[HK IPO] Luxshare Precision, the A-share consumer electronics leader, is listing in Hong Kong. Is the discount enough?
Hello, I'm Lu Xian. I research the investment field and share overseas information.
Last time I shared about Jiangxi Bio, today let's look at a leading consumer electronics company from the A-share market going public in Hong Kong – Luxshare Precision. The company has been listed on the A-share market for many years, with consumer electronics as its core business, while expanding into automotive electronics and data centers. This issuance is very large, with a focus on the A/H discount, cornerstone investor lock-up, and post-listing capital absorption.
1. Overview of the New Share Issuance
Company Name: Luxshare Precision Industry Co., Ltd. (02475.HK)
Global Offering Size: 383.4728 million H shares
Hong Kong Public Offering Size: 38.3473 million shares
International Offering Size: 345.1255 million shares
Maximum Offer Price: HK$63.28
Board Lot: 100 shares
Minimum Subscription Fee: HK$6,391.82
Cornerstone Investors: 35 in total, subscribing for approximately 48.43% of the Global Offering at the maximum offer price
Greenshoe: Yes
Sponsors: CITIC Securities, Goldman Sachs, CICC
Reallocation Mechanism: Mechanism B
Subscription Period: June 30 – July 6
Allotment Announcement: July 7
Grey Market Trading: July 8, 16:15-18:30
Listing Date: July 9
Market Capitalization: Approximately HK$487.366 billion
Group A Tail: 700 lots
Group B Head: 800 lots
Top Hammer: 191,736 lots
2. Fundamental Analysis of the Company
Luxshare Precision primarily provides precision manufacturing solutions for consumer electronics, automotive electronics, communication, and data center customers. Products include components, modules, and full systems.
In 2025, consumer electronics accounted for 79.5% of revenue, still the company's main business; automotive electronics accounted for 11.8%, communication and data centers accounted for 7.4%. Compared to relying solely on smartphone assembly, the company is expanding into areas like automotive, servers, power supplies, and thermal management, but the new businesses have not yet replaced the position of consumer electronics.
From 2023 to 2025, the company's revenue grew from RMB 231.905 billion to RMB 332.344 billion, and net profit grew from RMB 12.243 billion to RMB 18.170 billion. In 2025, the gross margin was 11.6% and the net margin was 5.5%. The scale is large, and revenue and profit can still maintain growth, but precision manufacturing itself has low profit margins, and profitability relies on order scale, yield rate, and cost control.
In Q1 2026, the company's revenue was approximately RMB 83.9 billion, a year-on-year increase of 35.8%; net profit attributable to the parent was approximately RMB 3.7 billion, a year-on-year increase of 20.2%. Revenue growth is higher than profit growth, indicating continued business expansion, but the improvement in profit margin is not significant.
The company's biggest risk remains customer concentration. In 2025, the largest customer contributed 56.7% of revenue. Although this has decreased from the past, more than half of the revenue still comes from a single customer. Changes in major customer orders, product cycles, or supply chain strategies will directly impact performance.
Automotive electronics and data centers are the main future growth drivers. Especially after the increase in AI server power consumption, demand for liquid cooling, power supplies, and high-speed connection products has increased. However, the communication and data center business only accounted for 7.4% of revenue in 2025, and is not enough to change the company's overall business structure in the short term.
In terms of valuation, based on the maximum offer price, the company's market capitalization is approximately HK$590.584 billion. Roughly calculated based on 2025 net profit, the P/E ratio is about 28 times. This valuation is not cheap, but considering the company's scale, industry position, and growth rate, it is not significantly outside the valuation range of large consumer electronics leaders.
The prospectus uses the average closing price of the A shares in the five trading days prior as RMB 67.28, equivalent to approximately HK$77.38. The maximum H-share offer price of HK$63.28 represents a discount of about 18% compared to the A shares. This is the main support for this IPO subscription, but if the A shares fall significantly during the offering period, the discount will also narrow accordingly.
3. IPO Subscription Analysis and My Operation
The specific capital allocation for these 15 new stocks is on the Planet. Luxshare Precision's advantages are clear. The company has been profitable for many years, with revenue and profit still growing, high market recognition, and does not need to prove its business model to investors again.
The cornerstone investors collectively subscribed for approximately US$1.5 billion, locking up about 48.43% of the offered shares at the maximum price. The list includes sovereign wealth funds, long-term institutions, and large asset management companies, with the lock-up ratio close to the regulatory upper limit. The offering also has a greenshoe, with CITIC Securities, Goldman Sachs, and CICC as joint sponsors, making the overall configuration relatively strong.
The main issue is the huge size. Calculated at the maximum price, the fundraising size exceeds HK$24 billion, and the total market capitalization is close to HK$500 billion. The initial Hong Kong public offering is about 383.5 thousand lots, which is not a small-cap stock with scarce supply. To achieve a very high increase after listing, a large amount of capital absorption is needed.
Overall, Luxshare Precision has solid fundamentals and cornerstone investors, but the main issue is the mediocre discount, making it unlikely to see exaggerated gains from small-cap speculation. This makes Luxshare somewhat of a dilemma—it's okay not to subscribe, but you can subscribe if you have spare cash.
My operation: Subscribe.
$LUXSHARE ICT(02475.HK)
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