New Stock Preview | China Institute of Computing: The AI "long-distance runner" that has seen its revenue increase sixfold in three years, is the tipping point for profitability at hand?

If perceptual intelligence is the first half of the AI industry, focusing on "seeing clearly and hearing accurately"; then cognitive intelligence is the second half, focusing on "thinking deeply and making clear decisions". When the first half turns into a battlefield of giants and price wars, the real barriers of the second half are just beginning to emerge. On June 14, Huayuan Computing Technology (Shanghai) Co., Ltd. (referred to as "Huayuan Computing") officially submitted its prospectus to the Main Board of the Hong Kong Stock Exchange, with joint sponsors China Galaxy International and Industrial and Commercial Bank International. This company, established in 2002 and foresighted in the field of cognitive intelligence and reasoning decision-making as early as 2017, has chosen to knock on the door of the Hong Kong stock market during the explosion of the cognitive intelligence track. So, for investors, is Huayuan Computing a growth investment worth betting on, or a high-risk target overshadowed by its aura? Explosive revenue growth, approaching profitability turning point According to the forecast, based on 2025 revenue calculations, Huayuan Computing is the fourth largest enterprise cognitive intelligence algorithm service provider in China. The company mainly develops and sells cognitive intelligence products that enable enterprises to operate and optimize their production and business operations. The products mainly include: cognitive intelligence algorithm platform, which provides core infrastructure and capabilities for developing, deploying, and operating cognitive intelligence applications; industrial-grade intelligence for industrial production scenarios; and operational decision-making intelligence for enterprise operations. The company's core competitiveness is first and foremost reflected in its deep technological accumulation. It has built three core proprietary technologies: a small sample learning algorithm framework based on non-linear expectations, a fusion reasoning paradigm based on knowledge ontology, and a neural-symbolic cognitive planning and decision-making system, which respectively address the three major pain points of learning ability when data is insufficient, explainability and accuracy of output results, and reliability of decisions in high-risk scenarios. As of the date of the prospectus disclosure, the cognitive intelligence algorithm platform has a standardized algorithm library with over 200,000 operators and models embedded, supporting the entire process from model development, fine-tuning, to deployment and governance. From a financial perspective, in recent years, Huayuan Computing has delivered a very impressive performance in terms of revenue. From 2023 to 2025, the company's revenue increased from 65.57 million yuan to 135 million yuan and 474 million yuan, with a year-on-year growth of 105.4% in 2024 and a further increase of 251.7% in 2025, with revenue growth of over six times in three years. This growth rate far exceeds the average growth rate of the Chinese enterprise cognitive intelligence algorithm market during the same period, making it a "race car" in the track. Behind the explosive revenue growth are the comprehensive efforts of the three core product lines. In 2025, the cognitive intelligence algorithm platform contributed revenue of 238 million yuan, accounting for half of the company's total revenue, with this product's revenue growing more than tenfold compared to 2023. The industrial intelligence body and operational decision-making intelligence body each achieved revenues of 118 million yuan and 111 million yuan, forming three balanced pillars. And the simultaneous advancement of these three drivers demonstrates its "1+X" business model - using the cognitive intelligence algorithm platform as a technical foundation, extending upwards to two application products, industrial-grade intelligence body and operational decision-making intelligence body, thus creating a multiplier effect. At the same time, with the explosive revenue growth, the turning point in profitability for Huayuan Computing is gradually becoming apparent. According to the prospectus, from 2023 to 2025, Huayuan Computing's net losses were 124 million yuan, 156 million yuan, and 53 million yuan respectively, with the loss narrowing year by year. Among them, the net loss in 2025 narrowed significantly by 66.2% compared to 2024. The adjusted net loss also narrowed significantly from 92.28 million yuan to 15.21 million yuan, indicating that the company's profitability turning point is approaching. Additionally, the company's gross profit margin has also gradually improved. In 2023, the gross profit margin was 33.9%, slightly decreasing to 32.1% in 2024, and then rising to 37.0% in 2025. This upward trajectory reflects two positive signals: firstly, the proportion of high-value-added products in the revenue structure continues to increase, and secondly, as the revenue scale rapidly expands, fixed costs such as research and development are significantly diluted, and economies of scale gradually emerge - the proportion of research and development expenses to revenue dropped from 126.9% to 24.1%, sales and marketing expenses decreased from 47.7% to 13.1%, and administrative expenses decreased from 60.3% to 8.6%. It is worth mentioning that, although the explosive revenue growth and approaching profitability turning point of Huayuan Computing have drawn attention, the market also focuses on its cash flow and financial pressure. According to the prospectus data, the company's operating cash flow from 2023 to 2025 was -67.89 million yuan, -94.81 million yuan, and -103 million yuan respectively, with continuous negative operating cash flow, mainly due to rapid business expansion and an increase in accounts receivable. The rapid growth of trade accounts receivable and bills receivable reflects the company's active market expansion and strategic positioning in the high-growth cognitive intelligence track through a reasonable credit policy. By the end of 2025, the company had reversed the previous net liabilities in current assets, achieving a net value of 104.4 million yuan in current assets. The company has implemented measures such as optimizing