New stock news | Xunzhong shares improve gross profit margin slightly through hearing at Hong Kong Stock Exchange in 2024

According to the disclosure on June 20 by the Hong Kong Stock Exchange, Beijing Xunzhong Communication Technology Co., Ltd. (referred to as Xunzhong) conducted a listing hearing on the main board of the Hong Kong Stock Exchange, with DBS Bank as the sole sponsor. The prospectus shows that based on the revenue in 2024, Xunzhong ranks third in China's cloud communication service providers, with a market share of 1.8% of the total revenue in the Chinese cloud communication service market in 2024. According to Frost & Sullivan data, the company is one of the earliest providers of cloud communication services in China. According to the same source, the company is one of the few in China that can provide AI-driven communication services. Communication Platform as a Service, also known as CPaaS, is the core of the company's business, accounting for over 80% of revenue in the past performance period. According to the Frost & Sullivan report, the total revenue of the Chinese cloud communication service market in 2024 reached RMB 50.3 billion, including RMB 44.8 billion in the Chinese CPaaS service market and RMB 5.5 billion in the Chinese contact center SaaS market. From 2020 to 2024, the total revenue of the Chinese cloud communication service market increased from RMB 35.5 billion to RMB 50.3 billion, with a compound annual growth rate of 9.1%. It is estimated that by 2029, the total revenue of the Chinese cloud communication service market will reach RMB 74.5 billion, with a compound annual growth rate of 8.2% from 2024 to 2029. Based on the 2024 revenue, Xunzhong ranks third in the Chinese cloud communication service market, with a market share of approximately 1.8%. Among the top five suppliers, the company had the highest net profit in 2024. In terms of financials, the revenue of Xunzhong for 2022, 2023, and 2024 was approximately RMB 810 million, RMB 916 million, and RMB 918 million respectively; and the net profit for the same periods was RMB 74.66 million, RMB 76.584 million, and RMB 50.642 million respectively. Xunzhong pointed out that the overall gross profit margin decreased from 24.1% in 2022 to 21.4% in 2023, due to the significant increase in messaging service revenue (which has a lower profit margin than voice service). The gross profit margin of project-based communication solutions increased from 54.9% in 2022 to 61.3% in 2023, mainly due to the delivery and acceptance of several high-margin software projects in 2023. The overall gross profit margin slightly increased from 21.4% in 2023 to 22.1% in 2024, driven by a stable revenue structure, with most business segments (including the core CPaaS segment) achieving higher gross profit margins.