New Stock Outlook | Focus on AI servers to achieve high performance growth, structural challenges may become a "shackle" on Aqara's valuation.

With the continuous acceleration of the trend of mainland companies listing in Hong Kong, the Hong Kong stock market has formed a relatively complete AI computing industry chain, gathering a group of listed companies covering key links such as AI chips, servers, computing power infrastructure, etc. Now, the Hong Kong stock AI computing industry chain will welcome new forces. Observing that Inspur Computer Information Co., Ltd. (hereinafter referred to as "Inspur") has submitted its listing application to the main board of the Hong Kong Stock Exchange on April 2, with CICC as its exclusive sponsor. As a technology company focusing on the development, design, manufacturing, and sales of AI computing devices, as well as providing related product technical services and support, Inspur's main products include high-performance AI servers, other servers, supporting devices and components, etc. According to Frost & Sullivan data, based on the revenue in 2024, Inspur is the sixth largest AI computing equipment solution provider in China, and the largest independent company among AI computing equipment solution providers in China. In terms of performance, from 2023 to 2025, Inspur's revenue is expected to be approximately RMB 2.206 billion, RMB 2.760 billion, and RMB 5.5 billion respectively, while the net profit for the period is expected to be approximately RMB 54.435 million, RMB 63.675 million, and RMB 122 million respectively, showing a trend of accelerated revenue and profit growth. However, a deeper analysis of Inspur's prospectus reveals that despite the company being in a high-growth sector and showing strong performance growth, the actual business challenges and potential risks cannot be ignored. AI server revenue accounts for more than 80%, and a significant increase in contract liabilities increases revenue visibility Inspur's continued rapid performance growth is closely related to the highly prosperous industry it operates in. The AI computing equipment solution industry uses AI servers as the core carrier, providing efficient computing equipment and supporting services for various AI scenarios. This solution not only includes dedicated server hardware but also integrates software platforms, system optimization, and technical support, assisting clients in optimizing AI architecture and building efficient computing platforms. With the continuous increase in demand for AI computing power in various industries, the global market for AI computing equipment solutions has rapidly expanded from $13.2 billion in 2020 to $153.2 billion in 2024, with a compound annual growth rate of 84.5%. China's market performance is particularly outstanding, increasing from $3.6 billion to $19.6 billion, with a compound annual growth rate of 53.2%. Inspur, which has deepened its layout in this field, offers a product portfolio covering various types of servers such as high-performance AI servers, general servers, storage servers, edge servers, as well as third-party AI high-bandwidth switches, adapters, accelerators, CPUs, and supporting devices and components. According to the prospectus, in 2025, Inspur's revenue from servers accounted for a high proportion of 84.1%, with AI servers accounting for 80.8% and other servers accounting for 3.4%. The proportional contribution of supporting equipment and components, technical services, and support to total revenue was 15.8%, 0.1%, and 0.1%, respectively. Benefiting from its continued focus on AI servers, Inspur has fully grasped the opportunities presented by the high-speed development of the industry, and this business has become the core engine driving the company's rapid growth. At the same time, the synchronous expansion of the supporting equipment and components business has further driven overall revenue growth. Based on the revenue in 2024, Inspur has ranked sixth in the Chinese AI computing equipment solution industry, with a market share of approximately 2%, indicating that the company has established a certain scale foundation in the industry. Frost & Sullivan predicts that as AI computing equipment is further applied in more industries, the global market size is expected to increase from $240.4 billion in 2025 to $958.7 billion in 2029, with a compound annual growth rate of about 44.3% during this period. The Chinese market will maintain strong growth, with the growth rate accelerating further, from an estimated $19.6 billion in 2024 to $202.4 billion in 2029, with a compound annual growth rate of about 59.5%, which is fifteen percentage points higher than the global growth rate, indicating significant future development opportunities in the industry. It is foreseeable that Inspur, which has established a market foundation and business scale in the AI server field, is expected to further seize the opportunities for the expansion of the Chinese and global AI computing market, benefiting continuously from the structural growth of the industry. The rapid growth of Inspur's contractual liabilities further confirms this point. As of December 31, 2025, Inspur's contractual liabilities had reached RMB 672 million, an increase of more than 230% from the end of 2024 to RMB 2.03 billion, reflecting sufficient orders on hand and strong downstream demand. As of February 28, 2026, this indicator remained high at RMB 509 million, indicating that the company had completed approximately RMB 163 million (corresponding to 13.9% of the previous contractual liabilities) worth of order deliveries in about two months. Several structural weaknesses are the primary constraints on long-term development Although Inspur operates in a highly prosperous sector, maintains growth performance, and significantly increases contractual liabilities, it faces clear risks and challenges in its operations. These structural challenges may raise doubts about the long-term profitability quality and sustainability of growth, thereby putting pressure on Inspur's valuation in the capital market to a certain extent. Firstly, Inspur's profitability is currently at a relatively weak level, with several key indicators showing