The market is receiving a clear response from Xunce Technology (03317) through a series of solid achievements in industrial implementation. The company has announced the signing of a strategic cooperation memorandum with Lutech S.p.A., a leading European technology services group, to jointly develop a scenario Token factory for the European market. This marks the official deployment of Xunce's TokenOS operating system in Europe, representing a significant step in the company's international strategy. This move is expected to further increase the proportion of overseas revenue for the full year, driving strong growth in Annual Recurring Revenue (ARR). Concurrently, the company has successfully completed a new share placement and convertible bond transaction, raising approximately HK$2.35 billion. This capital raise introduced several globally renowned institutional investors and top-tier sovereign funds, further optimizing the shareholder structure, enhancing the company's brand recognition and financial strength in international capital markets, and providing ample capital reserves for global expansion.
Regarding domestic operations, the Token factory has expanded horizontally into multiple sectors including physical AI, intelligent connected vehicles, quantum computing, domestic computing power, and industrial intelligent manufacturing. This expansion drove a 320% month-on-month surge in Token ARR for May. Coupled with the HK$2.35 billion fundraising strengthening its financial position, Xunce is establishing a pivotal point for a strong rebound.
Partnership with Lutech: A Solid Step for TokenOS Global Expansion, Full-Year Overseas Revenue Share Expected to Rise
Lutech is a leading Italian enterprise and a prominent European digital and AI service provider, boasting over 6,000 professionals and a business scale of approximately €1 billion. Its client network connects to numerous European companies. Leveraging an end-to-end service system covering business consulting, implementation, and governance, Lutech helps enterprises maximize operational efficiency and create comprehensive integrated solutions. This provides Xunce's TokenOS with a highly valuable and difficult-to-replicate channel for penetration into high-value European scenarios.
Under the cooperation agreement, Xunce provides real-time AI data infrastructure technology, while Lutech contributes industry knowledge, local delivery capabilities, and EU compliance expertise. The two parties will jointly develop AI transformation solutions adhering to EU data sovereignty principles, promoting the commercialization of solutions including the AI Token factory in the European market, and jointly building a cross-border innovation ecosystem centered on sovereign AI and secure data infrastructure.
This collaboration signifies the first systematic deployment of Xunce's TokenOS in Europe, further validating its applicability across different regions and regulatory systems. The proportion of overseas revenue for the full year is expected to increase significantly.
Placement Completed with Introduction of Global Top-Tier Investors, Shareholder Structure Further Optimized
On July 10th, following the successful completion of the share placement and convertible bond issuance, Xunce successfully attracted multiple global top-tier long-term institutional investors and sovereign funds. This not only bolstered the company's capital reserves but also significantly optimized the shareholder structure, enhancing its reputation and recognition in international capital markets. The ample capital reserves will provide solid financial support for the global deployment of TokenOS, in-depth expansion into the European market, and cutting-edge technology R&D.
According to the announcement, post-placement, the total number of issued H-shares increased from 267 million to 274 million, and the total number of issued shares increased from 323 million to 330 million. The bonds are expected to be listed on the Hong Kong Stock Exchange on or around July 13, 2026. The public float increased from 61.08% to 61.94%; if the bonds are fully converted, the public float would further rise to 63.35%.
The proceeds from this placement will be used to advance the construction of full-linkage AI infrastructure and cross-industry commercial deployment, marking the company's transition from the product development phase to the large-scale deployment phase of enterprise-grade AI infrastructure.
Currently, the company has initiated several industrial collaborations centered on TokenOS: cooperating with the Beijing International Big Data Exchange to advance data tokenization and assetization infrastructure; collaborating with domestic GPU manufacturers like MetaX, Tianshu Zhixin, and Biren Technology to build integrated "computing power + data" hardware-software solutions; deploying in-vehicle AI Agents with PATEO and Sima Technology; and partnering with the Shenzhen Data Exchange to promote data assetization applications in vertical industries such as finance, manufacturing, and urban management.
The use of the newly raised funds is concentrated on infrastructure layer construction and scalable commercial deployment, differing from the IPO proceeds which were primarily used for product R&D and optimization of existing solutions. This reflects a key strategic shift in the company's focus from product iteration to large-scale industrial implementation.
May ARR Surges 320% MoM, Multiple Top Brokers Bullish on Industrial Implementation Translating into Quantifiable Financial Metrics
Xunce's Token call ARR for May surged 320% month-on-month. Management had previously forecasted this figure would reach 20%-30% by year-end. This indicates a crucial shift in the business model from project-based to Token consumption-based billing, the latter offering stronger predictability and compounding effects. This provides a powerful growth engine and performance flexibility for the upcoming interim results. The Token payment model not only enhances the sustainability and predictability of revenue but also significantly improves the company's profit quality through structural advantages of high margins and high customer retention.
Based on the current rapid growth trend in Token call volume and the accelerated implementation of industrial collaborations, the company is poised to achieve better-than-expected breakthroughs in core metrics such as interim revenue and ARR, further solidifying market confidence in its business model transformation.
This business model has garnered optimism from several top brokers. Institutions including CITIC Securities, Huatai Securities, China Securities, Deutsche Bank, and Haitong International have either initiated coverage or upgraded ratings, with target prices reaching as high as HK$352. From a valuation perspective, once the proportion of Token-based payment revenue surpasses the 20% threshold, Xunce's valuation anchor is expected to shift from an "AI solutions provider" to an "AI infrastructure platform."
Final Thoughts
The recent stock price correction reflects market skepticism about the "implementation capability" of AI concept stocks. However, Xunce has provided a powerful response with its series of industrial implementation achievements—taking a solid step overseas with Lutech, completing the placement and convertible bond transaction, and achieving a 320% MoM ARR growth in May. A global AI real-time data infrastructure network centered on TokenOS is taking shape. For Xunce, which remains at a relatively low valuation level, the density and speed of industrial implementation may well be the most effective form of "share buyback."
Comments