In late October 2026, the Hong Kong IPO market saw a wave of listings — seven companies including Denglin Technology launched offerings simultaneously, with six being initial public offerings and one being a listing by introduction.

Notably, three of these seven companies come from the chip and semiconductor sector: Denglin Technology, Xinde Semiconductor, and Hongxin Yu. Multiple semiconductor companies competing on the same stage can certainly be interpreted as a recovery in industry financing enthusiasm, but the more important question is: is this a genuine reflection of industry prosperity, or simply a "rush" during a market window?

Among this batch of projects, Denglin Technology's identity is particularly special — it is the only issuer filing with a "-P" designation (pre-commercial company), and the third non-commercial company to list under Chapter 18C in the Hong Kong market, following Jitai Technology and Xizhi Technology.

The pricing challenge for non-commercial companies lies in the fact that, since they have not yet generated stable commercial revenue, their growth path carries significant uncertainty, and valuation has essentially lost the anchor of traditional financial metrics. With limited information available, how should the market analyze such a company? The answer may only come down to two most fundamental questions: whether its commercialization path is clear, and whether there are truly knowledgeable investors willing to lend their support.

KS Series Chip Ramp Drives Revenue Surge; Adjusted Net Profit Turns Positive in First Four Months of 2026

Denglin Technology was founded in late 2017, with a founding team composed of core members from Tuxin Chip. Relying on its self-developed GPU+ (Minsky™) architecture, the company integrates GPGPU programmable general-purpose computing units, AI tensor acceleration units, and high-bandwidth on-chip memory subsystems heterogeneously on a single chip, preserving GPGPU flexibility while enhancing AI workload processing capability.

In terms of financial performance, the company's revenue grew from RMB 30 million in 2023 to RMB 170 million in 2025, representing a compound growth rate of 147.6%; revenue in the first four months of 2026 alone reached RMB 200 million, already exceeding the full-year 2025 level. Profit quality improved simultaneously — the overall gross margin rose from 34.4% in 2023 to 49.2% in 2025, and further climbed to 50.9% in the first four months of 2026.

More notably, the company's adjusted net profit turned positive for the first time in the first four months of 2026, reaching RMB 20.58 million; additionally, based on current order conditions, the company has locked in approximately 1,400 wafers of core capacity with foundries, and full-year 2026 revenue is expected to break through the HK$250 million threshold — meaning Denglin Technology has become one of the few 18C companies likely to shed its "-P" designation in the near term.

The key to this leap lies in the company finding the "right" niche market. The third-generation flagship KS series, launched in the second half of 2025, saw volume ramp-up, with unit prices jumping from the early ten-thousand-yuan level to RMB 16,000 per chip, and the primary battlefield shifting from smart city security to enterprise private cloud.

From the data, the KS series contributed RMB 170 million in revenue in the first four months of 2026, accounting for 82.9% of the company's total revenue; enterprise private cloud scenarios accounted for 83.0% of GPGPU product revenue.

Ranked Third in the Industry but With Only 1.0% Market Share

However, looking at the broader picture, the other side of the story emerges. Based on 2025 revenue, Denglin Technology ranks third in China's enterprise AI GPGPU market, but its market share is only 1.0%. Ahead of it are two American semiconductor giants — the first-place player with RMB 980 million in revenue and approximately 83% share, and the second-place player with over 12% share; combined, the two occupy about 95% of this niche market. The fourth and fifth players after Denglin Technology hold shares of 0.9% and 0.8% respectively, with extremely limited gaps.

In other words, Denglin's "third place" is a nominal ranking achieved in a market highly concentrated among top players, and its absolute share and market influence are quite limited. From a more macro perspective, the company's China enterprise AI GPGPU market, placed within the broader China GPGPU enterprise AI market (2025 revenue of RMB 11.8 billion), represents only a tiny fraction of a fraction.

This "niche champion, overall small player" pattern directly explains why the company must find a specific track to achieve rapid revenue growth — and also means that the sustainability of its growth is highly dependent on whether this niche market can continue to expand and whether the company can maintain its current first-mover advantage.

The Double-Edged Sword of Private Cloud Business: Customer Concentration and High Turnover

The nature of the enterprise private cloud business determines two characteristics of the company's customer structure: high concentration and high turnover. In terms of concentration, the revenue share of the company's top five customers remained at extremely high levels throughout the track record period: 98.4% in 2023, 85.1% in 2024, 83.0% in 2025, and rebounding to 90.4% in the first four months of 2026; the largest single customer's revenue share during the same periods was 37.9%, 25.7%, 29.4%, and 38.0% respectively.

