Recent share price adjustments for Xunce (03317) stem from market misconceptions that equate the company with generic large language model firms, overlooking the distinct nature of their respective ecosystems. CICC, in a recent report, expressed optimism regarding Xunce's strategic positioning with its TokenOS operating system in the expansive enterprise AI market.
The firm has consequently raised its target price for Xunce to HK$205 and upgraded its rating from "Add" to "Buy". This new target implies an approximate 50% upside from the closing price of HK$136.8 on June 17 and represents a 28% increase from the previous target of HK$160.
CICC projects that Xunce will achieve a net profit of RMB 176 million in 2026, marking a formal turnaround to profitability. Further growth is anticipated, with net profits forecast to rise to RMB 720 million in 2027 and RMB 1.318 billion in 2028. Revenue for the years 2026 to 2028 is estimated at RMB 2.369 billion, RMB 3.5 billion, and RMB 4.5 billion, respectively.
Applying a 2026 price-to-sales (P/S) multiple of 24.6x, this valuation corresponds to a market capitalization of approximately HK$66.2 billion, indicating significant potential upside from the current share price.
Enterprise AI's Next Frontier
The report posits that the AI industry is undergoing a pivotal shift from demonstrating "general capabilities" to "deepening vertical applications." Knowledge workers are identified as the next critical battleground for AI implementation. Professionals such as financial analysts, lawyers, and consultants face exponentially growing daily information loads, yet their traditional toolkits remain largely confined to "information retrieval."
Xunce, with its extensive experience in specialized verticals, is seen as holding a first-mover advantage and establishing a robust ecosystem barrier. This differentiates it from general-purpose large model companies. Although its billing model is similarly token-based, its ecosystem moat is considered deeper.
ARPU Doubles as Model Evolves
The core driver of the company's growth is transitioning from expanding its customer base to deepening value per client. While the total customer count has remained relatively stable (230 in 2025 versus 232 in 2024), the average revenue per user (ARPU) has doubled year-over-year to RMB 5.59 million.
The recent launch of the TokenOS operating system and a token-based billing model positions Xunce as a core supplier of "data tokens," aiming to connect diverse computing infrastructures and model providers. This strategy is expected to grant the company pricing power during the wave of AI commercialization, creating a business model based on "value-based pricing."
TokenOS: A Structural Innovation
The report emphasizes that TokenOS is not merely a data integration tool but a "data flow operating system" designed for high-frequency decision-making scenarios in sectors like finance and energy. It achieves this by converting multi-source, heterogeneous data into standardized token data units in real-time, enabling millisecond-level data governance and AI-ready output.
The successful deployment of enterprise AI relies heavily on a company's specific workflows and data infrastructure. This is precisely where Xunce has built its ecosystem barrier, setting it apart from traditional data service providers and generic AI platform vendors.