a downward trend year by year. Data shows that from 2023 to 2025, the company's gross profit margin decreased from 10.1% to 6.0%, and the adjusted net profit margin also decreased from 3.26% to 2.54% during the same period, indicating that the company faces certain pressure on the quality of profits while expanding its revenue scale. A detailed analysis reveals that the continuous decline in gross profit margin is mainly related to the structural changes in projects undertaken by Inspur. In recent years, the company has carried out more large-scale projects with a high proportion of purchased third-party hardware, where the share of these external components in the overall system value is high, diluting the profit contribution that the company's independently developed server architecture and system integration can provide, leading to high per-server costs and low profit margins. Essentially, this reflects a market expansion strategy of "volume in exchange for price". Under the pressure of continuously declining gross profit margin, Inspur can only reduce operating expenses to ease profit pressure by cutting costs and increasing efficiency. The ratio of operating expenses to total revenue for Inspur was 6.7%, 5.9%, and 3.7% from 2023 to 2025. This indicates that despite the appearance of revenue scale expansion, Inspur's actual profitability continues to be under pressure, and the quality of performance is not as impressive as it might seem. Moreover, the continued weakening of Inspur's profitability is fundamentally due to its weaker bargaining power in the industry chain. As a system integrator, the company has to bear the pressure of fluctuating core hardware costs upstream but finds it difficult to fully pass on these costs to downstream customers, a situation that reflects its insufficient bargaining power in the value chain. This weak position also directly exacerbates the company's cash flow and debt pressures. The prospectus shows that Inspur's operating cash flow had been negative in the long term, with a net outflow of RMB 56 million in 2025. At the same time, the scale of inventory and accounts receivable continued to rise, with inventory value reaching RMB 1.593 billion and trade receivables and notes reaching RMB 587 million in 2025, significantly tying up operating funds. In the backdrop of continuous business expansion while having inefficient capital turnover, the company has to rely on external financing to sustain its operations, resulting in a high asset-liability ratio, which reached 80.9% in 2024 and remained at a high level of 76.3% in 2025. This further confirms the company's relatively passive financial structure and the challenges it faces in terms of operational resilience. The insufficient bargaining power of Inspur in the industry chain may be attributed to three main reasons. Firstly, the continuous increase in customer concentration. By 2025, the revenue contribution of Inspur's top five customers had significantly increased to 61.4%, up from 47.2% in 2023, indicating a deepening reliance on a few major customers, which could weaken the company's bargaining power and increase business stability risks. Secondly, industry competition is intensifying. Currently, the Chinese AI computing equipment solution market displays a significant concentration among top players, with the combined market share of the top three manufacturers reaching 38.2%, and the top five manufacturers occupying nearly half of the market. In comparison, although Inspur ranks sixth in the industry, its market share is only about 2%. This structure implies that the company not only needs to face the suppression from top enterprises in terms of technology, costs, and resources but also needs to deal with intense competition from numerous small and medium-sized manufacturers in market segments and customer competition, exposing it to significant overall survival and development pressures. Thirdly, the essential nature of Inspur's current business model is being overly dependent on external core technology as an integrator, which differs from technology-driven companies like its peer, Dawning Information Industry. Dawning Information Industry excels in self-developed capabilities, possessing self-developed core chips that meet international advanced levels. Thanks to the high proportion of self-developed products, Dawning Information Industry's gross profit margin is close to 30%, far exceeding Inspur. However, Inspur has a relatively higher proportion of externally sourced core components, supporting devices, and components, which results in lower gross profit margins. The core reason for the low proportion of self-developed products may be related to Inspur's low research and development investment. From 2023 to 2025, Inspur's research and development expenses accounted for 2.6%, 2.0%, and 1.2% of the company's revenue, respectively. Such low investment in research and development is not conducive to the long-term establishment of core competitiveness and the increase in the proportion of self-developed products. Low research and development investment is a key factor leading to low technical value-added, making it difficult to break away from the integrator model. In conclusion, Inspur demonstrates a stark juxtaposition of "high growth" and "high challenges". On the one hand, the company operates in the golden track of AI computing power, showing continuous high growth performance, and adequate contractual liabilities also provide visibility for its short-term income. On the other hand, low profitability levels, high customer concentration, weak capabilities for self-developed technologies, and other structural weaknesses pose major constraints on its long-term development. If Inspur can gradually break through these bottlenecks through technological investment, optimization of customer structure, and supply chain management, it has the potential to achieve a qualitative improvement on the basis of scale expansion, thereby opening up a broader valuation space. In this process, the post-financing valuation of RMB 3.58 billion corresponding to its listing in December 2025 may become an important reference point for the market to assess its value evolution.