In the first four months of 2026, the top five customers together contributed RMB 180 million in revenue, with the largest customer alone contributing RMB 76.1 million. In terms of turnover, the company's customer list changes quite frequently — the largest customer in 2024 dropped out of the top five list entirely by 2025, and the first four months of 2026 saw a re-concentration of the customer structure.

This is driven by the business model: private cloud projects are mostly "project-based" procurements, and customers may not necessarily make repeat purchases after completing a one-time deployment, so revenue sources naturally lack stability. This structure of "customers either don't come, or one customer dominates" makes the company's revenue forecasting far more difficult than for conventional enterprises.

R&D Investment Declining in Absolute Terms; Persistent Large Cash Outflows

For a chip company still in a technology breakthrough period, changes in R&D investment deserve closer scrutiny. In absolute amounts, the company's R&D expenses are declining year by year: RMB 260 million in 2023, RMB 250 million in 2024, RMB 240 million in 2025, and RMB 64.86 million in the first four months of 2026, lower than RMB 77.69 million in the same period of 2025.

The R&D expense ratio has dropped from as high as 924.8% in 2023 to 32.4% in the first four months of 2026, mainly due to dilution from rapid revenue growth — but at a time when the company claims to be advancing the Minsky™ IV architecture and competing for the next generation of computing power, the contraction in absolute R&D investment is still a signal worth noting.

The problem of insufficient self-sustaining capability is particularly evident in cash flow. During the track record period, the company's operating cash flow was negative for three consecutive years, with a further outflow of RMB 150 million in the first four months of 2026. Meanwhile, the company raised substantial funds through financing activities — net cash inflow from financing activities was RMB 670 million in 2025, which brought the period-end cash balance from RMB 80 million in 2024 to RMB 440 million in 2025.

Comparison With the Previous Two Non-Commercial Companies: Notably Weaker Cornerstone Support

Returning to the judgment framework proposed at the outset — what should we look at for non-commercial companies? First, the commercialization path; second, whether there are "knowledgeable" investors providing support. Cornerstone investors are the direct manifestation of the latter.

The cornerstone investors in this offering account for approximately 40.7%, composed of related parties of existing shareholders (Zhongxin Venture Capital and Integrated Circuit Growth Fund), a wholly-owned subsidiary of Tongfu Microelectronics, and Suzhou state-owned capital. The participation of veteran shareholders, industry peers, and state-owned capital does demonstrate that the company has gained recognition at the local and industry chain levels, which should not be overlooked.

However, compared with the previous two 18C non-commercial companies, the cornerstone structure gap is significant. Jitai Technology operates in "AI + pharmaceuticals," one of the crossover fields currently attracting the highest capital attention, while Xizhi Technology represents the entirely new direction of optoelectronic computing and is already a leader in its technology path; both introduced long-term funds with greater industry recognition as cornerstones. From this perspective, although Denglin Technology's cornerstone lineup is mainly composed of state-owned capital and industry players, its endorsement strength from long-term institutions and international capital is notably weaker compared with the previous two projects.

Conclusion: A "Pre-Commercial" Growth Stock and a Path Still Needing Validation

Overall, Denglin Technology embodies both highlights and uncertainties. The highlights include: revenue growing rapidly for consecutive periods, with first-four-months 2026 revenue already exceeding full-year 2025; gross margin standing at 50.9%; adjusted net profit turning positive for the first time; and a high probability of shedding the "-P" designation in 2026. What warrants caution includes: at a position of third in the industry with only 1.0% market share, the company's high growth is built on a window obtained by "finding the right track"; the private cloud business has highly concentrated customers with high turnover, raising questions about revenue sustainability; absolute R&D investment is declining year by year; and operating cash flow has been negative for three consecutive years.

The company's commercialization path has taken shape, yet it is far from reaching a stage where it can be linearly extrapolated. For this type of non-commercial company, valuation is difficult to anchor solely on static financial data — it is essentially a vote of confidence from the market in its long-term growth potential. Whether Denglin Technology can convince the market that its growth is not merely an opportunistic window grab but a path that can be sustained remains to be seen.