Bounce back from the bottom! XUNCE (03317) TokenOS lands in Europe, and order-driven ARR grows strongly.

On July 12th, XUNCE Technology (03317) responded to market sentiment with solid industrial results. XUNCE announced that it has signed a strategic cooperation memorandum with Lutech S.p.A., a leading European technology services group, to jointly develop a scenario Token factory for the European market. This also marks the landing of XUNCE TokenOS operating system in Europe, signaling a solid step forward in the company's internationalization strategy, with expectations of further increasing the proportion of overseas revenue for the full year and driving strong growth in ARR. At the same time, the company has completed a new round of placement and convertible bond transactions, successfully raising approximately HK$2.35 billion, introducing multiple global first-tier institutional investors and top sovereign funds, further optimizing the shareholder structure, strengthening the company's brand awareness and financial strength in the international capital market, and providing ample capital reserves for global expansion. In terms of domestic business, the Token factory has expanded horizontally into various fields such as physical AI, smart connected vehicles, quantum computing, domestic computing power, and industrial intelligent manufacturing, driving a 320% surge in Token ARR month-on-month in May. With multiple top securities firms providing coverage and the fundraising of HK$23.5 billion enhancing financial strength, XUNCE is building a solid support for a rebound. Teaming up with Lutech: TokenOS takes a solid step towards internationalization, expected increase in overseas revenue proportion for the full year Lutech is a leading Italian company and a leading digital and artificial intelligence service provider in Europe, with over 6,000 professional talents and a business scale of approximately 1 billion euros. It has a client network connected to many European enterprises, and with an end-to-end full-process service system covering business consulting, implementation, and governance, it helps companies maximize operational benefits and create comprehensive integrated service solutions. This provides an irreplaceable channel for the penetration of XUNCE's TokenOS in high-value European scenarios. According to the cooperation content, XUNCE provides real-time AI data infrastructure technology, while Lutech contributes industry knowledge, local delivery capabilities, and EU compliance experience. The two parties will jointly develop AI transformation solutions following the EU data sovereignty principle, promoting the commercial landing of solutions including AI Token factories in the European market, and jointly building a cross-border innovation ecosystem centered on sovereign AI and secure data infrastructure. This partnership signifies the first systematic landing of XUNCE TokenOS in Europe, further validating its applicability across regions and regulatory systems, with expectations of a significant increase in the proportion of overseas revenue for the full year. Placement completed, introducing global first-tier investors, shareholder structure further optimized On July 10th, with the successful completion of the company's placement and convertible bond transactions, XUNCE has successfully introduced multiple global top-tier long-term institutional investors and sovereign funds, enriching the company's capital reserves and significantly optimizing the shareholder structure, enhancing the company's reputation and recognition in the international capital market. The ample capital reserves will provide a solid funding guarantee for the global deployment of TokenOS, deep expansion in the European market, and advanced technology research and development. According to the announcement, after the completion of the placement, the total number of issued H shares of the company increased from 267 million shares to 274 million shares, and the total number of issued shares increased from 323 million shares to 330 million shares. The bonds are expected to be listed on the Hong Kong Stock Exchange around July 13, 2026. The proportion of public shareholding has increased from 61.08% to 61.94%; if all bonds are converted, the proportion of public shareholding will further increase to 63.35%. The proceeds from this placement will be used to advance the construction of a full-chain AI infrastructure and cross-industry commercial deployment, marking the company's transition from the product development stage to the large-scale deployment stage of enterprise-level AI infrastructure. Currently, the company has initiated multiple industrial collaborations around TokenOS: collaborating with the Beijing International Big Data Exchange to promote the tokenization and assetization of data infrastructure; partnering with domestic GPU manufacturers such as Muxi, ILUVATAR COREX, and BIREN TECH to jointly build a "computational power + data" integrated solution; deploying in-vehicle AI agents with PATEO and SAIMO; and collaborating with the Shenzhen Data Exchange to promote the data assetization applications in vertical industries such as finance, manufacturing, and urban management. The proceeds from the new fundraising are focused on infrastructure construction and scalable commercial deployment, differing from IPO fundraising primarily used for product development and optimization of existing solutions, reflecting a key leap in the company's strategic focus from product iteration to large-scale industrial deployment. 320% month-on-month increase in ARR in May, favored by multiple top securities firms Industrial landing is transforming into quantifiable financial indicators. XUNCE's Token call ARR in May 2026 increased by 320% month-on-month, exceeding management's previous estimate of 20%-30% by year-end. This indicates that the business model shift from project-based billing to Token consumption-based billing is happening, with the latter having stronger predictability and compounding effects. It provides a strong growth engine and performance elasticity for the upcoming midterm performance the Token payment model not only enhances the sustainability and predictability of revenue, but also significantly improves the company's profit quality through its structural advantages of high gross profit and high repurchase. Based on the rapid growth trend of current Token calls and accelerated industrial cooperation landing, there is potential for exceeding expectations in core indicators such as interim revenue and ARR, further solidifying market confidence in the company's business model transformation. This business model has received favorable views from multiple top-tier securities firms. CITIC SEC, Huatai, China Securities Co., Ltd., Deutsche Bank, and HAITONG INT'L have provided comprehensive coverage or upgraded ratings, with the highest target price reaching 352 Hong Kong dollars. From a valuation perspective, once the proportion of Token payment revenue exceeds the 20% threshold, XUNCE's valuation anchor will switch from "AI solution provider" to "AI infrastructure platform". Conclusion The current stock price pullback reflects the market's doubt about the "landing capabilities" of AI concept stocks. However, XUNCE has provided a strong response with its dense industrial landing results taking a solid step with Lutech in overseas collaboration, completion of placements and convertible bond transactions, and a 320% month-on-month increase in ARR in May. A global AI real-time data infrastructure network centered around TokenOS is taking shape, and for XUNCE, still in a low valuation position, the density and speed of industrial landing may be the best "buyback".