(Yicai) March 13 -- Shares of Glory View Technology surged after the Chinese provider of computing power secured a CNY721 million (USD99.6 million) contract.

Glory View [SHE: 301396] closed 10 percent higher at CNY81.51 (USD11.30) today, after jumping 11.7 percent intraday. The stock has nearly tripled year-to-date.

The provider of smart city solutions won a five-year contract that includes server provision, network infrastructure, and computing services, the Guangzhou-based firm announced yesterday, although it did not disclose the client’s name.

Since last October, Glory View has secured a cumulative CNY2.2 billion (USD302 million) in cloud computing orders, with each announcement triggering significant stock gains.

Glory View expanded into computing services in 2023. However, in the first half of last year, the gross margin for this segment dropped to 12.5 percent, down from 19.6 percent. The company expects to report an annual net loss of CNY45 million to CNY64 million (USD6.2 million to USD8.8 million) for last year.

Industry insiders told Yicai that there are supply shortages of AI computing cards, which are critical for servers, driving up prices. A mutual fund manager noted that the computing power sector appears overvalued in the short term, urging AI infrastructure providers to pay closer attention to their capital expenditures.

While computing orders contribute to revenue growth, many companies are struggling to improve profitability, according to insiders. A securities analyst cautioned that investors should monitor service providers' financial strength and contract fulfillment capabilities, especially regarding large deals.

Several listed cloud service providers, including Lotus Holdings, Jinji Industrial, and Philisense Technology, have recently terminated major compute leasing contracts due to shortages of chips and graphics processing unit servers.

Editor: Emmi Laine