Hello, I'm Lu Xian. I research the investment field and share overseas information.

The previous post shared about Ruwei Technology. Today, let's look at an electronic measurement instrument company going for an A-share to Hong Kong listing - Rigol Technologies. The company mainly produces oscilloscopes, RF instruments, and test solutions. The focus is on the nearly 46% A/H discount, cornerstone lock-up, and the issue of consecutive profit declines.

1. New Share Issuance Overview

Company Name: Rigol Technologies Co., Ltd. (00537.HK)

Global Offering Size: 24.8022 million H shares

Hong Kong Public Offering Size: 2.4803 million shares

International Offering Size: 22.3219 million shares

Maximum Issue Price: HK$45.98

Board Lot: 100 shares

Minimum Subscription Fee: HK$4,644.37

Cornerstone Investors: 7 in total, accounting for approximately 42.11% of the global offering at the upper price limit

Greenshoe: None

Sponsor: CITIC Securities

Reallocation Mechanism: Mechanism B

Subscription Period: June 30 - July 6

Allotment Results Announcement: July 7

Grey Market Trading Time: July 8, 16:15-18:30

Listing Date: July 9

Market Capitalization: Approximately HK$10.055 billion

Group A Tail: 1,000 board lots

Group B Head: 2,000 board lots

Top Hammer: 12,401 board lots

2. Company Fundamental Analysis

Rigol Technologies mainly produces electronic measurement instruments used to measure and analyze electrical signals. Products include digital oscilloscopes, microwave RF instruments, DC precision instruments, modular instruments, and industry solutions. Customers cover communications, new energy, semiconductors, and education/research.

Based on 2025 revenue, the company is China's largest supplier of electronic measurement instruments, ranking eighth globally with a 1.2% market share; ranking sixth in the Chinese market with a 1.9% market share. The RIGOL brand covers over 90 countries and regions, serving more than 100,000 end customers.

From 2023 to 2025, company revenue was RMB 671 million, RMB 776 million, and RMB 900 million, respectively, with growth of 15.7% in 2024 and 16.0% in 2025. Net profit for the same period was RMB 108 million, RMB 92.3 million, and RMB 86.08 million, respectively. Revenue continued to grow, but profits declined for two consecutive years.

Gross margins were 53.4%, 54.9%, and 52.8%, respectively. The 2025 gross margin decline was mainly related to the ramp-up of the Malaysian factory, increased raw material costs, and price reductions for some products. R&D expenses increased from RMB 143 million to RMB 226 million, accounting for 25.1% of revenue in 2025, also compressing profits.

Digital oscilloscopes are the largest business, contributing RMB 400 million in revenue in 2025, accounting for 44.5%. The company's overseas revenue accounts for 35.2%, with the US accounting for 11.1%, but it also faces tariffs, export controls, and exchange rate fluctuations.

In Q1 2026, revenue was RMB 232 million, a year-on-year increase of 38%; net profit was RMB 23.2 million, a year-on-year increase of over five times; gross margin improved from 52.7% to 55.5%.

The company's asset-liability ratio is only 2.8%, and operating cash flow in 2025 was RMB 85.31 million, indicating low financial pressure. However, inventory turnover days rose to 255 days, and inventory impairment needs attention.

In terms of valuation, based on the maximum issue price and the average closing price of A-shares over the past five trading days, the company's total market capitalization is approximately HK$17.547 billion. H-shares are discounted by nearly 40% compared to A-shares. Roughly calculated based on 2025 net profit, the P/E ratio exceeds 170 times, which is not cheap.

3. IPO Subscription Analysis and My Action

For this batch of 15 new shares, the specific capital allocation is posted on the community. Rigol's advantages are that it is already profitable, revenue maintains growth, and Q1 2026 saw simultaneous improvement in revenue, profit, and gross margin. Its fundamentals are more solid than new shares relying solely on concepts.

The issuance structure is good. The 7 cornerstone investors include HHLR, CPE Hemlock, Suzhou State-owned Assets, Sungrow Power Hong Kong, and CITIC-Prudential Fund, etc., collectively locking up 42.11% of the global offering. CITIC Securities is the sole sponsor. The initial Hong Kong public offering is about 24,800 board lots, with a board lot subscription fee of about HK$4,600.

The main attraction remains the A/H discount. The nearly forty percent price difference provides some cushion.

The downsides are the company's not-insignificant total market cap, consecutive historical profit declines for two years, and a clearly high valuation. The company has no greenshoe, lacking price stabilization arrangements after listing. Overseas business will also be affected by tariffs and export controls.

Overall, Rigol's fundamentals, cornerstones, and A/H discount are supportive. Although the valuation is high and profits have declined, improvement has already appeared in Q1 2026, giving it strong short-term appeal.

My action: Subscribe.

$RIGOL(00537.HK)