On April 27, Deutsche Bank released a research report on Xunce Technology (03317). It set a target price at HK$351, implying an upside of over 20% to the prevailing market price, and reaffirmed a "Buy" rating.

Founded in 2016, Xunce Technology has completed seven financing rounds to date, with shareholders including Tencent, KKR, Yunfeng Fund, Taikang Life and SPD Bank. Its valuation has surged more than 530 times since the Series A round, marking a remarkable victory for long-term institutional investors that have backed Xunce for nearly a decade.

Yet these top-tier institutions are betting on more than a single company. They are positioning for a fast-evolving megatrend - the token economy.

The core of the token economy lies in shifting the billing basis from "software access" to "value consumption". Under the traditional SaaS model, as clients pay fixed subscription fees, vendor’s revenues are not linked to the actual value delivered. The token model bills based on usage: higher consumption and value creation amplify vendor’s revenue.

Driven by the evolution of AI agents, token demand will grow exponentially. According to Frost & Sullivan, China’s real-time data infrastructure and analytics market reached RMB 18.7 billion in 2024 with a penetration rate of merely 3.6%, and is projected to hit RMB 50.5 billion by 2029 at a 22% CAGR. In this highly underpenetrated market with booming demand, Xunce secures a leading foothold in the AI real-time data infrastructure market.

What role does Xunce play amid this trend? Deutsche Bank defines Xunce as a "data fuel supplier" and "billing center". Being a “data fuel supplier” suggests that, unlike general large language model developers, Xunce focuses on vertical sectors, leveraging domain-specific data expertise to deliver highly accurate data to support decision-making for enterprises. “Billing center” represents the core of Xunce’s business model: billing every AI call as a critical toll station in the token economy era.

Deutsche Bank noted that this vertical Token-as-a-Service (TaaS) model grants Xunce a unique premium, decoupling its revenue from general computing costs and driving its non-linear growth alongside clients’ business workflow expansion. Xunce is building its token pricing system across three dimensions: data scarcity, call frequency and modular scalability.

Xunce currently offers three monetization models: traditional subscription, transaction-based billing, and the fast-scaling token-based billing. Management revealed that token-driven revenue now accounts for roughly 5% of total revenue, with a target of 20%-30% by the end of 2026. In April 2026, annual recurring revenue (ARR) from token usage surged 300% quarter-on-quarter, proving token services have become Xunce’s new growth engine.

Deutsche Bank forecasted that as the shift advances, Xunce’s adjusted net profit margin will rise from 6.9% to 24.4% between 2025 and 2028, with its revenue CAGR estimate being upgraded from 57% to 76%. The next three years will be a critical window for Xunce to unlock accelerated profit growth.

Started with the asset management sector, Xunce has expanded into highly regulated sectors demanding strict data accuracy and compliance, including insurance, banking, energy and telecommunications. On the one hand, high switching costs sustain the stickiness of its existing clients. On the other hand, Xunce’s footprint extends to more than 10 sectors, such as finance, telecoms, power, energy and consumption. Compared with Palantir’s 17 vertical sectors in the U.S., Xunce still boasts substantial upside for expansion.

Moving forward, Xunce is accelerating its expansion into key livelihood-related sectors including power, telecoms, healthcare, energy and robot training platforms. Starting from 2025, it further extends its AI infrastructure business into emerging sectors such as robotic data platforms and commercial aerospace.

In the AI era, the real money is made not by the gold diggers, but by the shovel sellers. Those who upgrade basic shovels into "intelligent excavators" stand to earn the most reliable returns. And Xunce is emerging as one of them. As token becomes the fundamental currency of the AI world and every model call runs through billing centers, Xunce’s revenue will be deeply tied to the prosperity of the entire AI industry.