Hong Kong's largest IPO of the year makes an awkward debut, with the $68 billion 'Apple supply chain leader' falling below its offer price
(This article was authored by Radar Finance and published by TMTPost with permission)
By Radar Finance, Author: Ding Yu, Editor: Meng Shuai
On July 9, Luxshare Precision, dubbed the 'Apple supply chain leader,' officially listed on the Hong Kong Stock Exchange, successfully completing its dual A+H capital market strategy.
According to reports, Luxshare Precision offered a total of 383 million H-shares in this global offering, with a final offer price of HK$63.28 per share, raising net proceeds of approximately HK$24 billion—the largest IPO in Hong Kong this year.
Despite support from an impressive lineup of cornerstone investors, Luxshare Precision faced a lukewarm reception on its Hong Kong debut. The stock opened below its issue price, plunged as much as nearly 10% intraday to a low of HK$57.2 per share, and ultimately closed at HK$62.3 per share, down 1.55%.
As of the close on July 10, Luxshare Precision’s Hong Kong-listed shares rebounded 1.12% to HK$63 per share, giving the company a market capitalization of approximately HK$485.2 billion.
As a global leader in precision components for consumer electronics, Luxshare Precision is widely regarded as one of Apple’s core suppliers. However, in recent years, the company has actively sought to downplay its 'Apple supply chain' label, reducing revenue reliance on its top customer from 75.24% in 2023 to 56.68% in 2025.
In terms of performance, Luxshare Precision reported first-quarter revenue of RMB 83.888 billion, up 35.77% year-over-year, and attributable net profit of RMB 3.66 billion, an increase of 20.24% year-over-year.
According to Luxshare Precision’s latest earnings guidance, the company expects attributable net profit for the first half of the year to range between RMB 7.84 billion and RMB 8.106 billion, representing year-over-year growth of 18% to 22%.
Notably, in the '2026 Xin Fortune 500 Rich List' released in June, Wang Laisheng and his sister Wang Laichun, the siblings behind Luxshare Precision, ranked on the list with a combined net worth of RMB 174.9 billion, an increase of approximately RMB 43.4 billion from the previous year.
Luxshare Precision’s Hong Kong listing featured a relatively 'confident' issue price of HK$63.28 per share.
According to 21st Century Business Herald, the Hong Kong IPO market has long followed an industry convention of 'discounting for liquidity.' For example, Lingyi Smart Component—a fellow Apple supply chain company—priced its H-shares at a discount of approximately 44% relative to its A-share closing price the previous day.
Luxshare Precision's Hong Kong IPO price was ultimately set at HK$63.28 per share—the top end of the indicated price range. At the prevailing exchange rate, this implies a roughly 13% discount to its A-share price.
In other words, Luxshare Precision priced its H-share offering closer to its A-share valuation, leading secondary market investors to adopt a more cautious stance on pricing in the near term.
According to China News Service, a Hong Kong investor revealed that in early July, he casually applied for Luxshare Precision shares, saying, 'At the time, I thought it was a leading Apple supply chain stock and would surely be in high demand—I didn’t expect to get allocated even with just one lot.'
However, after receiving his allocation, he noticed that his broker’s trading app showed a predicted allotment rate of 100% for one lot, which immediately raised red flags. 'Sure enough, the stock dropped in the grey market yesterday afternoon and failed to recover at today’s open.'
As disclosed by Luxshare Precision on the evening of July 8, its Hong Kong public offering received moderate oversubscription, with 47,308 valid applications and a subscription multiple of approximately 3.78 times, resulting in a 100.00% allotment rate for one lot.
Of these, 46,965 applicants were accepted in Category A and 343 in Category B, with no clawback mechanism triggered.
The international offering also saw moderate oversubscription, with a subscription multiple of approximately 9.46 times and allocations made to a total of 294 placees.
As of the close on its listing day, Luxshare Precision’s share price stood at HK$62.30. Based on this, investors who were allotted one lot (100 shares) incurred a paper loss of HK$98.
Joining retail investors in these losses were more than 20 cornerstone investors brought in by Luxshare Precision to support the offering. Together, they subscribed for approximately 186 million H-shares, representing nearly half (48.44%) of the total H-shares outstanding after the global offering.
A review of Luxshare Precision’s list of cornerstone investors shows that the company assembled virtually all core pillars of global capital markets for this listing, spanning five key investor categories: national sovereign wealth funds, leading international asset managers, globally recognized hedge funds, top-tier domestic financial institutions, and major industrial capital players.
Based on the closing price of HK$62.3 per share on its listing day, the aforementioned cornerstone investors collectively incurred an unrealized loss of approximately HK$182 million.
As of the close on July 10, Luxshare Precision's Hong Kong-listed shares retreated by 1.12% to HK$63 per share, still slightly below the IPO price of HK$63.28 per share.
Luxshare Precision's recent stock weakness may have been influenced by Apple’s recent announcement of price hikes.
On June 25 (U.S. time), Apple significantly raised prices for certain products on its official website, with Mac computers seeing a general increase of about 15% to 20%, and iPad prices rising roughly 15% to 25%.
Earlier, Apple CEO Tim Cook had already warned that soaring memory and storage chip costs would force the company to raise prices.
In this latest statement, Apple said, 'The consumer electronics industry is facing unprecedented challenges. The rapid expansion of AI data centers has caused a surge in demand for memory and storage. We have never seen component prices rise so sharply in such a short period.'
Apple also indicated that the company 'has reached a point where it must begin raising prices on certain products,' implying further price increases could follow.
