New Stock Outlook | Qunhe Technology: Seizing the Intelligent "Golden Track" Space, Profit Difficulty Remains the Key to Breakthrough

Competition in artificial intelligence is extending from text and image generation to understanding the physical world. This development is particularly prominent in the home decoration industry. For example, AI technology greatly empowers space design software industry, enabling innovation, efficiency, and optimization to reach unprecedented levels. The advancement in GPU and AI rendering has optimized rendering flows and enhanced user experience, ensuring smooth high-performance graphic operations, thus driving industry innovation. As the industry enters a new journey, major scale platforms are emerging in the secondary market, and Kuajiale is one of them. According to the Hong Kong Stock Exchange disclosure on February 24th, Kuajiale's parent company, Qunhe Tech, has submitted an application for listing on the Hong Kong Stock Exchange mainboard, with Morgan Stanley and JP Morgan as joint sponsors. The company had previously submitted applications to the Hong Kong Stock Exchange on February 14, 2025, and August 22, 2025. It is worth mentioning that Qunhe Tech, along with DeepSeek, Qiangnao Tech, Yushu Tech, Yunshenchu Tech, and Game Science, are collectively known as the "Six Little Dragons of Hangzhou." If successfully listed, the company is expected to become the "world's first stock in the global space intelligence sector." The company primarily targets the space design software market and, according to Frost Sullivan's data, Qunhe Tech holds the largest market share in China, accounting for 23.2% of the market share based on revenue in 2024. Additionally, the company has expanded into AI training for individuals and e-commerce product displays, enabling it to enter a broader general design and visualization software market, where Chinese space design software accounted for only 4.4% in 2024. From the information disclosed in the prospectus, Qunhe Tech's IPO proceeds will be used for international expansion, deepening sales penetration, building strategic alliances, global brand promotion, enhancing existing product features, launching new products/features, covering real and virtual spaces, increasing domestic sales and market promotion to enhance brand awareness, and investing in core technology (large spatial models, GPU clusters, AI) and infrastructure. With such a strong strategic layout, can Qunhe Tech leverage industry momentum to tell the story of being the "world's first stock in global space intelligence" in the secondary market? Stable revenue growth, profitability challenges remain the key to breaking the deadlock Qunhe Tech is a leading cloud-native space design software provider in China, whose products are widely used in various business scenarios, ranging from residential and office buildings to retail stores and commercial projects. The company's product matrix is primarily centered around Kuajiale. Kuajiale is a cloud-native space design platform in China, offering rapid drag-and-drop 3D design, real-time rendering, a vast model library, and BIM capabilities. In international markets, the company has launched a localized space design solution called Coohom for the Asian and American markets, featuring region-specific design interfaces and model libraries, supporting 18 languages. Besides software products, Qunhe Tech also provides professional services through its next-generation space intelligence solution, SpatialVerse, utilizing realistic and physically correct synthetic 3D datasets to accelerate AI development and lower real-world testing costs. In terms of core competitiveness, technology and innovation remain essential parts of Qunhe Tech's software. The company's solutions are based on three core technological capabilities: specially built GPU infrastructure, advanced AI applications, and synthetic virtual data generation. In recent years, with the continuous growth of the space design software market, Qunhe Tech's revenue has been expanding, maintaining a growth trend due to its leading position and technological advantages. According to the prospectus, Qunhe Tech's revenue increased from RMB 664 million in 2023 to RMB 755 million in 2024, further increasing to RMB 820 million in 2025, where the growth is mainly attributed to increased subscription revenue from major clients and expanded customer base. During the period, the company's subscription revenue from major clients increased from RMB 257 million in 2023 to RMB 311 million in 2024, and further grew to RMB 363 million in 2025, mainly driven by strong customer retention and high renewal rates, as well as the introduction of new features supported by enhanced sales and marketing efforts, encouraging customers to upgrade their accounts. However, despite maintaining a continuous growth trend in revenue, Qunhe Tech's profitability situation is not optimistic. From 2023 to 2025, the company's net losses were RMB 646 million, RMB 513 million, and RMB 428 million respectively, accumulating a total loss of RMB 1.587 billion over the three years. In terms of operating costs, Qunhe Tech continues to incur losses, which may be related to its continuous high investments. The company has been in a "burning money for growth" mode since its establishment. The prospectus clearly states that the losses are mainly due to continuous significant investments in product development, technical support, and product marketing. The accumulated research and development expenditure from 2023 to 2025 exceeded RMB 1 billion. With continuous annual losses, Qunhe Tech's cash flow is increasingly tight, leading to significant debt pressure. On one hand, the net cash flows generated from operating activities have been negative, with a deficit of RMB 19 million in 2025, indicating that the core business itself has not been able to stabilize cash flow; on the other hand, the high level of liabilities, with the total debt reaching RMB 4.735 billion by the end of 2025, while the total assets were only RMB 5.51 billion, mainly driven by the need to repay financial debts, which continuously squeeze cash flow. From the above fundamentals, although Qunhe Tech, as a leading space design software provider in China, has shown impressive market share and revenue scale performance, the challenges in profitability may still have a certain adverse impact on the company's investment value. Seizing the opportunity in the "Golden Track" of space intelligence, the future of imagination It is understood that space design software is a digital tool used to create, edit, and analyze space layouts, widely applied in various fields such as architectural design, interior design, urban planning, and infrastructure construction. Currently, the growth pattern of this track is mainly driven by the dual-wheel drive, with increments mainly coming from cross-border scenarios empowered by AI. First, the traditional base (steady growth): According to data from Frost Sullivan, the foundation of the Chinese space design software market is projected to reach RMB 6.6 billion by 2029, with a compound annual growth rate of 14.9%, showing characteristics of cloudification (cloud software accounting for over 50%) and popularization of AI-assisted design (such as automatic scheme generation). Second, the emerging blue ocean market (explosive growth): The broad space of the space intelligence market is tremendous. With the continuous development of AI technology, the application prospects of space intelligence in architectural design will become broader. According to estimates from CCID CONSULTING, the size of China's space intelligence market is expected to exceed RMB 300 billion in 2025, covering comprehensive application market sizes of space intelligence in various fields such as smart cities, transportation, agriculture, and industry. Therefore, this track is also regarded as the second growth curve of the AI industry after the large language models. Based on this development trend, Qunhe Tech's strategic positioning has become more clear, transitioning from being a "3D space software provider" to a "space intelligence service provider," attempting to become the "water seller" of the underlying technology in the AI era. According to the prospectus, in 2025, Qunhe Tech has successively launched related products to continuously expand its moat. For example, it has launched an AI intelligent design platform, released cutting-edge spatial language and generation models SpatialLM and SpatialGen, introduced the cloud-native industrial AI twin platform SpatialTwin, space intelligence open platform Aholo, and 3D content creation tool LuxReal. Among them, Aholo's space intelligence open platform can encapsulate core capabilities as APIs and SDKs, empowering developers in the fields of embodied intelligence, film and television, e-commerce, etc. However, it is important to note that the current volume of these new businesses is still small, and "distant water is still unable to quench near thirst." In 2025, the company's SpatialVerse solution has attracted 16 clients, generating revenue of RMB 5.2 million from these clients, which is insignificant compared to the annual total revenue of over RMB 800 million. In summary, Qunhe Tech's Hong Kong IPO this time is like a "top student" taking the "AI exam" with a "rich foundation" (data and market), having profitable traditional businesses as support and a story of space intelligence for the future. However, it also carries a considerable "historical burden" (profitability challenges and high debts), urgently needing an IPO to "replenish blood" for the next race.