Huawei's spun-off server giant sprints toward an $8 billion IPO: net profit of $2.1 billion in half a year, yet net cash outflow of $15.7 billion.

Beating AI News, November 12 - XFusion passed the listing committee review of the Shenzhen Stock Exchange ChiNext IPO and plans to raise RMB 8 billion, setting a new high for the proposed fundraising scale of companies reviewed on ChiNext this year.

XFusion was formerly Huawei's x86 server business, spun off from Huawei in 2021, and is currently effectively controlled by the Henan Provincial State-owned Assets Supervision and Administration Commission. According to IDC data, in 2025 XFusion ranked second in China's server market by shipments, with a market share of 14.2%.

The AI boom also drove its performance. In 2025, the company's revenue reached RMB 58.246 billion. In the first half of 2026, revenue was RMB 37.286 billion, of which AI servers contributed about RMB 19.852 billion, accounting for 53.29% of main business revenue.

In the first half of 2026, XFusion's net profit reached RMB 2.108 billion, more than twice that of the full previous year. But in the same period, net cash flow from operating activities was an outflow of RMB 15.685 billion, and short-term borrowings surged from RMB 1.563 billion at the end of last year to RMB 18.026 billion.

The company explained that growing demand for AI servers requires advance procurement of large quantities of chips and components, but suppliers demand relatively fast payment while customer collections are relatively slow. A large amount of capital was therefore tied up in inventory and accounts receivable. As of the end of June, the company's inventory balance had reached RMB 35.662 billion.

During its review, the Shenzhen Stock Exchange also specifically asked whether the company's performance growth could be sustained, as well as about risks related to cash flow and customer and supplier concentration. Currently, the IPO has only passed the listing committee review and has not yet completed registration and issuance.