Ulanqab UCloud Chengfeng Erjin Data Service Co., Ltd. (the "new company") was recently established with a registered capital of RMB 10 million. Its business scope covers data processing, cloud computing, artificial intelligence and other fields.

Meanwhile, UCloud's revenue for the first three quarters of 2026 grew 29.67% year on year, with AI-related revenue accounting for more than 40%, and net profit attributable to the parent company turned positive.

From traditional cloud computing to AI computing power services, the business structure of this STAR Market-listed company is undergoing a shift.

Another Move in Ulanqab

The new company's business scope includes data processing and storage support services, big data services, cloud computing equipment technology services, AI hardware sales and AI public data platforms.

In terms of equity, the new company is jointly held by Beijing UCloud Technology Co., Ltd., a wholly-owned subsidiary of UCloud, and Hangzhou Chengfeng Erjin Computing Infrastructure Management Co., Ltd., with shareholding ratios of 51% and 49%, respectively.

Judging from its business scope, the establishment of the new company is closely tied to the intelligent computing infrastructure business UCloud is advancing. However, available information is insufficient to show that the company has secured specific computing power orders or will directly undertake new data center construction projects.

In fact, Ulanqab has long been a key region in UCloud's computing infrastructure layout.

The data centers the company has built locally have been commissioned one after another. According to its 2026 semi-annual report, as of the end of June, Buildings A, B and C of the Ulanqab Data Center and some computer rooms in Building G had been put into operation; the self-built 110 kV substation had completed acceptance and been connected to power for production; and Building D was advancing with subsequent construction.

Ulanqab's location and energy conditions are important factors attracting computing power enterprises.

As a key carrying area of the Beijing-Tianjin-Hebei hub under China's "East Data, West Computing" initiative, the region can accommodate computing power demand from Beijing-Tianjin-Hebei and other regions. At the same time, its relatively low average annual temperature helps reduce cooling energy consumption in data centers, and the surrounding wind and solar resources also provide conditions for developing green computing power.

For UCloud, the establishment of the new company is not about entering a new market from scratch, but about further improving its local business layout on the basis of existing data centers.

AI Business Accounts for 40%

Founded in 2012 and listed on the STAR Market in 2020, UCloud is one of China's earlier listed third-party cloud computing service providers.

Unlike cloud computing giants that developed on the back of huge internet ecosystems such as e-commerce and social networking, UCloud has long emphasized its neutral third-party positioning and mainly provides enterprise customers with computing, storage, networking and related technical services.

Its products cover cloud hosting, object storage, databases, container services and GPU computing power, serving customers in industries such as the internet, media, finance, manufacturing and artificial intelligence.

In recent years, with growing demand for large model training, inference and AI applications, UCloud has continued to expand investment in its intelligent computing business, and AI-related revenue has become an important growth driver.

In the first three quarters of 2026, UCloud achieved operating revenue of RMB 1.591 billion, up 29.67% year on year; net profit attributable to the parent company was RMB 24.8307 million, turning positive from the same period last year.

Revenue for the third quarter alone was RMB 610 million, up 39.79% year on year; net profit attributable to the parent company was RMB 16.7534 million, also turning positive year on year.

More notably, UCloud disclosed that AI-related revenue accounted for more than 40% in the first three quarters of 2026. Based on a rough calculation using revenue for the same period, AI-related revenue exceeded RMB 600 million.

However, AI-related revenue covers a wide range of businesses and cannot simply be equated entirely with GPU computing power leasing revenue. Its profitability still needs to be analyzed in conjunction with the revenue structure of different products.

In terms of gross margin, UCloud's consolidated gross margin for the first three quarters reached 28.32%, up 3.57 percentage points year on year; gross margin for the third quarter was 28.26%, up 3.89 percentage points year on year.

UCloud said steady growth in cloud computing product revenue, together with the gradual commissioning and racking of intelligent computing center resources, drove an increase in IDC and AIDC business revenue.

Operating cash flow also improved. In the first three quarters of 2026, net cash flow from operating activities reached RMB 123 million, up 30.81% year on year.

However, UCloud's non-recurring net profit attributable to the parent company for the same period was only RMB 1.1175 million, indicating that although the main business has approached break-even, sustainable profitability still needs to be further consolidated.

For UCloud, AI is no longer just a new business direction—it is substantively changing its revenue structure. But to continuously convert growth into profit, the company still needs to improve resource utilization efficiency and returns per unit of computing power.

Computing Power Expansion Faces Tests

From an industry perspective, AI applications are extending from large model training to inference, agents and enterprise deployment, and computing power demand is constantly evolving.

For cloud service providers, customers need not only GPUs but also supporting capabilities such as networking, storage, computing power scheduling and application deployment.

UCloud has begun to extend from traditional cloud computing resource supply to comprehensive intelligent computing services.

Its self-developed "Kongming" intelligent computing platform and UPFS file storage platform can provide technical support for model training, inference and computing power resource scheduling.

At the same time, self-built data centers are also providing a foundation for business growth.

According to UCloud's disclosure, as of the end of June 2026, the cabinet utilization rate of the Ulanqab Intelligent Computing Center had exceeded 95%, indicating a relatively high level of use of existing computing infrastructure.

However, high cabinet utilization does not equal GPU computing power utilization, nor does it necessarily mean that the entire project has achieved an ideal return on investment.

For intelligent computing centers, customer leasing scale, contract term, electricity costs, equipment depreciation and capital costs all directly affect final profitability.

It is worth noting that in March 2026, UCloud had planned to raise no more than RMB 1.5 billion through a private placement for the construction and operation of the Ulanqab Intelligent Computing Center and intelligent computing cluster projects.

This raised funds accounted for 82.6% of the total project investment and was the project's main source of funding.

The project planned to build a high-density intelligent computing center and equip some high-performance AI servers to provide customers with services such as high-power cabinets, intelligent computing power and general computing power.

However, in September 2026, UCloud announced the termination of this private placement and withdrew the application documents due to factors including the macroeconomic environment, capital market environment and the company's actual situation.

This change means that subsequent construction of the project will need to rely on its own or self-raised funds.

In addition, the first phase of UCloud's Qingpu data center project had previously been postponed to 2028, and the benefits of some earlier projects have not yet met expectations.

How the new project construction and financing arrangements will be connected remains an issue to be observed in the future.

Industry competition also cannot be ignored.

The domestic AI computing power market includes large internet cloud vendors, telecom operators, data center companies and professional intelligent computing service providers. As computing power supply continues to increase, service providers must not only win customers but also build advantages in price, network performance, stability and service capabilities.

UCloud's opportunity lies in leveraging its neutral third-party positioning, self-built data centers and diversified computing power service capabilities to meet enterprises' differentiated AI deployment needs.

The establishment of a new data service company in Ulanqab this time provides a new organizational carrier for further developing local business. However, a registered capital of RMB 10 million does not represent the actual investment scale, nor can it be directly equated with new computing power revenue.

Judging from the first three quarters' results, UCloud's revenue has maintained growth, AI-related revenue accounts for more than 40%, overall gross margin continues to improve, and positive changes have appeared in its business transformation.

However, turning net profit attributable to the parent company positive is only a phased milestone. Whether it can sustain profitability in the future still depends on the input-output efficiency of new computing power projects and whether AI customer demand can be converted into stable operating cash flow.

From selling cloud computing resources to providing AI computing infrastructure, UCloud's business is upgrading. Whether the new layout in Ulanqab can become a new source of profit still needs answers from orders, utilization rates and actual returns.