The Shenzhen Stock Exchange’s listing committee cleared xFusion Digital Technologies’ ChiNext IPO application on November 12, 2026, finding that the AI server maker met issuance, listing and disclosure requirements. The proposed offering targets RMB 8 billion for computing infrastructure, manufacturing, research and working capital.
The decision does not complete the IPO. The exchange’s project record shows acceptance on May 22, 2026, inquiries from June 4 and no registration result. The latest prospectus proposes between 97.8 million and 220.1 million new A shares, representing 10% to 20% of post-issue capital, with existing shareholders selling none. The price, offering timetable and listing date remain unset; CITIC Securities is the sponsor and lead underwriter.
Of the RMB 8 billion sought, RMB 4.08 billion would fund next-generation computing-infrastructure research and industrialization, RMB 2.03 billion a smart manufacturing park and research center, RMB 890 million intelligent-computing, AI and power-architecture research, and RMB 1 billion working capital. The manufacturing allocation follows a production shift: xFusion mainly used contract manufacturers from 2023 through 2025 before adding its own lines in 2026.
AI Server Growth and Market Position
xFusion sells AI and general-purpose data-center servers, liquid-cooled rack systems and supernodes, which combine multiple AI accelerators and servers through high-speed links for training and inference. It 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 the company, and Henan’s provincial state-owned assets regulator is the actual controller.
Company filings report AI-server revenue rising from RMB 6.278 billion in 2023 to RMB 22.505 billion in 2024 and RMB 29.629 billion in 2025, with RMB 19.852 billion recorded in the first half of 2026. Total revenue increased 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 that half was RMB 2.108 billion, compared with RMB 1.03 billion for all of 2025.
Citing IDC, the prospectus reports that xFusion’s China server-market share reached 14.2% in 2025, ranking second by shipments. It also reports the leading share of China’s standard liquid-cooled server market in each year from 2022 through 2025.
Margins, Cash Flow and Review Questions
Main-business gross margin fell from 14.27% in 2023 to 8.58% in 2025 before rebounding 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. xFusion attributes the earlier margin decline to that shift toward lower-margin customers and the rebound to computing demand, pricing power and supply-chain cost control, while cautioning that further internet-customer growth and uncertain component costs could pressure margins again.
Operating cash flow was negative in every reported period. Outflows were RMB 6.568 billion in 2023, RMB 2.526 billion in 2024 and RMB 461.88 million in 2025, before reaching RMB 15.685 billion in the first half of 2026. xFusion ties the outflows to inventory expansion and a mismatch between short supplier-payment terms and longer collections from some customers. That six-month outflow exceeded the entire proposed raise, connecting the offering’s expansion plans with a substantial financing requirement.
The customer and supplier base is also concentrated. 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.
Those issues formed the substance of the committee’s review. It asked xFusion to explain margin trends and whether operating growth is sustainable in light of computing demand, customer capital expenditure, technological strength, operating cash flow and customer and supplier concentration, as well as whether the related risks were adequately disclosed. The committee listed no further matters requiring implementation.
Registration and pricing remain ahead. The filings frame the offering’s central 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.
