[IPO Decoding] "Fruit Chain" Companies Flock to Hong Kong: Can Luxshare Precision Break Through?
On the map of China's manufacturing industry, the rise of two female entrepreneurs is legendary—$Lens(06613.HK) founder Zhou Qunfei and$LUXSHARE-ICT(002475.SZ) founder Wang Laichun. They began as factory workers at the lowest level and, over thirty years, built their companies into industry giants with market capitalizations in the hundreds of billions.
In 1988, Wang Laichun was an ordinary assembly line worker at Foxconn's Shenzhen factory. Around the same time, Zhou Qunfei, a young woman from Hunan, was still manually polishing watch lenses in a glass processing factory in Shenzhen.
The turning point in their lives often began with the simplest persistence. Zhou Qunfei's dedication to glass craftsmanship made Lens Technology (300433.SZ) a supplier of iPhone glass covers. Wang Laichun also started her own business, turning Luxshare Precision into a core enterprise in Apple's (AAPL.US) supply chain.
Their stories reflect the upgrade path of China's OEM industry—from relying on cheap labor to mastering core technologies and then making a splendid transformation in the capital market.
Lens Technology was listed on the Hong Kong Stock Exchange in early July this year, becoming a dual-listed company on the A-share and H-share markets.
Now, Luxshare Precision is also following suit, having submitted an application for listing on the Hong Kong Stock Exchange. The company plans to raise funds through an IPO in Hong Kong for the following purposes: 1) expanding production capacity and upgrading existing production bases; 2) investing in technology R&D to improve manufacturing processes and enhance smart manufacturing capabilities; 3) allocating funds to invest in high-quality targets in upstream and downstream industries and related sectors; 4) repaying existing interest-bearing bank loans; and 5) working capital and other general corporate purposes.
History of Luxshare Precision
Luxshare Precision was established in 2004, primarily engaged in the production and processing of consumer electronics components.
It was listed on the Shenzhen Stock Exchange in 2010 and entered the communications and automotive electronics business in 2011.
In 2016, it established production bases in Vietnam and other countries, moving toward globalization. In 2019, it expanded its production capacity in Southeast Asia, further improving its global layout.
In 2017, it completed its business layout, achieving vertical integration from core components and modules to complete functional system integration. In 2018, it began providing customers with fully automated solutions. In 2020, it started processing metal structural parts. In 2022, it deepened its layout in the medical equipment field.
In 2024, it acquired Leoni's business, establishing an advantage in the global automotive wiring harness market while strengthening its strategic deployment in Europe, Africa, and the Americas.
In 2025, it acquired Wingtech's ODM business for RMB 676 million (in Chinese yuan, the same below) to consolidate its competitiveness in the customized consumer electronics business. Subsequently, it acquired Wingtech Technology's consumer electronics OEM business and other consumer electronics businesses for a total consideration of RMB 4.389 billion.
Currently, the largest shareholder of Luxshare Precision is Wang Laichun and her brother Wang Laisheng, each holding 50% of Luxshare Limited, which holds a 37.67% stake in Luxshare Precision.
Core Business of Luxshare Precision
Luxshare Precision primarily provides global customers in consumer electronics, automotive electronics, communications, data centers, and other fields with vertically integrated development and manufacturing solutions from precision components and modules to systems.
According to data provided by the research firm Frost & Sullivan, based on 2024 revenue, Luxshare Precision ranks second in the global consumer electronics components and module precision intelligent manufacturing solutions industry, fourth in the global automotive wiring harness precision intelligent manufacturing solutions industry (after merging with Leoni's business), and fourth in the global communication and data center copper interconnection precision intelligent manufacturing solutions industry.
As of July 31, 2025, Luxshare Precision has established 105 production bases, 28 self-owned R&D centers, 94 testing laboratories, and 66 local offices in 29 countries across Asia, Europe, the Americas, and Africa.
However, it is worth noting that despite Luxshare Precision's efforts to expand its business portfolio through mergers and acquisitions, consumer electronics remains its primary source of revenue. As shown in the figure below, from 2022 to 2024, the proportion of revenue contributed by the consumer electronics segment decreased from 89.22% to 86.72%, and further to 83.82% in Q1 2025, but it remains the largest business that significantly impacts its overall revenue growth.
