xFusion's RMB 8B ChiNext IPO Cleared, But Registration Still Pending

The Shenzhen Stock Exchange's listing committee cleared xFusion Digital Technologies' ChiNext IPO application on November 12, 2026, approving an offering that seeks RMB 8 billion — but the deal isn't done yet. Registration remains unfinished, and no price, timetable or listing date exists. The decision gives Huawei's former x86 server unit a green light on disclosure and issuance requirements while leaving the hardest parts of a public offering still ahead.

The scale of the raise explains why this matters beyond one company. China's AI infrastructure buildout has turned server makers into capital-hungry businesses, and xFusion's own filings show operating cash outflows in the first half of 2026 that exceeded the entire proposed raise. That gap between growth and cash generation is the question investors will have to price.

What exactly did the exchange approve?

The committee found that xFusion met the issuance, listing and disclosure requirements for ChiNext. That's a meaningful hurdle, but the exchange's project record shows how much process remains. The application was accepted on May 22, 2026, inquiries started June 4, and there is still no registration result.

The mechanics of the offering, from the latest prospectus:

• Between 97.8 million and 220.1 million new A shares, or 10% to 20% of post-issue capital
• No shares sold by existing shareholders
• CITIC Securities as sponsor and lead underwriter
• Price, offering timetable and listing date all unset

The takeaway: clearing the committee is a verdict on disclosure quality, not a launch. Registration and pricing still stand between xFusion and the market.

Where does the RMB 8 billion go?

The prospectus breaks the raise into four buckets:

• 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 tracks a real shift in how the company builds its hardware. xFusion mainly used contract manufacturers from 2023 through 2025, then added its own production lines in 2026. Moving into owned capacity is expensive, and this raise helps pay for it.

In plain terms: most of the money goes toward building and designing more computing infrastructure, with a billion yuan of cushion for daily operations.

How did xFusion get here?

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. So xFusion is a spinout with state backing, not a startup.

Its product line covers AI and general-purpose data-center servers, liquid-cooled rack systems, and supernodes — systems that combine multiple AI accelerators and servers through high-speed links for training and inference. It also sells operating systems plus AI deployment and tuning services.

The revenue numbers show what the AI boom looks like from the server side:

• AI-server revenue: RMB 6.278 billion in 2023, RMB 22.505 billion in 2024, RMB 29.629 billion in 2025, and RMB 19.852 billion in the first half of 2026
• Total revenue: RMB 25.092 billion in 2023, rising to RMB 58.246 billion in 2025, with RMB 37.286 billion in the first half of 2026
• Net profit: RMB 2.108 billion in the first half of 2026, versus RMB 1.03 billion for all of 2025

Citing IDC, the prospectus reports xFusion's China server-market share reached 14.2% in 2025, ranking second by shipments. It also claims the leading share of China's standard liquid-cooled server market in each year from 2022 through 2025.

The takeaway: this is now one of China's two biggest server vendors by shipments, growing AI revenue nearly fivefold in two years.

Why are the margins the committee's sticking point?

The numbers move in ways that demand explanation. Main-business gross margin fell from 14.27% in 2023 to 8.58% in 2025, then rebounded to 15.49% in the first half of 2026. A swing that wide needs a story, and the company has one.

xFusion attributes the earlier decline to a shift in who buys its servers. Internet customers grew from 26.19% of main-business revenue in 2023 to 67.27% in the first half of 2026 — and internet customers carry lower margins. The company credits the rebound to computing demand, pricing power and supply-chain cost control. It also warns that further internet-customer growth and uncertain component costs could pressure margins again.

The concentration cuts both ways:

• The five largest customers generated 50.81% of sales in the first half of 2026
• 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

That last figure is the structural risk. When nearly nine-tenths of your material purchases are chips and memory, your economics depend on component availability and prices you don't control.

The takeaway: xFusion sells a lot of hardware to a few buyers, built from parts it buys from a few suppliers — and its margins show it.

What about the cash flow?

Operating cash flow was negative in every reported period. Outflows ran 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 two things: inventory expansion, and a mismatch between short supplier-payment terms and longer collections from some customers. In other words, it pays its suppliers faster than some customers pay it, and it's been stocking up on parts and finished goods.

The first-half 2026 outflow is the number that reframes the whole IPO. RMB 15.685 billion out the door in six months, against an RMB 8 billion raise, means the offering isn't just about expansion — it's a substantial financing requirement for a business that burns cash while it grows.

The takeaway: profitability arrived, but cash keeps flowing out, and the raise doesn't cover a repeat of the first half.

What did the committee actually ask?

Those issues formed the substance of the review. The committee asked xFusion to explain its 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. It also asked whether the related risks were adequately disclosed.

Notably, the committee listed no further matters requiring implementation. It accepted the answers and cleared the application.

What happens next?

Registration and pricing remain ahead, and until registration completes, the offering stays incomplete. The filings frame the central test plainly: whether xFusion can convert rapid AI-server growth into durable margins and positive operating cash flow while funding denser liquid-cooled systems and supernodes. That question won't be answered by a listing committee — the market will answer it after the shares trade.