receivable policies and streamlining operational processes to improve cash flow. The IPO fundraising clearly includes the use of "supplementing operating funds", and after listing, it will further optimize the capital structure and strengthen financial strength to provide sufficient ammunition for the next stage of accelerated expansion. Therefore, if viewed from a longer-term perspective, these so-called "concerns" are precisely the stage characteristics of high-growth enterprises - in the process of rapidly expanding revenue, front-loading research and development investments, relaxing credit policies, and rising operating cash flow requirements are all "growth costs" of economies of scale, rather than exposures to structural risks. As the saying goes, short-term growth costs will eventually bring long-term competitive barriers. Thus, it is not difficult to see that standing at the starting point of the explosion of the cognitive intelligence industry, Huayuan Computing is shaping the current "concerns" into future "opportunities" with the attitude of a technology deep-rooted expert. Clear track , enterprise to be tested It must be said that from the market trends perspective, Huayuan Computing is in a high-growth period in the Chinese enterprise cognitive intelligence algorithm track. According to Frost & Sullivan data, the Chinese enterprise cognitive intelligence algorithm market has tremendous growth potential. The market size is expected to increase from 9.3 billion yuan in 2021 to 27.4 billion yuan in 2025. Driven by factors such as organizational transformation from digital to intelligent, the evolution of artificial intelligence technology from perceptual intelligence to cognitive intelligence, the commercialization and acceleration of cognitive intelligence technology applications, and supportive government policies, the market size of the Chinese enterprise cognitive intelligence algorithm market is expected to further increase to 142.2 billion yuan by 2030, with a compound annual growth rate of 39.0% from 2025 to 2030. It is worth mentioning that cognitive intelligence is not just an "uplifting" trend, but the next infrastructure of a trillion-dollar industrial revolution - from perceptual intelligence to cognitive intelligence, the wave of large models is driving AI from "recognizing faces and transcribing speech" to "understanding reasoning and autonomous decision-making" in the deep water zone. At the national level, clear signals have been released: by the end of the "Fifteenth Five-Year Plan", the scale of AI-related industries is expected to exceed 10 trillion yuan, and the Hong Kong Special Administrative Region government has also invested 1 billion Hong Kong dollars to establish an "artificial intelligence research institute", providing broad development space for participants in the track due to policy dividends. However, high growth often comes with high competition. The Chinese enterprise cognitive intelligence algorithm market is still relatively fragmented - based on revenue calculations for 2025, Huayuan Computing ranks fourth nationally with a market share of 1.7%, and is ranked first among independent enterprise cognitive intelligence algorithm service providers. This ranking reveals two realities: on the one hand, as a leader among independent vendors, Huayuan Computing has surpassed its peers in focus and technological purity; on the other hand, a market share of 1.7% means that the entire market is still quite fragmented, with the top three competitors (including MEGVII, Fourth Paradigm, etc.) crushing Huayuan Computing with their comprehensive capital, ecosystem, and customer resources, imposing continuous pressure on the company. Compared to giants like MEGVII and Baidu, who have comprehensive technical layouts, Huayuan Computing has chosen a "narrow and deep" path. This independence enables the company to avoid the fate of being bound by the ecosystem of big companies, but it also must bear the full cost of sales, research and development, and customer acquisition alone. How to strike a balance between independent focus and resource endowment is a long-term proposition facing Huayuan Computing. In addition, Huayuan Computing also faces the risk of iterative technology routes for large models. The speed of technological advancement in the AI industry far exceeds that of the traditional software industry. Although the cognitive intelligence track has entered a period of rapid development, the technology roadmap is still undergoing rapid iteration. If the company fails to keep up with the latest technological trends - such as the deep integration of large models and cognitive intelligence, and the integration of multimodal capabilities - its technological advantages may be quickly eroded. Continuous investment in research and development is not only a necessary means to mitigate risks, but also a heavy burden that gradually erodes profits. It can be seen that as the Chinese enterprise cognitive intelligence algorithm market rushes forward with a compound annual growth rate of 39%, Huayuan Computing, with its market share of "first in independence", has already obtained a ticket for the second half. However, a ticket does not guarantee victory. For Huayuan Computing, the industry's is almost certain, but the company's still needs to be verified - whether it can continue to expand market share in the midst of giant competition, and whether it can maintain a leading position in technology iterations will remain crucial variables determining the company's long-term value. Conclusion In summary, on the long-distance race track of cognitive intelligence, Huayuan Computing has proven its ability in technology productization and market validation with a three-year revenue growth of over six times. But explosive revenue growth is just one side of the coin, the timetable for narrowing losses and turning positive cash flow is the core variable that will determine whether its IPO pricing will be truly accepted by the market. Therefore, for investors, Huayuan Computing is not a "certainty opportunity" in the standard sense, but a "growth opportunity" with clear points of contention - whether the high growth in the cognitive intelligence track can continue, whether the profitability turning point can appear as scheduled, and whether the differentiated path of an independent focus can break through in the market full of giants.