Good News on Listing | Frost & Sullivan Assists Beijing Xunzhong Communication Technology Co., Ltd. in Successful Hong Kong Listing (2597.HK)

Beijing Xunzhong Communication Technology Co., Ltd. (hereinafter referred to as 'Xunzhong Shares') successfully listed on July 9, 2025. The company plans to issue 30.44 million H shares, of which 90% will be international offerings and 10% will be Hong Kong offerings. The maximum selling price per share is HK$15.15, with a maximum net raise of HK$461 million.

During the process of listing in Hong Kong this time, Frost & Sullivan mainly undertook the following tasks: helping the issuer accurately and objectively understand its positioning in the target market, using objective market data to discover, support and highlight the issuer's competitive advantages, assisting the issuer, investment banks and other intermediaries in completing the writing of relevant parts of the prospectus (such as the overview, competitive advantages and strategy, industry overview, business and other important chapters), helping the issuer complete communication with the Hong Kong Stock Exchange and investors, assisting investors in quickly understanding the market ecosystem and competitive landscape, and assisting the issuer in completing feedback on various industry-related issues from the Hong Kong Stock Exchange, etc.

Frost & Sullivan has always been a leader in helping companies go public in Hong Kong. According to LiveReport's big data (statistical data as of June 30, 2025), from January to June 2025, as well as during the past 12 and 36 months, Frost & Sullivan provided listing industry advisory services to 29 (accounting for 71% of the market share), 52 (accounting for 64% of the market share), and 161 (accounting for 69% of the market share) Hong Kong-listed companies through IPOs, ranking first in terms of number, with rich industry experience and communication experience with regulatory authorities, exchanges, investment and financing institutions, and various related agencies.

• The company provides one-stop comprehensive cloud communication services and solutions, covering CPaaS, contact center SaaS, and communication solutions tailored for various user scenarios and vertical industries;

• The company is one of the earliest providers of cloud communication services in China;

• The company is one of the few providers in China capable of offering AI-driven communication services;

• The company has a sustainable business model and has provided cloud communication services for 16 years. Its core business, cloud communication services, is relatively stable and sustainable;

• The company maintains good cooperative relationships with major Chinese telecom operators and other strategic service providers;

• The company continues to focus on research and development. As of December 31, 2024, the company has registered 7 invention patents and 201 software copyrights.

According to the Frost & Sullivan report, in terms of revenue for 2024, the company:

• Ranked third among China's cloud communication service providers;

• It is the largest full-stack cloud communication service provider in China.

Cloud communication services refer to communication services and solutions provided to enterprises and public organizations based on cloud technology. Cloud communication services mainly include (i) CPaaS services, a technology delivery model that enables enterprises to embed omnichannel communication functions into their business systems and applications through APIs or SDKs; and (ii) Contact Center SaaS, which is an efficient intelligent contact center solution primarily deployed as a SaaS offering to enterprises and public organizations. With the continuous expansion of cloud technology applications and the increasing demand for cloud migration from downstream customers, China's cloud communication service market has been growing in recent years. From 2020 to 2024, the total revenue of China's cloud communication service market increased from RMB 355 billion to RMB 503 billion, with a compound annual growth rate of 9.1%. In the future, with the deepening of digital transformation and the continuous expansion of cloud communication application scenarios, China's cloud communication service market is expected to maintain rapid growth. By 2029, the total revenue of China's cloud communication service market is expected to reach RMB 745 billion, with a compound annual growth rate of 8.2% from 2024 to 2029.

Source: Ministry of Industry and Information Technology; Frost & Sullivan analysis

In recent years, China's information technology industry has grown steadily, and communication infrastructure has been continuously improved, providing a solid foundation for the development of the cloud market. The total expenditure on information technology is mainly used for the construction of information technology infrastructure, which increased from RMB 2866.7 billion in 2020 to RMB 3736.1 billion in 2024, with a compound annual growth rate of 6.8%, reflecting the stable development of information technology infrastructure. A stable communication infrastructure is crucial for the development of the cloud communication service market, as it relies on the internet and cloud computing to obtain and process customer data to provide customized communication services.

Cloud technology is a technology that provides software through cloud servers, rather than deploying software within the company's information technology system. Compared to traditional local IT infrastructure, cloud technology has prominent advantages in scalability and flexibility, cost savings, enhanced security and reliability, as well as business continuity. Therefore, the application of cloud technology has gradually expanded in recent years. Although the penetration rate of cloud communication services in China is relatively low, the acceleration of cloud migration in China will drive the rapid development of the cloud communication service market.

With the advancement of enterprise digital transformation, cloud communication services are playing an increasingly important role in both internal and external communications within enterprises. On one hand, comprehensive cloud communication services can meet the diverse communication needs of enterprises at different growth stages; on the other hand, the application scenarios of cloud communication services are continuously expanding from empowering communication capabilities to integrated intelligent solutions, such as online education, telemedicine, and smart cities.

