xFusion's RMB 8 Billion ChiNext Filing Clears Listing Review

By Olivia Hart

What has the exchange approved?

The Shenzhen Stock Exchange’s listing committee cleared xFusion Digital Technologies’ application to raise RMB 8 billion in a ChiNext IPO on November 12, 2026. It found that the AI server maker met issuance, listing and disclosure requirements.

The decision leaves registration unfinished. The exchange’s project record shows acceptance on May 22, 2026, inquiries beginning June 4 and no registration result.

The latest prospectus proposes 97.8 million to 220.1 million new A shares, representing 10% to 20% of post-issue capital. Existing shareholders would sell none. The prospectus leaves the price, offering timetable and listing date unset, and names CITIC Securities as sponsor and lead underwriter.

The exchange’s record still provides no IPO price or date. The committee has cleared the filing, not the offering.

What would RMB 8 billion finance?

The proposed raise would allocate the RMB 8 billion as follows:

• RMB 4.08 billion for next-generation computing-infrastructure research and industrialization.
• RMB 2.03 billion for a smart manufacturing park and research center.
• RMB 890 million for intelligent-computing, AI and power-architecture research.
• RMB 1 billion for working capital.

The manufacturing allocation follows a change in production. Company filings say xFusion mainly used contract manufacturers from 2023 through 2025 before adding its own production lines in 2026.

xFusion sells AI and general-purpose data-center servers, liquid-cooled rack systems and supernodes. Its supernodes combine multiple AI accelerators and servers through high-speed links for training and inference. The company also supplies operating systems and AI deployment and tuning services.

The company’s second-round inquiry response traces the business to Huawei’s 2021 divestment of its x86 server operation. Henan Chaojuneng acquired xFusion, and Henan’s provincial state-owned assets regulator is the actual controller. The proposed raise therefore ties a larger manufacturing footprint to a sizable external financing requirement.

Can rapid growth produce durable margins and cash?

Company filings report AI-server revenue of RMB 6.278 billion in 2023, RMB 22.505 billion in 2024 and RMB 29.629 billion in 2025. The segment recorded RMB 19.852 billion in the first half of 2026.

Total revenue rose from RMB 25.092 billion in 2023 to RMB 58.246 billion in 2025 and reached RMB 37.286 billion in the first half of 2026. Net profit for the first half of 2026 was RMB 2.108 billion, compared with RMB 1.03 billion for all of 2025.

IDC, as cited in the prospectus, puts xFusion’s 2025 China server-market share at 14.2%, ranking second by shipments. The prospectus also reports the leading share of China’s standard liquid-cooled server market in each year from 2022 through 2025.

Company filings show main-business gross margin falling from 14.27% in 2023 to 8.58% in 2025. It rebounded to 15.49% in the first half of 2026. Internet customers increased from 26.19% of main-business revenue in 2023 to 67.27% in the first half of 2026.

Because the rebound covers six months while the earlier figures cover full years, it does not establish a durable annual margin. In its second-round response, xFusion attributed the earlier decline to its shift toward lower-margin customers and said the rebound reflected “computing demand, pricing power and supply-chain cost control.” The company also cautioned that further internet-customer growth and uncertain component costs could pressure margins again.

Company filings show operating cash flow was negative in every reported period. Outflows reached RMB 6.568 billion in 2023, RMB 2.526 billion in 2024 and RMB 461.88 million in 2025, before widening to RMB 15.685 billion in the first half of 2026.

xFusion attributes the outflows to inventory expansion and “a mismatch between short supplier-payment terms and longer collections from some customers.” The RMB 15.685 billion six-month outflow exceeded the entire proposed RMB 8 billion raise.

The five largest customers generated 50.81% of sales in the first half of 2026, while the five largest production-material suppliers represented 64.92% of procurement. Modules, CPUs, GPUs, memory and storage accounted for 88.82% of production-material purchases, leaving server economics sensitive to component availability and prices. Rapid sales growth has not yet translated into durable margins or positive operating cash flow.

What must happen before the IPO closes?

The exchange said the cash-flow, margin and concentration issues formed the substance of the committee’s review. It asked xFusion to explain margin trends and whether operating growth was sustainable given computing demand, customer capital expenditure, technological strength, operating cash flow and customer and supplier concentration. It also asked whether related risks were adequately disclosed.

The committee listed no further matters requiring implementation. Registration and pricing nevertheless remain ahead because committee clearance does not complete the exchange’s registration process. The filings frame the operating test: whether xFusion can convert rapid AI-server growth into durable margins and positive operating cash flow while funding denser liquid-cooled systems and supernodes.