New Stock Interpretation | Reassessing the Valuation of "A+H" Stocks: The Value Resilience of Fibocom Wireless Inc. (300638.SZ) in the Emerging Growth Cycle of Edge AIoT

In the current wave of AIoT, the capital market's pursuit of core assets related to "connectivity" and "intelligence" has never stopped. Behind the daily interactions with every smart car, laptop, and smart speaker device hides countless tiny but crucial components as support, invisibly penetrating into every aspect of life. Recently, Fibocom Wireless Inc., a global leading provider of wireless communication modules, took a crucial step towards its grand "A+H" dual-listing blueprint after years of being listed on the A-share Growth Enterprise Market (stock code: 300638.SZ) by passing the hearing for listing on the Main Board of the Hong Kong Stock Exchange. From wireless communication modules to AI modules, 60% of revenue comes from overseas It is understood that Fibocom Wireless Inc. is the world's second-largest provider of wireless communication modules, with a market share as high as 15.4%, and leading positions in multiple high-growth segments: For example, in the field of smart homes and consumer electronics (such as tablets, laptops), the company has the highest global market share, especially in the consumer electronics sector, with a market share of up to 75.9%; in the automotive electronics sector, the company ranks second in the world, thanks to the surge in demand for high-reliability modules in the new energy vehicle front-loading market. In particular, in comparison with peers, the globalization of Fibocom Wireless Inc. is its most prominent label. The company generates as much as 60% of its revenue from overseas markets, allowing the company to effectively diversify the risks of policies and economic cycles in a single country or region, and ensure that its technical standards and product certification systems are synchronized with global mainstream markets. This global business structure not only brings economies of scale to the company but also significantly enhances its international brand recognition and supply chain bargaining power, key to building deep business barriers. Financially, Fibocom Wireless Inc. demonstrates revenue resilience matching its global market position. According to the prospectus, from fiscal year 2022 to 2024, the company's continued operating revenue steadily increased from RMB 5.203 billion to approximately RMB 6.971 billion, with a compound annual growth rate of over 14%. During the same period, the company's continued operating net profit also increased from RMB 352 million to RMB 423 million, demonstrating its ability to maintain a profitable scale in market fluctuations. At the same time, it is also necessary to take a cautious look at the company's latest operational data. In the first four months of 2025, the company reported a year-on-year decline in total revenue and net profit attributable to equity holders, mainly due to the accounting treatment of Realink Wireless (accounting treatment). Excluding this impact, the company's core business revenue actually increased by 23.49% year on year, and net profit attributable to equity holders increased by 6.54%, showing strong growth momentum in its core business. In addition, in terms of business structure, Fibocom Wireless Inc. has completed the upgrade iteration from basic data module to smart module and AI module, building a "three-module" product matrix. It is worth noting that in the first four months of 2025, the revenue share of smart modules was as high as 61.3%. Smart modules, integrated with application processors and operating systems, can provide edge computing and multimedia functions, with higher added value and average selling prices (ASP) than traditional data modules. The optimization of this product structure is an important driver for the company to steadily expand its profit scale. This evolution of the business allows Fibocom Wireless Inc. to break away from the low-profit predicament of traditional hardware businesses and seize more profitable market opportunities. According to Frost & Sullivan's forecast, the global edge AI market is expected to expand at a compound annual growth rate as high as 39.6% between 2025 and 2029, making Fibocom Wireless Inc. one of the major beneficiaries of this blue ocean market. Financially robust but challenges remain, "A+H" platform assists in global expansion Fibocom Wireless Inc.'s decision to pursue an "A+H" listing this time is not only driven by financing needs but also by deeper strategic considerations for global strategies and future development. The core value of the A+H strategy lies in resource integration and internationalization acceleration. In the A-share market, the company can fully connect with China's vast resources in the IoT industry and enjoy the policy dividends in areas such as connected vehicles and 5G. Through the Hong Kong stock platform, Fibocom Wireless Inc. can more conveniently and efficiently attract international capital, providing funding support for overseas mergers and acquisitions, global customer expansion, and high-intensity investments in cutting-edge technologies such as 5G-A and AI. This dual capital market endorsement will significantly enhance the company's global brand image and capital operation flexibility, clearing obstacles for its future global expansion. Currently, Fibocom Wireless Inc.'s growth engine has shifted from basic connectivity to AIoT empowerment. The company clearly stated that it will actively deploy end-side AI solutions and Siasun Robot & Automation solutions in the future, launch AI modules, and is one of the first manufacturers globally to launch such products. This means that Fibocom Wireless Inc. is no longer just a hardware provider but is transforming into a comprehensive solution provider offering "modules + edge computing capabilities + AI applications." As of the end of April 2025, 67.9% of the company's employees are R&D personnel, reflecting its determination to invest in technology, which is the guarantee of whether it can continue to maintain its industry-leading position in the future. It is understood that the wireless communication module industry currently presents a layered and highly concentrated competitive landscape, with the top five companies globally accounting for 76.1% of the market share, including Quectel, Sierra Wireless, etc., all with strong strengths. At the same time, the rapid iteration of communication technologies such as 5G-A, satellite IoT, places high demands on the company's R&D investment and speed to market. Any misjudgment in technology choices or a long certification cycle could erode market share. Furthermore, it is noteworthy that in 2024, the top five customers contributed 58.3% of revenue, while the top five suppliers accounted for 79.3% of sales costs. This highly concentrated structure means that any changes in key customer or supplier relationships could have a significant impact on the company's operating performance. According to the latest financial report data, the year-on-year decline in gross profit margin in the first four months of 2025 was due to fluctuations in the prices of storage chips. Despite the company's large scale, the essence of the module industry is downstream integration. Fibocom Wireless Inc.'s reliance on key materials such as baseband chips, storage chips is objectively present. The sharp fluctuations in future material prices may directly affect the company's short-term profit capabilities. Conclusion Overall, despite the challenges of supply chain volatility and technological iteration, for institutional investors with a long-term vision seeking to allocate high-growth quality targets in the global IoT space, Fibocom Wireless Inc.'s "A+H" dual identity and its strategic position in enabling smart hardware at the foundation make it a worthwhile investment target worthy of in-depth research and careful evaluation. The market will ultimately measure its continued profitability and the certainty of its future growth through pricing.