Real-time data infrastructure firm XUNCE made its debut on the Hong Kong Stock Exchange main board on December 30, 2025, but its initial performance was notably lackluster. During the grey market trading session the day before listing, XUNCE's share price plunged over 35% below its issue price, marking it as the worst performer among the six new listings that day. Although the stock later recovered somewhat, by the January 5, 2026 market close, it was a mere 0.25% above the issue price. This weak stock performance not only reflects market skepticism about the company's valuation but also exposes deeper operational and capital risks. The significant gap between performance expectations and reality, deteriorating profitability metrics, and customer attrition have cast a shadow over the company's future prospects, posing substantial challenges to reversing market sentiment and overcoming operational difficulties.
XUNCE, a Chinese provider of real-time data infrastructure and analytics solutions, offers comprehensive real-time IT solutions covering data infrastructure and data analysis to enterprises across various industries. Since 2017, the company has completed seven funding rounds totaling RMB 2.1 billion, attracting investments from prominent institutions such as Tencent, Goldman Sachs, KKR, and CICC. In May 2021, an article on XUNCE's official WeChat account related to its Series C funding explicitly stated the company planned to achieve profitability that year and initiate an IPO process. However, actual operating data reveals a starkly different picture: the company reported revenue of RMB 120 million for 2021, but incurred a net loss of RMB 119 million, resulting in a net loss ratio of 99.1%, completely missing its profitability target and recording a substantial loss.
Typically, a management team with robust planning capabilities can form a reasonably accurate forecast for the full year's performance by mid-year. The significant discrepancy between the profit forecast XUNCE publicly communicated via its WeChat account in May 2021 and its actual annual results raises questions about the management's ability to accurately predict business trends and adapt to changing market conditions. It is important to note that this WeChat article was published after the completion of the Series C funding round. Given the funding timeline, it is highly probable that this expectation of "achieving profitability within the year" was communicated to potential investors during the preliminary stages of both the Series C and subsequent C+ funding rounds. The company used this profitability projection as a key selling point to attract institutional participation at critical junctures in its fundraising efforts. The substantial gap between this communicated expectation and the eventual outcome warrants market scrutiny regarding the prudence of this information dissemination.
The significant variance between the 2021 profit forecast and actual performance is not an isolated incident. Subsequent years saw continued pressure on profitability, further testing the market's confidence in the management's overall operational and strategic planning capabilities. On the revenue front, the company's income grew from RMB 290 million in 2022 to RMB 630 million in 2024. However, this growth momentum halted abruptly in 2025, with first-half revenue dropping to just RMB 200 million, a nearly 30% year-on-year decline. Profitability metrics deteriorated more sharply: while gross margin remained at a relatively high level above 76% from 2022 to 2024, it fell to 66.7% in the first half of 2025, further declined to 58.5% for the first three quarters, and plummeted to a mere 12% for the single month of October, indicating a severe contraction in profitability. The company attributed the gross margin decline to a strategic decision to meet increased customization demands from key clients and solidify long-term partnerships during a period of market uncertainty. The net loss ratio showed a persistent widening trend, recorded at 33.5%, 12.0%, and 15.5% for 2022, 2023, and 2024 respectively. This ratio escalated to 54.6% in the first half of 2025, and the company anticipates its full-year net loss for 2025 will continue to increase, primarily due to ongoing investments in technology R&D and provisions for expected credit losses on trade receivables. Notably, despite this operational pressure, the company's valuation surged. Its post-money valuation after the final funding round in November 2023 was RMB 6.2 billion, which rose to HKD 15.5 billion at the IPO. This significant valuation increase appears缺乏 sufficient fundamental performance support, raising questions about its合理性.
Client resources, a core competitive advantage, have recently exhibited multiple risk factors. While the total number of paying clients increased from 182 in 2022 to 232 in 2024, this figure plummeted to 121 in the first half of 2025 (compared to 169 in H1 2024). Within this, paying clients from the asset management industry shrunk from 140 in H1 2024 to 94 in H1 2025. Concurrently, client willingness to pay showed volatility. The overall Average Revenue Per User (ARPU) decreased from RMB 1.67 million in H1 2024 to RMB 1.64 million in H1 2025. Although ARPU from asset management clients saw a slight increase from RMB 960,000 to RMB 1 million, this growth was considered underwhelming against the backdrop of a market recovery. More significantly, ARPU from the diversified industries segment fell sharply from RMB 5.10 million to RMB 3.86 million, indicating a notable weakening of payment capacity. Furthermore, the net revenue retention rate experienced a steep decline, dropping from 98% in 2023 to 56% in 2024, and further down to 36% in H1 2025, highlighting growing concerns over insufficient client stickiness. It is noteworthy that the company has shifted more focus towards expanding into diversified industries. Revenue from this segment grew from RMB 230 million to RMB 430 million in the first three quarters of 2025, becoming a key driver of revenue growth. However, this expansion came at the cost of significantly compressed profit margins. The company required increased specialized investments in hardware integration and AI data analytics software platforms for multiple projects in diversified industries, directly contributing to the drastic drop in the overall gross margin to just 12% in October 2025. This strategy essentially trades profitability for business expansion, and the sustainability of this model remains questionable.
Beyond core operational and client-related risks, the change of sponsor during XUNCE's IPO process and the structure of its cornerstone investments also present noteworthy concerns. Regarding sponsors, entities affiliated with Goldman Sachs and CICC are both shareholders of the company, a common practice for securing sponsorship roles in HK IPOs. CICC acted as the sole sponsor when the company submitted its listing applications in March and September 2024. However, when the application was filed for the third time in September 2025, the sole sponsor was changed to Guotai Haitong. Notably, key milestones, including receiving feedback from the Securities and Futures Commission in March 2024 and obtaining SFC filing approval in January 2025, all occurred during the validity periods of the first two applications, presumably led by CICC. The reasons behind CICC's withdrawal after these significant breakthroughs in the listing process remain unclear. On the cornerstone investment front, nine cornerstone investors committed a total of HKD 310 million, accounting for 28.5% of the base offering size. Five of these institutions additionally invested HKD 210 million through the international placement. However, the roster of participating investors notably lacks influential market-leading institutions. Furthermore, the largest cornerstone investor, China TV Bridge, whose primary business involves television advertising, creative content production, and digital marketing, has extremely low business synergy with XUNCE. Despite its own market capitalization being only approximately HKD 900 million, it invested HKD 150 million (representing 14.3% of the base offering size), raising questions about the rationale behind its substantial investment.
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