Unigroup Goes Public in Hong Kong: Breakthrough and Game in the A+H Chessboard

Unisplendour Corporation Limited ($UNIS(000938.SZ)), which listed on the Shenzhen Stock Exchange in 1999, has submitted an application to the Hong Kong Stock Exchange for a dual primary listing (A+H).

This ICT giant, which underwent a phoenix-like rebirth after a debt crisis, aims to achieve three strategic goals through its Hong Kong listing: alleviating financial pressure, accelerating global expansion, and securing a position in the new AI computing power race. However, against the backdrop of three consecutive years of declining gross margins and intensifying industry competition, is this capital expedition a breakthrough strategy or a last resort?

Capital Choices After Rebirth

Unisplendour's Hong Kong listing plan comes just three years after its parent company, Tsinghua Unigroup, completed a judicial restructuring. The 2022 restructuring, involving RMB 200 billion in debt, completely reshaped Unisplendour's ownership structure—Tsinghua-affiliated entities exited, and Zhiguang Xin, led by the Wise Road-Capital consortium, became the controlling shareholder, ushering in an era with no actual controller. Post-restructuring, Unisplendour must simultaneously manage a debt burden of around RMB 70 billion while maintaining H3C's leading position in the ICT sector, keeping its funding chain under constant strain.

Its current ratio dropped from 1.5x at the end of 2022 to 1.1x at the end of June 2025, while its quick ratio fell from 1.0x to 0.5x over the same period, indicating tight liquidity and potential difficulties in meeting immediate debt obligations.

According to its application, its debt reached RMB 25.798 billion as of June 30, 2025 (in RMB, same below), accounting for approximately 26.49% of its total assets. Although its debt decreased to RMB 23.973 billion by October 31, 2025, its short-term interest-bearing bank and other loans amounted to RMB 11.759 billion—a significant figure—while its cash and cash equivalents stood at only RMB 7.848 billion, insufficient to cover these liabilities.

In the first half of 2025, Unisplendour's revenue grew 24.96% YoY to RMB 47.425 billion, but net profit attributable to shareholders increased by only 4.05% YoY to RMB 1.041 billion. Gross margin continued to decline from 19.80% in 2022 to 14.42% in the first half of 2025. Net cash outflow from operating activities reached RMB 2.816 billion in the first half of the year. Meanwhile, the company continued to invest in R&D, with over RMB 5 billion in annual expensed R&D expenditures and RMB 330 million in capital expenditures in the first half of 2025 alone.

Against this backdrop, a Hong Kong listing has become inevitable. According to its disclosed fundraising plan, the proceeds will focus on high-performance intelligent computing, cloud, and digital solutions; strategic investments complementary or synergistic with core technologies in chips, software, or next-gen AI; and funding overseas expansion and strategic M&A.

The Dual Logic of A+H: Technological Positioning and Global Expansion

For Unisplendour, the Hong Kong listing means far more than just "capital replenishment." In its business portfolio, H3C contributes the bulk of revenue, but growth bottlenecks are emerging: its >30% domestic market share in switches is nearing saturation, and competition from Huawei and Ruijie Networks is intensifying, necessitating global expansion.

In the first half of 2025, the company's overseas expansion showed significant progress, with revenue from other countries and regions surging 52.98% YoY to RMB 1.979 billion. However, this still accounted for a negligible 4.17% of total revenue. A Hong Kong listing will provide easier access to international financing and enhance global brand recognition through Hong Kong's capital markets. The company plans to focus on consolidating its Asian presence while expanding in emerging markets like the Middle East, Africa, and Latin America, as well as mature European markets.

The deeper strategy lies in the AI computing race. As the industry enters the "AI in All" era, Unisplendour has built a product matrix ranging from liquid-cooled computing cabinets to AI firewalls. The incremental funding from its Hong Kong listing will support the development of AI data center switches and AGI platform software.

Hidden Risks: Gross Margin Pressure and Fierce Competition

Unisplendour's path to a Hong Kong listing is not without challenges. The most immediate pressure comes from declining profitability. The company attributes the gross margin contraction to the rising contribution of low-margin intelligent computing and storage businesses, squeezing higher-margin cybersecurity operations—particularly due to competitive pricing to secure partnerships with major internet firms.

Dependence on external technology is another concern. Although it launched the world's first 800G CPO silicon photonic switch, core chips still rely on third-party suppliers, impacting delivery cycles and cost control. In the AI model space, its Lingxi Intelligent Computing Platform supports training and inference for the DeepSeek-671B model, but bridging the gap with industry leaders requires massive R&D investment.

Market valuation logic also poses a test. Unisplendour's current A-share market cap of RMB 71.4 billion implies a 46.73x P/E based on trailing 12-month non-GAAP net profit of RMB 1.528 billion as of September 2025. In comparison, peer $IEIT(000977.SZ) trades at ~43.78x, while $ZTE(00763.HK) H-shares trade at a 30.71% discount to A-shares, reflecting Hong Kong's historically cautious valuation of tech stocks—especially those with high debt and earnings pressure.

If its Hong Kong IPO is priced below its A-share level, it could trigger a downward re-rating of A-shares; an overly high price, however, risks weak subscription.

The Bigger Picture: A New Battleground for Giants

Unisplendour's Hong Kong listing epitomizes the upgrade of China's ICT industry. In an era where computing power is a core productivity driver, its challenges mirror the sector's key questions: balancing short-term profits with long-term R&D, navigating domestic substitution and global competition, and seizing opportunities in the AI computing revolution.

From an industry perspective, Unisplendour's A+H move will intensify capital competition with rivals like Huawei and Inspur. Huawei leverages its full-stack tech edge to advance in the enterprise market, while Inspur dominates AI server infrastructure budgets. Unisplendour must rely on H3C's full-stack "cloud-network-security-computing-storage-device" capabilities to build differentiated barriers. Its liquid cooling solution has already achieved a power usage effectiveness (PUE) of 1.05—if commercialized rapidly with listing proceeds, this could be a game-changer.

For investors, Unisplendour's Hong Kong listing offers a combination of three attributes: an "anchor" in ICT infrastructure, AI security potential, and global growth. But realizing this value hinges on reversing gross margin declines and outperforming rivals.

Author: Wu Yan