The cloud communication service market in China is relatively fragmented and highly competitive. Based on different service capabilities and main businesses, cloud communication service providers in China can be mainly divided into (i) providers with single service capabilities, focusing on specific types of cloud communication services such as CPaaS services or contact center SaaS; and (ii) full-stack communication service providers, offering comprehensive cloud communication services including CPaaS services and contact center SaaS. In terms of revenue generated from cloud communication services in 2024, the top five cloud communication service providers in China accounted for about 18.8%, with the third-ranked company holding a market share of about 1.8%.

Data source: Annual report; Frost & Sullivan analysis

CPaaS services mainly include: (i) Messaging service, enabling customers to send messages to specified mobile phone numbers; (ii) Voice service, allowing customers to establish solutions for making and receiving calls globally; and (iii) Other services such as mobile data services, IoT SIM cards and data, virtual product recharge, RCS information services, etc. With the development of cloud communication infrastructure and the increasing demand for communication functions from downstream customers, the Chinese CPaaS service market has been growing continuously in recent years. From 2020 to 2024, the total revenue of the Chinese CPaaS service market increased from RMB 335 billion to RMB 448 billion, with a compound annual growth rate of 7.5%. In the future, with further digital transformation of enterprises, continuous expansion of innovative CPaaS services such as cloud communication applications and RCS information, it is expected that the Chinese CPaaS service market will maintain rapid growth. In 2029, the total revenue of the Chinese CPaaS service market is expected to reach RMB 650 billion, with a compound annual growth rate of 7.7% from 2024 to 2029.

Source: Ministry of Industry and Information Technology; Frost & Sullivan analysis

In recent years, China's mobile internet has achieved remarkable development. The number of mobile internet users in China increased from 9.858 million in 2020 to 11.05 million in 2024, with a compound annual growth rate of 2.9%. The penetration rate of mobile internet has also increased from 69.8% to 78.5%. By 2029, the penetration rate of mobile internet in China is expected to reach 90.0%. The growth in the number of mobile internet users has continuously expanded the terminal user base of enterprises and public organizations, thereby stimulating a large demand for enterprise communications (including voice and messaging).

With the continuous advancement of globalization, Chinese enterprises are accelerating their pace of overseas expansion and exploring international markets. As the demand for CPaaS services in overseas countries continues to grow, the global service capabilities of CPaaS will become one of the main development directions for future CPaaS service providers. Such providers will establish cooperative relationships with global telecom operators to obtain global telecom resources, thereby meeting the overseas needs of enterprises in cross-border e-commerce, online social networking, logistics, finance, and other areas.

In recent years, AI technologies such as large language models and machine learning have developed rapidly and are gradually being applied to CPaaS services. Leveraging AI capabilities, CPaaS services are evolving towards a higher level of intelligence, providing downstream customers with more efficient and comprehensive communication solutions. For example, integrating AI technology into the information distribution system of CPaaS can mark information recipients, significantly improving the efficiency of corporate communication.

As of December 31, 2024, there are approximately 400 CPaaS service providers in China. In terms of CPaaS service revenue for 2024, the top five CPaaS service providers in China accounted for about 20.6%, with our Group ranking third, holding a market share of about 1.8%.

Data source: Annual report; Frost & Sullivan analysis

The contact center SaaS solution mainly includes various intelligent features applied to contact centers, such as intelligent text robots, intelligent voice navigation, intelligent service quality inspection and assistance, intelligent call robots, and video assistance. Driven by further improvement in laws and regulations, increasing requirements for customer service response speed, and continuous technological development, the Chinese contact center SaaS market has seen significant growth in recent years. From 2020 to 2024, the total revenue of the Chinese contact center SaaS market increased from RMB 2 billion to RMB 5.5 billion, with a compound annual growth rate of 28.8%. In the future, the total revenue of the Chinese contact center SaaS market is expected to reach RMB 9.5 billion by 2029, with a compound annual growth rate from 2024 to 2029 of 11.6%.

Data source: Analysis by Frost & Sullivan

The application of contact center SaaS has become a new trend in customer service. AI technology will continue to be widely and deeply applied in contact center SaaS. At the same time, contact center SaaS will combine with human customer service representatives to establish a collaborative mechanism, providing better service experiences for end-users. AI technologies such as machine learning will enable human customer service representatives to quickly obtain the necessary information and solutions, thereby effectively improving customer satisfaction.

Data security is an important development direction for the SaaS market in China's contact center industry. As customers' attention to data security continues to grow, contact center SaaS providers have been committed to strengthening the protection of customer data and providing data security guarantees according to different customer needs. For example, contact center SaaS providers offer cloud deployment for customers who are more sensitive about data security through private clouds or virtual private clouds.

The deep integration of technologies such as cloud computing and AI with contact centers has further enhanced the intelligence level of contact centers. Contact center SaaS utilizes general and specialized large language models, and with the help of intelligent text robots, intelligent voice navigation, intelligent service quality detection and assistance functions, it assists human customer service agents. This not only reduces human resource costs but also improves response efficiency. With the continuous development of technology, contact center SaaS is transforming towards AI-driven digital operations and continuously expanding its service scope, thereby promoting the growth of the Chinese contact center SaaS market.