"Hong Kong Stock IPO Watch" Overseas revenue supports 70% of the market! XREAL rushes to go public, waiting to be the "first smart glasses stock"

Questioning AI · What are the key driving factors behind XREAL’s stealthy IPO rush?

Our reporter (chinatimes.net.cn), Shi Feiyue, Beijing report

Without warning, XREAL quietly initiated the listing process. On the evening of April 1st, the Hong Kong Stock Exchange disclosed the company’s prospectus. If all goes smoothly, XREAL will earn the title of “First Stock in Smart Glasses.” Notably, this company is also the earliest among the “Chinese AR Four Little Dragons” to take steps toward going public. Although still in a loss-making state, XREAL’s overall financial data is relatively healthy, and its losses are gradually narrowing.

Currently, it appears that the biggest obstacle XREAL faces is its small overall size and limited revenue scale, which also means that the industry’s overall trend will have a crucial impact on its future development. However, XREAL remains confident in the market prospects of AR glasses, stating in its prospectus that as optical technology, hardware performance, and multimodal interaction capabilities continue to improve, the market share of AR glasses is expected to grow significantly.

Revenue Growth and Narrowing Losses

XREAL, along with Thunder Bird Innovation, Rokid, and Yingmu Technology, is known as the “Chinese AR Four Little Dragons.” However, before the prospectus was disclosed, there was almost no news of XREAL’s IPO, whereas Rokid just completed a share reform last month.

“The reason XREAL is rushing to go public first mainly lies in its higher level of globalization and commercialization, as well as more mature financial data; plus, the AR category itself is relatively simple with limited imagination space. XREAL has already secured substantial funding before, and now it’s time to shift to the secondary market,” said Wang Chao, founder of Wenyuan Think Tank, to Huaxia Times.

Additionally, during recent conversations with industry insiders, Huaxia Times learned that the smart glasses track itself is niche, with limited IPO windows, and companies that start slowly may have slim chances. This might also be a key reason for XREAL’s early move.

As for why they chose the Hong Kong stock market, Wang Chao believes it is because, compared to the STAR Market, the listing conditions are more lenient, and XREAL’s main market is overseas. According to the prospectus, from 2023 to 2025, the company’s revenue from overseas markets will account for 65.3%, 65.9%, and 71% of total revenue, respectively.

According to iResearch data, from 2022 to 2025, XREAL ranks first globally in sales revenue in the AR glasses market each year; based on sales revenue in 2025, XREAL ranks second in the global smart glasses market, including AR glasses and non-display glasses, and first in China.

The prospectus shows that XREAL’s revenue for 2023–2025 will be 390 million yuan, 394 million yuan, and 516 million yuan; gross profit will be 73.32 million yuan, 87.30 million yuan, and 181 million yuan, showing an upward trend each year.

Unlike other manufacturers, XREAL focuses on AR and has been observing the AI glasses track, which is currently popular. The company’s founder, Xu Chi, also stated last year that the experience of AI glasses still needs refinement, and they haven’t generated enough stickiness for daily wear. XREAL will not launch AI glasses in the short term (last year).

On April 2nd, a relevant person from XREAL responded to this reporter, saying that regarding AI glasses, the company has always maintained continuous attention and technological investment. The previous statements were mainly based on the maturity of the technology and product rhythm at that time. “Currently, the integration of AI and spatial computing is deepening gradually. The company is also continuously advancing technological exploration and product planning in this area. However, in terms of specific product launch pace, we will consider user experience maturity, application scenario development, and overall product stability. Overall, the company will steadily promote related layouts while ensuring product experience and technological reliability, and will launch market-facing products at the appropriate time.”

However, since the overall revenue scale is still small, coupled with R&D and sales investments, XREAL is still in a loss stage. Fortunately, losses are narrowing. From 2023 to 2025, the company’s losses will be 882 million yuan, 710 million yuan, and 456 million yuan; adjusted net losses are 437 million yuan, 375 million yuan, and 250 million yuan, with gross profit margins increasing from 18.8% to 35.2%.

High-Priced Products Need to Fill the Gap

The small revenue scale and ongoing losses are largely related to the overall development of the AR market. Compared to smartphones, AR remains a relatively niche category.

But XREAL remains optimistic about the industry’s overall development, citing iResearch data in its prospectus. iResearch predicts that global AR glasses sales will increase from about 800k units in 2026 to approximately 22.2 million units in 2030, with a compound annual growth rate of 130.9%.

“We possess independent R&D capabilities, including self-developed X-Prism optical engine, X1 side-side co-processor, high-performance spatial perception algorithms, and NebulaOS. Coupled with our position as the leading global AR glasses brand, which has maintained the top sales position from 2022 to 2025, this allows us to capture a higher market share in the next growth phase,” XREAL stated.

The reporter noted that XREAL’s main products are priced reasonably. For example, the average selling price in 2025 is 3,196 yuan for the One series, 1,656 yuan for the Air series, and 3,665 yuan for the Light-Ultra-Aura series. This pricing, objectively, may also be a factor limiting overall revenue and profit growth, considering mainstream high-end smartphones can cost over ten thousand yuan.

A relevant XREAL executive told this reporter that as an innovative consumer electronics category, AR glasses differ significantly from mature markets like smartphones in development stages. The industry is still in the user cultivation and scene expansion phase, so product pricing needs to balance user acceptance and long-term development.

“From our perspective, our product mix is mainly mid-to-high-end, with an average selling price relatively high in the industry. We are also continuously upgrading products and iterating technology to optimize the overall pricing system. In the future, as our product matrix further improves, especially with ongoing high-end product deployment, we expect to enhance user value and further optimize revenue structure and profitability,” said the executive.

Wang Chao also pointed out that the relatively low unit price of XREAL’s AR glasses is driven by the goal of capturing market share and educating the market. “In the future, the price increase of this category probably won’t be as smooth as smartphones. Instead, it will likely experience a high-value leap from hardware proliferation to ecosystem maturity. If AR glasses become a necessity rather than just a cool gadget, then a consumer product costing over ten thousand yuan could truly emerge.”

This situation may see a change around 2026. Project Aura, XREAL’s next-generation flagship product powered by Google Gemini multimodal AI model and Android XR platform, was first unveiled at Google I/O in May 2025 and is planned for mass production in 2026. This is likely XREAL’s trump card product, possibly with a higher price point.

Additionally, XREAL could leverage Google’s ecosystem for greater market endorsement. In January this year, Google and XREAL announced a deeper, longer-term strategic partnership. Beyond Project Aura, Google will work with XREAL to promote Android XR applications in future AR glasses products and further expand the AndroidXR developer support ecosystem.

Editor: Huang Xingli Chief Editor: Han Feng