New stock outlook | Three years of increasing revenue but not profit, how does XTransfer support a valuation of $3 billion?

Recently, according to the Hong Kong Stock Exchange, B2B cross-border payment service provider XTransfer (Extransfer Limited-W) has formally submitted its application for listing, with UBS Group and CICC as joint sponsors. This Shanghai-based financial technology company, founded in 2017, has taken a key step towards the capital market after completing seven rounds of financing. The shareholders lineup for this listing of XTransfer is luxurious, gathering well-known institutions both domestically and internationally such as GaoRong Capital, Planetree, D1 Capital Partners, Alibaba, China Merchants Venture, LHCP, Zero One Capital, and others. The company's latest round of financing was completed in March 2026, with a financing amount of $69 million and a post-investment valuation of $3.02 billion. As a global leading B2B cross-border trade payment platform holding multiple payment licenses in various countries and regions, what investment value does XTransfer actually possess? Revenue growth, expanding losses, slight pressure on gross profit margin Established in 2017, XTransfer is one of the world's first payment platforms focusing on B2B cross-border trade, dedicated to solving pain points such as low accessibility to cross-border payments, account freezing, difficulties in remittance and settlement, slow clearing, and high costs faced by small and medium-sized enterprises. As of March 31, 2026, the company has obtained the necessary payment licenses in mainland China, Hong Kong, the UK, the US, Singapore, the Netherlands, Australia, and Canada. In terms of performance, XTransfer has shown strong growth momentum. From 2023 to 2025, the company's revenue increased from $115 million to $248 million, with a compound annual growth rate of 47.5%; the gross profit during the same period was $110 million, $152 million, and $229 million, respectively, maintaining a long-term stability at above 92%. However, the company recorded losses of $153 million, $353 million, and $484 million in the reporting period, respectively. While it seems that the losses are expanding, it is mainly due to changes in the fair value of convertible and redeemable preferred shares. If this factor is excluded, adjusted net profits were $11.2 million, $5.27 million, and $47.67 million respectively, especially with a significant improvement in profitability in 2025, indicating that the company's operations have begun to enter a profitable track. It is worth noting that XTransfer's business structure is highly concentrated in the payment service field. From 2023 to 2025, the proportion of payment service revenue increased continuously from 76% to 83.8%, while the customer fund interest income proportion decreased from 23.3% to 15.4%. At the same time, both core businesses experienced a slight decline in gross profit margin: the payment service gross profit margin decreased from 94.6% to 91%, and the customer fund interest income gross profit margin dropped from 99.5% to 98.5%. Although the absolute values are still high, if this trend continues, it may reflect increased industry competition or a rise in customer bargaining power. Dividend period for cross-border e-commerce industry, urgent need for expansion in small and medium-sized B2B payment market XTransfer's rapid growth is due to the structural opportunities in the track it is in. In recent years, China's cross-border e-commerce has maintained a fast growth trend, with its strategic importance continuously rising. Research data shows that from 2021 to 2024, the size of China's cross-border e-commerce market increased from 1.888 trillion yuan to 3.2574 trillion yuan, with an average annual growth rate significantly higher than traditional foreign trade forms. From January to April 2026, the industry continued its high growth momentum, with cross-border e-commerce import and export volume reaching 618.46 billion yuan in the first quarter. Cross-border e-commerce has become an important bridge connecting the domestic industrial system with the global consumer market, and its strategic significance will be further highlighted during the "14th Five-Year Plan" period. It is worth noting that Cross-border e-commerce has been included in the country's highest-level policy agenda for the thirteenth consecutive time in the government work report of 2026. The policy orientation has evolved from "expanding pilots" and "encouraging development" in the early stages to "expanding and upgrading, regulating orderly development" now, marking a shift in the industry's core demands from scale expansion to quality improvement. Unlike consumer-side C2B cross-border payments, B2B cross-border trade payments involve higher transaction amounts, longer transaction chains, and greater risk exposure. C2B payments rely on a unified settlement network of card organizations and a mature digital wallet system, with relatively complete infrastructure; while B2B payments still mainly rely on the intermediary network of traditional banking systems, lacking a globally unified settlement platform. Networks between different financial institutions are incompatible, and transactions often require multiple intermediaries. Cross-border payments usually take three to seven working days, with high operational complexity and limited transparency. The coverage of small currencies is particularly weak, and exchange difficulties between mainstream currencies and small currencies are exacerbated by foreign exchange controls in many emerging markets. Global anti-money laundering requirements are becoming increasingly stringent, and the complex compliance processes of traditional financial institutions, which are labor-intensive, further