secure funding despite facing intense competition in the real-time data infrastructure and analytics market [1][30]. Company Overview - Founded in 2016, Xunce Technology specializes in real-time data infrastructure and analytics solutions, with a focus on high R&D investment and a current lack of profitability [1][9]. - The company has received significant investments from major firms including Tencent, Alibaba, and Goldman Sachs, with a post-money valuation of 6.22 billion yuan as of November 2023 [2][3][4]. Financial Performance - Xunce Technology reported cumulative losses of 366 million yuan over three and a half years, with R&D expenses exceeding 70% of revenue [11][14]. - Revenue figures for the years 2022, 2023, and 2024 were 288.99 million yuan, 530.46 million yuan, and 631.98 million yuan respectively, with a decline in revenue noted in the first half of 2025 [14][15]. - The company’s gross profit margins fluctuated between 66.7% and 79% during the reporting periods, with a notable decrease in 2025 due to increased demand for customized solutions from asset management clients [16][17]. Market Position - Xunce Technology holds approximately 3.4% market share in China's real-time data infrastructure and analytics market, ranking fourth by revenue in 2024 [22][28]. - The company is particularly strong in the asset management sector, where it commands an 11.6% market share, making it the leading player in that niche [28][30]. - The overall market for real-time data infrastructure and analytics in China is projected to grow significantly, reaching 18.7 billion yuan in 2024, with a compound annual growth rate of 46.1% from 2020 to 2024 [25][28]. Client Base and Revenue Model - As of 2024, Xunce Technology had 232 paying clients, with 177 from the asset management sector and 55 from other industries, indicating a diversification in its client base [12][14]. - The average revenue per user (ARPU) for asset management clients was 1.38 million yuan, while for clients in other sectors, it was significantly higher at 7.05 million yuan [12][14]. R&D and Human Resources - The company employs around 320 R&D personnel, accounting for approximately 67% of its total workforce, reflecting its commitment to innovation [18]. - R&D expenditures have consistently represented a large portion of revenue, with figures of 2.59 billion yuan, 3.79 billion yuan, and 4.5 billion yuan reported over the last three years [18].

Core Insights - Shenzhen Xunce Technology is facing significant financial challenges as it approaches its IPO, with a drastic decline in revenue growth and an increase in net loss rate from 12.0% in 2023 to 54.6% in the first half of 2025 [1] Group 1: Business Focus - The company specializes in real-time data infrastructure and analysis solutions, primarily serving asset managers, and ranks fourth in the Chinese market for real-time data infrastructure and analysis, holding an 11.6% market share [2] - The solutions are modular, consisting of over 300 modules forming seven major solutions, with a customized pricing model based on data volume and processing speed [3] Group 2: Financial Performance - Revenue growth has fluctuated significantly, with a peak of 84.3% in 2023, followed by a decline to -30.0% in the first half of 2025, attributed to intensified market competition and project delays [4] - The net loss has widened, with the net loss rate increasing from 12.0% in 2023 to 54.6% in the first half of 2025, primarily due to increased R&D, administrative, and sales expenses amid declining revenue [5][8] - Gross margin has shown a downward trend, dropping to 66.7% in the first half of 2025, likely due to rising costs associated with customized solutions and new market expansions [6] Group 3: Revenue Composition - The revenue composition indicates a decline in the asset management sector's share, from 74.4% in 2022 to 47.3% in the first half of 2025, while the share from diversified industries has increased, reflecting the company's strategic expansion efforts [9] Group 4: Risks and Challenges - The company faces potential risks from related party transactions, which are not disclosed in the prospectus but could arise in the future [10] - Continuous losses present financial challenges, necessitating substantial funding for R&D and market expansion, with potential impacts on cash flow if profitability does not improve [11] - Intense competition in the asset management sector requires the company to maintain innovation and enhance competitiveness [12] - High customer concentration poses a risk, as revenue from the top five clients accounted for significant portions of total revenue, indicating vulnerability to client loss [13] Group 5: Governance and Management - The ownership structure is relatively concentrated, with a major shareholder controlling approximately 28.86% of the issued share capital, which may enhance decision-making efficiency but also raises concerns about minority shareholder interests [15] - The lack of detailed disclosures regarding the compensation and incentive mechanisms for core management may impact talent retention and company growth [16]