New stock analysis | Luxshare Precision Industry's Hong Kong IPO, a 330 billion manufacturing giant seeks an answer "beyond Apple"

Recently, Luxshare Precision Industry initiated the "A+H" dual listing process through a hearing at the Hong Kong Stock Exchange. For the capital market, this company is not unfamiliar. Starting from the connector business, deeply integrated into the Apple industrial chain, and gradually growing to cover multiple fields such as consumer electronics, automotive electronics, communications, and data centers, Luxshare Precision Industry has witnessed almost the entire industrial upgrading process of China's electronics manufacturing industry over the past twenty years. However, standing at the time node of 2026, the market environment faced by Luxshare Precision Industry is significantly different from a decade ago. The global smartphone industry has entered a mature stage, consumer electronics demand growth is slowing down, and the Apple industrial chain dividend is gradually fully recognized by the market. In this context, the market is more concerned about: when consumer electronics no longer grow rapidly, what can this manufacturing giant with annual revenue exceeding 330 billion rely on to continue to expand? Breaking away from the "fruit chain" label, Luxshare Precision Industry is seeking boundary expansion From the prospectus, Luxshare Precision Industry is attempting to shed the simple market label of "leader in the fruit chain." The company positions itself as a global leader in precision smart manufacturing solutions provider, and views automotive electronics, communications and data centers, and emerging fields such as Siasun Robot & Automation as important growth directions for the future. It is understood that Luxshare Precision Industry initially mainly engaged in the production of connectors and wiring products, belonging to a relatively limited value-added link in the electronic industry chain. Subsequently, through continuous mergers and acquisitions and industry chain extensions, the company has gradually evolved from a component manufacturer to a comprehensive manufacturing platform that can provide system-level solutions. Today, the company's products cover over 500 product categories such as connectors, wiring, acoustic devices, wireless charging modules, structural components, optical products, automotive electronics products, server components, and complete machine systems. The expansion of business boundaries has enabled Luxshare Precision Industry to gradually evolve from a single component supplier to a comprehensive service provider that can participate in the full product lifecycle development for customers. The company's customers include most of the top ten global consumer electronics brands. In addition to consumer electronics, the company has entered into fields such as automotive electronics, communication equipment, and data centers. Especially in the context of rapid development of new energy vehicles, the company has begun to extend to products such as automotive connectors, high-voltage harnesses, smart cabins, and smart driving related products; and driven by the AI wave, data center high-speed connection products, server components, and communication equipment have also become new sources of growth. Currently, Luxshare Precision Industry has established manufacturing and operation networks in mainland China, Vietnam, Singapore, and Hong Kong. The Vietnamese production base has become an important part of the company's global supply chain system. From an industry perspective, the electronics manufacturing services industry has typical economies of scale. Customers tend to choose suppliers with global delivery capabilities, a wide range of products, and strong financial capabilities. For Luxshare Precision Industry, the manufacturing system, customer resources, and global production capacity accumulated over the past twenty years have formed high competitive barriers. Even if the industry growth rate slows in the future, leading companies often continue to achieve growth through market share enhancement. However, scale advantage is a double-edged sword. When a company's revenue reaches a scale of several hundred billion yuan, maintaining high growth becomes increasingly difficult. Realizing the new growth curve, the hundred billion giant still needs to pass the growth test If the market used to be concerned about whether Luxshare Precision Industry could grow, it is now focusing on how long it can continue to grow. From 2023 to 2025, the company's revenue reached 231.9 billion yuan, 268.8 billion yuan, and 332.3 billion yuan respectively, with a cumulative growth of over 43% in two years. During the same period, net profit reached 12.2 billion yuan, 14.6 billion yuan, and 18.2 billion yuan respectively, with a nearly 50% increase in two years. More attention should be paid to the change in sources of growth. In 2023, revenue from consumer electronics business accounted for a high proportion of total revenue at 88.3%. By 2025, this proportion had dropped to 79.5%. During this period, revenue from automotive electronics business increased from 9.25 billion yuan in 2023 to 39.26 billion yuan in 2025, more than three times the increase in two years, and the proportion of total revenue increased from 3.9% to 11.8%; revenue from communication and data center business increased from 14.5 billion yuan to 24.6 billion yuan, with the proportion increasing from 6.3% to 7.4%. This change reflects the shift in the global industrial cycle. In the past decade, smartphones were the largest source of growth in the electronics manufacturing industry. In the next decade, AI servers, new energy vehicles, Siasun Robot & Automation, and smart terminals are expected to become new demand centers. However, compared to revenue growth, the change in profit margin is more worthy of analysis. It is understood that the company's overall gross profit margin was 11.1%, 10.1%, and 11.6% in 2023, 2024, and 2025 respectively, and it remained relatively stable overall. Looking at different businesses, the gross profit margin for consumer electronics business is around 10%; the gross profit margin for automotive electronics business is maintained at over 15%; while the gross profit margin for communication and data centers business increased from 15.5% to 18.1%. This indicates that emerging businesses are becoming an important source of profit margin improvement for the company. However, the market also needs to realize the inherent limitations of the manufacturing industry. Even if the company's revenue reaches 332.3 billion yuan in 2025, the net profit is only 18.2 billion yuan, corresponding to a net profit margin of about 5.5%. In other words, for every 100 yuan of revenue created, the company can only retain about 5 yuan of profit. This means that the company must continue to maintain extremely high operating efficiency. Once there is demand fluctuation, customer order adjustments, or raw material price increases, the profit margin is easily impacted. In addition, customer concentration is still a problem that investors cannot ignore. Although the company has been promoting customer diversification in recent years, the revenue share of the largest customer in 2025 still reached 56.7%, and the revenue share of the top five customers reached 65%. While the dependence has clearly decreased in trend, the absolute values are still at a relatively high level. For large manufacturing enterprises, top customers are not only important sources of performance growth but also potential risks. If core customer product sales decline, supply chain strategies change, or orders shift to other suppliers, the company's performance may face pressure. At the same time, the company's capital expenditure has been maintained at a high level in recent years. By the end of 2025, the company's non-current assets exceeded 110 billion yuan, indicating that it is still in a phase of continuous expansion. Large-scale investment is advantageous for seizing future market opportunities, but it also means that it will take longer to digest the additional production capacity in the future. This listing of Luxshare Precision Industry in Hong Kong is more like a strategic move for a mature industry leader seeking global capital platform support. Its investment logic is no longer solely dependent on the Apple industrial chain. In the coming years, consumer electronics business may still contribute the majority of revenue, but what will truly determine the valuation ceiling is whether automotive electronics and AI-related businesses can grow into new core pillars. If these new businesses continue to deliver, the company has the opportunity to gradually move away from the traditional valuation framework of manufacturing companies; otherwise, if the growth of new businesses falls short of expectations, the market will still see it as a typical cyclical electronics manufacturing company. Therefore, the core focus of Luxshare Precision Industry is no longer "how many orders Apple gives," but whether this Chinese manufacturing giant can find its second growth curve in the era of AI through globalization and industrial chain integration capabilities.