China’s xFusion Preps IPO as State-Backed AI Server Champ with $5.7B 2024 Sales

xFusion’s move to engage Citic Securities for IPO tutoring signals a critical inflection point in China’s AI infrastructure build-out. The intent is not mere cosmetic: “tutoring” spans executive readiness and regulatory compliance, suggesting xFusion is strategically positioning itself to satisfy both domestic policy imperatives and investor expectations. The timeline (Jan to Apr/May 2026) suggests a rapid push toward filing, if not listing, likely via innovative mechanisms such as reverse listings which are increasingly used to accelerate approval.

On financials, the reported RMB 40-43.5 billion in revenue for 2024 underscores strong growth, especially given AI server demand. The RMB 43.5 billion figure (≈ USD 6.1 billion) from secondary sources aligns with official data, supporting confidence in the public numbers. Being ranked second domestically suggests significant competitive pressure, especially from established incumbents like Inspur.

Shareholding structure reinforces xFusion’s strategic alignment with China’s state industrial policy. Major shareholders include China Mobile Capital (≈15.14%) and China Telecom Group Investment, in addition to substantial Henan SOE control. The back-end ownership suggests that while there may be commercial discipline, state interests likely play a key role in strategic decision-making, including technology sourcing, dual-use concerns, export policy, and alignment with broader AI/semiconductor goals.

The IPO’s timing embodies macro-strategic dynamics: U.S. export controls, Beijing’s self-reliance push, and red-hot AI stock performance. Recent IPOs in AI chipmakers produced abnormal first-day gains and are helping drive indices (e.g. CSI AI Index up ~67% in 2025). However, such valuation exuberance carries risk: sustainability of earnings, margins, supply chain exposure, and whether these firms can meet expectations is uncertain. xFusion will be under scrutiny on these fronts.

Potential listing pathways are important to assess. LightReading reported that xFusion is considering a reverse listing on ChiNext, possibly via another Henan SOE, to avoid longer CSRC approval timelines. If such a route is chosen, it may impact regulatory risk, investor perception, and ultimate valuation.

Strategic implications for investors and stakeholders include:
• Potential high rewards if xFusion capitalises on growth in AI server demand, especially domestically and in emerging markets.
• Risks tied to reliance on government contracting, exposure to U.S. export and sanction regimes, and supply of advanced chips.
• Competitive pressures from other AI and chip firms, both in China and globally.
• Valuation expectations may be heightened by recent IPO windfalls linked to AI stocks; overvaluation could cause post-IPO corrections.

Open questions that merit further attention:
• What specific metrics—profitability, R&D margins, supply chain resilience—are embedded in the IPO filings?
• What will be the IPO structure: full IPO, reverse merger, or listing via backdoor chapters?
• How will investor governance and disclosure be handled, especially given state shareholder dominance?
• How will export control and component sourcing risks (e.g. reliance on non-domestic chip designs or architectures) be mitigated?