However, the company is expanding into more businesses, achieving rapid growth in automotive electronics, communications, and data centers. It can seize the development opportunities emerging in these industries in recent years, and its vertical integration and intelligent manufacturing capabilities will improve production efficiency and enhance its advantages in the industrial chain.
It has also made significant progress in overseas markets. As shown in the figure below, in 2024 and Q1 2025, the Chinese mainland market accounted for only 16.00% and 17.22% of its total revenue, respectively.
From a financial perspective, Luxshare Precision appears to be performing well. From 2022 to 2024, its non-consumer electronics businesses, such as automotive electronics and communications and data center businesses, accelerated revenue growth, with compound annual growth rates of 49.6% and 19.6%, respectively. In 2022, 2023, and 2024, its return on equity (ROE) remained above 21%.
Potential Risks for Luxshare Precision
Over-reliance on Apple: In 2024 and Q1 2025, revenue from its top five customers accounted for 78.5% and 74.8% of its total revenue, respectively. During the same period, its largest customer, Apple, contributed 70.7% and 64.7% of its total revenue. If Apple relocates its supply chain to the U.S. or if other trade measures targeting the "Apple supply chain" are introduced by Trump, it could have a significant negative impact on Luxshare Precision and other "Apple supply chain" suppliers.
Higher leverage than peers: The company emphasizes that it has the highest ROE among the top five global PIMS (Precision Intelligent Manufacturing Solutions) providers. The financial data indeed supports this, but a closer look may reveal a different interpretation.
We used the DuPont formula to break down Luxshare Precision's ROE and compared it with industry leader$FII(601138.SH) and its parent company, Hon Hai Precision. Luxshare Precision's gross margin is indeed superior, so its net profit margin is 2.75 percentage points and 1.13 percentage points higher than the two giants (2024 performance). However, its leverage ratio is also higher, with total assets being more than three times its shareholders' equity, while Hon Hai Precision and Foxconn Industrial Internet are 2.4 times and 2.1 times, respectively. In terms of asset turnover, Luxshare Precision generates less revenue per unit of assets than the two giants, indicating room for improvement in asset turnover efficiency, as shown in the table below.
Intense industry competition: Its competitors include precision intelligent manufacturing solution manufacturers specializing in consumer electronics, automotive electronics, and communications and data center industries. Among them, Hon Hai Precision and Foxconn Industrial Internet have deeper roots in this industry and closer relationships with suppliers. If Luxshare Precision cannot maintain its competitiveness, it may face challenges.
Too many "Apple supply chain" companies listing recently, valuations may not be ideal: Lens Technology was listed in Hong Kong in early July this year. Although its current price of HKD 23.14 is still higher than its IPO price of HKD 18.18, it is still at a 16.90% discount to its A-share price of RMB 25.62 (data from Tencent's self-selected stock app).
In addition to Lens Technology and Luxshare Precision, Will Semiconductor (603501.SH), formerly known as OmniVision, is also planning to list in Hong Kong. Furthermore, Goertek (002241.SZ) will spin off assets for a Hong Kong listing. This may lead to "aesthetic fatigue" in Hong Kong's already crowded IPO market this year, making it difficult to obtain ideal valuations.
Conclusion
From factory assembly lines to a listing on the Hong Kong Stock Exchange, the entrepreneurial stories of Wang Laichun and Zhou Qunfei bear witness to the transformation and upgrading of China's manufacturing industry.
Luxshare Precision's upcoming IPO in Hong Kong is a key step in its global expansion and also reflects the opportunities and challenges faced by China's "Apple supply chain" companies.
With consumer electronics contributing over 80% of its revenue, Luxshare Precision has shown its determination to diversify its business through acquisitions in new sectors such as automotive electronics and communications. However, its high reliance on Apple's supply chain, high financial leverage, and intense industry competition remain challenges it must address.
As more "Apple supply chain" companies list in Hong Kong, whether Luxshare Precision can win market favor with its vertical integration advantages will be a new test for this company that started as a contract manufacturer.
Author: Mao Ting
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