xFusion Clears Review for 8 Billion-Yuan IPO, ChiNext's Largest This Year

Shenzhen's ChiNext listing committee approved xFusion's initial public offering on Nov. 12, clearing the former Huawei server unit to raise 8 billion yuan, about $1.1 billion. It is the largest planned raise among companies to face the ChiNext committee this year, according to Chinese financial press. The deal still requires registration with the China Securities Regulatory Commission before shares can be priced and listed.

The approval came 174 days after the Shenzhen Stock Exchange accepted the application on May 22. xFusion plans to sell between 97.8 million and 220 million new shares, with CITIC Securities as sponsor. Huawei spun off the x86 server business in 2021; the company is now based in Zhengzhou and controlled by the Henan provincial state-assets regulator, whose vehicle Henan Chaojuneng Technology holds 31.38%.

What do the numbers show?

The revenue curve is steep. Sales grew from 25.09 billion yuan in 2023 to 44.27 billion yuan in 2024 and 58.25 billion yuan in 2025, according to the prospectus figures reported by 21st Century Business Herald and 10jqka. First-half 2026 revenue reached 37.29 billion yuan, with net profit of 2.11 billion yuan.

Profitability tells a quieter story. Net profit was 0.51 billion yuan in 2023, 0.72 billion in 2024 and 1.03 billion in 2025 — a net margin below 2% last year on 58 billion yuan of sales. The company ships racks at industrial scale and keeps roughly two fen of every yuan.

The cash position is the harder question. Operating cash flow has been negative every year in the prospectus window: minus 6.57 billion yuan in 2023, minus 2.53 billion in 2024 and minus 0.46 billion in 2025. In the first half of 2026 it swung to minus 15.69 billion yuan, a single-half outflow larger than the three previous full years combined. Short-term borrowings rose from 1.56 billion yuan at the end of 2025 to 18.03 billion yuan. Growth, at this scale, is financed rather than earned.

Where does xFusion stand in the market?

Its share of China's server market rose to 14.2% in 2025 from 11.7% in 2022, making it the No. 2 vendor by shipments, according to IDC data cited in the prospectus. The company says it ranks No. 1 in sales of servers built with domestic components and in standard liquid-cooled servers.

The listing committee did not simply wave the file through. It asked the company to explain its gross margin trend, whether growth is sustainable as customers' capital spending changes, its cash flow, and its customer and supplier concentration. These are the questions a skeptical creditor would ask, addressed to a company whose working capital now depends on banks.

Where will the money go?

The use of proceeds is itemized:

• 4.08 billion yuan for next-generation computing infrastructure
• 2.03 billion yuan for a manufacturing park and R&D center
• 890 million yuan for AI, computing and power-architecture research
• 1 billion yuan for working capital

More than half the raise targets computing infrastructure, which fits a company whose fortunes ride on China's AI build-out. The 1 billion yuan of working capital, set against an 18 billion yuan short-term debt pile, is the line item that reads least like expansion and most like relief.

What happens next?

The CSRC registration is the remaining gate, and none of the arithmetic changes while it pends. xFusion arrives at the market as a state-controlled No. 2 with tripled revenue, single-digit margins and a cash engine running hard in reverse. Investors will now price the gap between those facts, and the AI spending cycle will decide who is right.