On September 28, XUNCE fell 5.29% in regular trading, trading at 100.8 HKD/share, with turnover of approximately 38.37 million HKD.
On the news front, the company convened an extraordinary general meeting on the same day to vote on three special resolutions, including a proposed investment of up to 12 billion yuan to build an AI inference and computing center through its wholly-owned subsidiary, and a syndicated loan facility of up to 10 billion yuan from financial institutions with a five-year term. The substantial capital expenditure plan coupled with high-leverage financing raised market concerns over funding pressure and balance sheet risk.
For context, XUNCE reported strong H1 results with revenue surging 389% year-over-year to 967 million yuan and adjusted net profit of 67 million yuan, achieving its first half-year profitability. Multiple investment banks recently initiated coverage with bullish ratings, including a 160 HKD target from J.P. Morgan and a 149 HKD target from Macquarie. Despite the positive fundamental backdrop, the scale of the proposed investment relative to the company's current revenue base appears to have prompted profit-taking and cautious repositioning ahead of the vote outcome.
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