Just three weeks after reporting its first adjusted annual profit for the full year 2025, artificial intelligence company PHANCY (6682.HK) launched a share placement for additional financing on April 22, 2026.
According to a company announcement, PHANCY has entered into a placement agreement with China International Capital Corporation (CICC) and Huatai International, planning to place up to 38.8 million new H shares to no fewer than six independent third parties at a price of HKD 40.36 per share. The net proceeds from the placement are expected to be approximately HKD 1.556 billion. The placement price of HKD 40.36 per share represents a discount of approximately 11.95% to the closing price of HKD 45.84 on April 21, 2026, and a discount of approximately 6.03% to the average closing price of HKD 42.95 over the previous five trading days.
However, this placement plan did not receive a positive response from the capital market. Dragged down by the share placement announcement, PHANCY's stock price fell sharply after the news was released, plunging more than 13% at one point to a low of HKD 39.62. This not only erased recent gains but also pushed the price below the HKD 40.36 per share placement price. By the market close, the company's turnover recorded HKD 640 million, reflecting a strong market reaction to concerns about equity dilution.
It is noteworthy that this placement comes only about three weeks after PHANCY released its full-year 2025 results announcement. For fiscal year 2025, the company reported total revenue of RMB 7.135 billion, a year-on-year increase of 35.6%, and gross profit of RMB 2.483 billion, up 10.6% year-on-year. Its net loss narrowed significantly to RMB 26.27 million from RMB 269 million the previous year, and its adjusted net profit attributable to owners was RMB 17.84 million, marking the company's first annual profit since listing. Founder Dai Wenyuan stated during the earnings call that the company had entered a new cycle of simultaneous revenue growth and profit improvement. However, the new round of financing announced so soon after the seemingly strong results adds a concerning footnote to the performance.
Approximately 80% (about HKD 1.245 billion) of the raised funds are intended to advance heterogeneous AI computing equipment based on heterogeneous GPUs, providing infrastructure support for the group's API business. About 20% (about HKD 311 million) will be used for global business expansion and potential acquisitions of technical service providers supporting emerging businesses, including embodied intelligence and smart devices.
This placement is conducted under the general mandate granted to the board by shareholders at the annual general meeting held on June 26, 2025, and does not require additional shareholder approval. In other words, the financing arrangement involving billions of Hong Kong dollars does not necessitate a direct vote by the company's owners. Previously, on August 14, 2025, PHANCY had already allotted and issued 25.9 million H shares under the same general mandate; this placement represents the second utilization of the issuance quota under the same authorization in less than a year.
PHANCY's financing frequency has increased significantly in recent years. Since its listing on the Hong Kong Stock Exchange on September 28, 2023, the company has completed three large-scale equity financing rounds.
At the time of its initial public offering (IPO), the company raised approximately HKD 1.03 billion. In February 2025, the company placed 27.92 million shares at a price of HKD 50.2 per share, a discount of approximately 11.62%, raising about HKD 1.402 billion. The announcement for that round indicated the funds would be used primarily for core product R&D, expansion into new markets, potential merger and acquisition opportunities, and general corporate purposes. In July of the same year, the company again placed 25.9 million shares to a fund under Infinite Capital at a price of HKD 50.5 per share, a discount of approximately 8.93%, raising net proceeds of approximately HKD 1.306 billion. Including the current financing of approximately HKD 1.556 billion, PHANCY's total cumulative funds raised since listing have surpassed the HKD 5 billion mark.
However, external interpretations of the urgency for financing are not entirely optimistic. From a liquidity perspective, the company's cash and cash equivalents as of the end of 2024 were only RMB 860 million. Based on a net cash outflow of approximately RMB 1.12 billion that year, this was sufficient to support less than a year of operations. This may partially explain why the company continues to seek external funding without pause, even after significantly reducing losses and achieving an adjusted profit. Following the receipt of approximately HKD 2.7 billion from the two financing rounds in 2025, cash and cash equivalents had rebounded to approximately RMB 1.997 billion by the end of 2025. It is noteworthy, however, that the company holds a significant amount of short-term wealth management investments and term deposits, indicating a liquidity situation far from the "dire straits" some market participants might fear. This suggests that behind the frequent financing may not be a simple liquidity crisis, but rather a strategic choice by the company and management to prioritize equity financing over debt financing to meet the substantial investment requirements for AI computing infrastructure.
From the underlying logic of operational metrics, several details warrant careful scrutiny.
In 2025, the company's R&D expenses reached a high of RMB 2.337 billion, a year-on-year increase of 7.7%, accounting for 32.7% of operating revenue, indicating the company remains in a period of high-intensity technological investment. Furthermore, capital expenditures for purchasing hardware equipment and developing computing infrastructure continue to climb. Reflected in the financial report, the company's fixed assets surged from RMB 34.685 million at the end of 2024 to RMB 291 million at the end of 2025, an increase of over seven times, and this is merely the tip of the iceberg for computing investments expected to reach tens of billions. Meanwhile, the gross profit margin decreased from 42.7% to 34.8%, which the company attributed in its financial report to an increased proportion of hardware products. The continuation of this trend will exert long-term pressure on future profit margins.
By the end of 2025, the AI Platform business still contributed 91.8% of the company's total revenue. Although the API business and Agentic AI business showed relatively high growth rates, they accounted for only 1.1% and 7.1% of revenue, respectively. The path to commercial success for these new businesses still requires ongoing validation.
As of the end of 2025, the company's total trade receivables amounted to RMB 2.633 billion. Although this was down from RMB 3.367 billion at the end of 2024, it remains at an elevated level. While the company disclosed that its provision for credit impairment losses narrowed significantly from approximately RMB 200 million in 2024 to RMB 17.4 million in the reporting period, indicating strengthened receivables management, the substantial accounts receivable still pose a potential threat to the stability of the company's cash flow, especially against a backdrop of a persistently tight macro credit environment.
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