CITIC Securities Initiates Coverage of Xunce (03317.HK): Target Price 160 HKD, China's Palantir Reaches Inflection Point

Hong Kong-listed AI data infrastructure core target Xunce (03317.HK) recently attracted the attention of authoritative institutions. CITIC Securities released an in-depth research report covering the stock for the first time, giving a “Buy” rating and setting a target price of HKD 160, representing a 13% upside from the current HKD 140 share price. As a leading domestic real-time data infrastructure provider, the company benefits deeply from the dual dividends of AI implementation and data element policies, leveraging its strong barriers in asset management and diversified expansion capabilities. According to CITIC Securities’ estimates, it is expected to break even by 2026 and officially enter a phase of scaled profitability.

The support for Xunce’s institutional attention lies in its solid core competitiveness, which hinges on precisely positioning itself in the key data governance segments of the AI era. After a decade of industry cultivation, the company has built a modular and platform-based comprehensive product system. By the first half of 2025, it had successfully developed 332 functional modules, forming a seven-core product matrix covering data infrastructure and industry solutions. In the high-barrier asset management industry, the company holds a market share of 11.6%, ranking first in the industry; it has also successfully expanded beyond a single track into high-value fields such as financial services, urban management, and telecommunications. Disclosure shows that in 2024, non-asset management revenue accounted for 61.3%, establishing a stable revenue structure of “asset management as the foundation, multi-industry development,” significantly enhancing risk resistance and growth resilience.

In addition to its own competitive advantages, industry-level multiple dividends also strongly support Xunce’s growth. China’s real-time data infrastructure and analytics market are in a low-position explosive phase. Coupled with the continued promotion of data asset inclusion policies and the deepening of “AI +” initiatives, enterprises’ demand for real-time data processing and governance is accelerating. Especially with the push of AI tools like OpenClaw, token consumption is growing exponentially. Data governance, as the core foundation for AI deployment, remains highly active, providing strong momentum for the company’s business growth.

Financially, the synergy of industry dividends and the company’s advantages has driven it into a high-growth trajectory, with a clear profit turning point. CITIC Securities estimates that from 2025 to 2027, the company’s revenue will reach HKD 1.28 billion, HKD 2.33 billion, and HKD 3.45 billion, respectively, with year-over-year growth rates of 103%, 82%, and 48%, maintaining rapid growth. Gross profit margins are expected to stay high at 71.6%-75%, with profitability outstanding. Net profit margin is projected to turn positive from -10% in 2025, rising to 12% in 2026 and further to 24% in 2027, with net profits jumping to HKD 272 million, HKD 841 million. The growth drivers are mainly the dual engines of increasing paying customers and ARPU. By 2024, the company had 232 paying clients, with ARPU rising to HKD 2.72 million per customer. As product modules continue to iterate and high-value application scenarios are implemented, the growth potential of ARPU in non-asset management industries is particularly promising.

Based on the company’s growth potential and industry position, CITIC Securities provides a clear valuation judgment and target price. Referencing international industry leaders like Palantir and Snowflake, as well as domestic comparable companies such as FanSi Intelligent and DiPu Technology, CITIC Securities assigns a 2026 price-to-sales (PS) multiple of 20x, corresponding to a target market capitalization of HKD 51.7 billion and a target price of HKD 160. From a business model perspective, Xunce is viewed by the market as the “Chinese version of Palantir.” Its modular product design, cross-industry reusability, and years of accumulated industry know-how align closely with Palantir’s AIP platform, with potential to replicate its success in enterprise AI data governance and achieve long-term growth.

It is noteworthy that continuous investment in R&D and market expansion further solidifies the company’s growth foundation and supports institutional optimism. From 2022 to 2024, R&D expenditure increased steadily from HKD 259 million to HKD 450 million, focusing on cutting-edge intelligent technologies such as NLP and machine learning. Through AI-assisted R&D and project delivery, the development cycle of single modules has been shortened by 30%, and project initialization time reduced from 7 days to 1 day, continuously improving efficiency. In terms of customer resources, the company has successfully covered major state-owned telecom operators and other industry benchmark clients, with brand influence steadily expanding. Overseas markets have also seen initial breakthroughs, with data showing that in 2024, revenue from Hong Kong accounted for 5.9%. Future expansion into markets like Singapore and Japan is expected to open new growth avenues.

Overall, CITIC Securities’ first coverage of Xunce reflects recognition of the company’s intrinsic value and highlights the high attention from institutions to the data infrastructure sector. Under the core trend of AI industry evolution from model competition to data competition, Xunce, with its “industry leader + growth inflection point + policy dividends” triple advantages, is poised to become a key stock in the Hong Kong AI sector. Its subsequent business development and financial performance are worth continuous investor monitoring.

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