Luxshare Precision Industry, a top Chinese provider of high-precision manufacturing and AI device solutions, made its debut on the Hong Kong Stock Exchange today, marking this year’s largest initial public offering on the exchange. However, the company’s shares declined below their initial offer price during the first day of trading.
The company raised HKD24.3 billion (around USD3.1 billion) with a final issue price of HKD63.28 (USD8.07) per share, completing dual listings in Hong Kong and Shenzhen. Despite this, its Hong Kong-listed shares fell as much as 9.6% during the trading session and closed down 1.5% at HKD62.30 (USD8). In contrast, its Shenzhen-listed stock [SHE: 002475] ended the day up 3.1% at CNY64.40 (USD9.50).
Of the funds raised, 35% will go toward expanding production capacity and upgrading manufacturing facilities. Another 30% will be invested in technological research, development, and enhancing manufacturing processes and smart manufacturing capabilities. Additionally, 15% is allocated to investments in upstream, downstream, or related high-quality assets; 10% will be used to pay off interest-bearing bank loans; and the remaining 10% will support working capital and general corporate needs, according to the prospectus.
Last year, Luxshare reported record profits and revenue. The company’s net profit increased by 24.2% year-over-year to CNY16.6 billion (USD2.4 billion), while operating revenue soared 23.6% to CNY332.3 billion (USD48.9 billion).
Based on last year’s revenue data, the Shenzhen-based firm ranked second globally in the precision intelligent manufacturing solutions market for consumer electronics components and modules, capturing an 11.2% share of the global market, according to the consulting firm Frost & Sullivan.
Revenue from clients other than its largest customer, the U.S. tech giant, Apple, exceeded CNY150 billion (USD22 billion) last year, representing about 43% of total revenue. This marks an approximately 18 percentage point increase from the previous year, indicating a steady reduction in dependence on its top client.
Interestingly, while pursuing its Hong Kong listing, Luxshare also continued buying back shares of its Shenzhen-listed stock. As of June 30, the company had repurchased 17.6 million shares, which accounts for about 0.24% of its total shares, at prices ranging from CNY50.14 (USD7.40) to CNY65, totaling approximately CNY1 billion (USD147 million).