lead to slow and easily interrupted payments. It is understood that small and medium-sized enterprises (SMEs) are the backbone of global B2B cross-border trade, but they also face more prominent structural dilemmas. In terms of quantity, SMEs account for over 90% of the total number of enterprises participating in such trades; in terms of trade volume, SMEs contributed around $12.7 trillion in 2025, accounting for 38.4% of the global B2B cross-border trade total volume. This number is expected to increase to approximately $16.2 trillion by 2030, with the proportion rising to 41.1%. This indicates that B2B cross-border payment solutions for SMEs have a broad and continuously expanding market space. However, due to their relatively small transaction volumes and inadequate risk management capabilities, traditional banking services for SMEs have low economic benefits, causing a large number of SMEs to be excluded from the formal financial system. They are often forced to turn to unlicensed financial service providers, leading to high compliance risks such as fund freezing, payment interruption, and account suspension. The dilemma of low service availability and being forced to resort to grey channels is a real challenge faced by SME cross-border payments. X-Net Network + AI Big Model, Building Competitive Moat XTransfer is a platform that provides cross-border payment services for SMEs, helping them achieve efficient and secure settlements with overseas trading enterprises. In addition to core payment services, the company also provides a variety of value-added services, including financial asset management and software services, to meet the increasingly diverse business needs of SMEs outside mainland China. In terms of transaction volume, from 2023 to 2025, XTransfer's total payment transaction volume (TPV) was 18.633 billion USD, 32.618 billion USD, and 60.516 billion USD respectively, with a compound annual growth rate of 80.2%, significantly higher than the industry's overall 34% growth rate during the same period. The number of active customers increased from 82,600 to 149,000, with each active customer contributing TPV increasing from $225,500 to $406,300. In addition, the customer net revenue retention rate reached 121% in 2025, and the proportion of TPV from customers outside mainland China increased from 24.5% to 44.3%, demonstrating substantial progress in acquiring global customers. The core competitiveness of XTransfer largely comes from its independently developed X-Net platform. It is the world's first and currently the only global unified B2B cross-border trade settlement and risk management platform, which has established partnerships with multiple international banks and offers payment services covering more than 200 countries and regions worldwide. Furthermore, the company has deeply integrated X-Net with digital wallets, allowing SMEs to receive, remit, and transfer cross-border funds more intuitively through a single app. As of March 31, 2026, X-Net had connected to 171 financial institutions through standardized APIs, achieving round-the-clock and fully automated fund circulation, data exchange, and operational processes within the partner network. The company's independently developed vertical AI model, TradePilot, is the world's first and most advanced B2B cross-border trade payment vertical AI model. As of March 31, 2026, through TradePilot, the company achieved an automated transaction audit rate of approximately 98.5%, controlled fraud rates at an industry-low level of about 0.003%. At the same time, it established one of the most cost-effective risk management practices in the industry. This capability not only significantly reduces operating costs but also forms another core moat outside of payment licenses. According to data from Zhusi Consulting, as of December 31, 2025, using the XTransfer platform can reduce remittance fees by about 95% and fund remittance service fees by about 80% compared to traditional bank transfers, demonstrating significant cost advantages. In terms of compliance and risk control, XTransfer implements fully digitalized management for identity authentication and transaction monitoring. It has built a robust risk control system based on an AI-driven risk assessment system and automated document review technology. This not only effectively alleviates the concerns of financial institutions in risk management but also significantly reduces the frequency of SME bank accounts being frozen or closed. In terms of market position, based on the 2025 payment transaction volume (TPV), XTransfer has become the largest B2B cross-border trade payment platform in the world with a transaction volume of $60.5 billion, accounting for 5.1% of the market share. The second and third market shares are 2.6% and 1.5%, corresponding to TPVs of $30.3 billion and $17.7 billion, indicating a relatively low market concentration. In conclusion, thanks to the digital dividend period for global small companies in B2B cross-border trade, XTransfer has quickly established a leading advantage in scale and efficiency through its independently developed X-Net platform and AI model. Financially, the company demonstrated improved profitability on the operational level in 2025, and its healthy business model with over 90% gross profit margin affirms its health. However, investors still need to pay attention to various concerns such as the relatively single business structure and declining gross profit margins. For market investors, whether XTransfer can convert its first-mover advantage into sustainable profitability and deeper moats will be the key factors determining its long-term investment value. So there is no exact information if XTransfer is going public or if it will be a good investment opportunity.