The ripple effect from Apple’s price hike announcement quickly reached China’s major 'Apple supply chain' companies. On June 26, Luxshare Precision’s shares plunged 8.63% in a single day, Lingyi Smart Manufacturing fell 8.22%, Goertek dropped 6.37%, and Foxconn Industrial Internet declined 8.79%.
Public records show that Wang Laichun, Luxshare Precision’s founding chairperson, previously worked at Foxconn. Thanks to her outstanding performance, she rose step by step from an ordinary worker to line leader, team leader, and eventually section chief—a role that, at the time, was the highest position mainland Chinese employees could attain at Foxconn.
Despite holding an enviable position and enjoying a stable income at Foxconn, Wang Laichun later chose to leave the company.
In 1999, Wang Laichun and her brother Wang Laisheng acquired Hong Kong-based Luxshare, marking the beginning of their entrepreneurial journey. According to Tianyancha, Luxshare Precision Industry Co., Ltd. was officially incorporated five years later.
In its early years, Luxshare Precision primarily fulfilled orders from Foxconn. From 2007 to 2009—prior to its IPO—the revenue derived from Foxconn, its largest client, accounted for 47.73%, 56.46%, and 45.38% of the company’s total revenue, respectively.
In 2010, Luxshare Precision successfully listed on China’s A-share market, with annual revenue just surpassing RMB 1 billion that year. Under Wang Laichun’s leadership, the company subsequently entered Apple’s supply chain, ushering in a period of rapid growth.
In 2015, Luxshare Precision’s revenue surpassed the RMB 10 billion mark. By 2020, the company’s revenue had further climbed to RMB 92.501 billion. Just one year later, annual revenue surged another 66.43% to RMB 153.946 billion, and by 2022, it exceeded RMB 200 billion.
Luxshare Precision’s rapid expansion has been partly driven by strong support from its deeply entrenched key client. In 2022, the company’s largest customer accounted for 73.28% of its total sales, and this same customer also served as one of its primary suppliers.
This implies that any adverse changes in Luxshare Precision’s relationship with its top customer could significantly and negatively impact the company’s financial performance.
This is not mere speculation; there is already a domestic precedent. In November 2022, Goertek—a fellow Apple supply chain company—issued a 'Risk Alert Announcement,' stating that it had recently received notice from a major overseas client suspending production of one of its smart acoustic devices.
In December of the same year, Goertek stated in its '2022 Annual Earnings Forecast Revision Announcement' that the incident resulted in direct losses and asset impairment charges amounting to approximately RMB 2.0–2.4 billion, significantly affecting its 2022 operating results.
Analyst Ming-Chi Kuo noted that the product Goertek halted production on was likely Apple’s AirPods Pro 2, and the suspension was more likely due to manufacturing issues rather than weak demand. Luxshare Precision was the vendor that took over this production capacity.
In 2023, Luxshare Precision’s sales from its largest customer amounted to RMB 174.5 billion, accounting for 75.24% of its annual total sales—a further increase that underscored the company’s growing dependence on this key client.
Subsequently, through Luxshare Precision’s efforts, its reliance on this major customer eased slightly. Last year, sales from its top customer reached RMB 188.4 billion, representing 56.68% of total annual revenue—a notable decline from the previous level.
To reduce its dependence on major clients, Luxshare Precision is actively building a three-pronged business structure centered on consumer electronics, automotive, and AI.
In 2025, Luxshare Precision reported full-year revenue of RMB 332.344 billion, up 23.64% year-over-year, and net profit attributable to shareholders of RMB 16.6 billion, an increase of 24.2% compared to the prior year.
In the first quarter of 2026, the company’s revenue rose 35.77% year-over-year to RMB 83.888 billion, while net profit attributable to shareholders increased by 20.24% to RMB 3.66 billion.
A closer look at Luxshare Precision’s revenue breakdown shows that its automotive electronics segment generated RMB 39.255 billion in revenue last year, surging 185.34% year-over-year. Revenue from its communications and data center business reached RMB 24.568 billion, up 33.81% year-over-year. Together, these two segments accounted for nearly 20% of total revenue.
During the same period, revenue from the company’s consumer electronics business grew 13.37% year-over-year to RMB 264.266 billion, with its share of total revenue declining from 86.72% the previous year to 79.52%—a drop of more than 7 percentage points.
According to financial reports, Luxshare Precision’s automotive business currently covers four main areas: connectors, wiring harnesses, intelligent control systems, and powertrain systems. Last year, the company officially completed the acquisition and full integration of Leoni AG, a century-old German automotive components giant.
Meanwhile, the company is also focusing on core components and full-system assembly for telecommunications base stations and AI servers, with offerings spanning high-speed electrical and optical interconnects, thermal management, power management, server assembly, and 4G/5G RF antennas.
Of the approximately HK$24 billion in net proceeds from this Hong Kong listing, Luxshare Precision plans to allocate roughly 35% toward expanding production capacity and upgrading existing manufacturing facilities, with about 18% dedicated to its automotive electronics business and approximately 17% to its consumer electronics business.
Additionally, around 30% of the net proceeds will be used for technology R&D, refining manufacturing processes, and enhancing smart manufacturing capabilities; approximately 15% will go toward investing in upstream and downstream sectors or related industry targets, with the remainder allocated to repay borrowings and supplement working capital.
Notably, Luxshare Precision’s gross margin has remained at a relatively low level in recent years. Prior to the pandemic, it was able to maintain margins around 20%, but they have gradually declined since then, dipping as low as 10.41% in 2024.
In full-year 2025 and the first quarter of this year, the company’s gross margin modestly rebounded to 11.91% and 11.92%, respectively, likely driven by growth in its higher-margin automotive segment (15.75% last year) and communications segment (18.40% last year).
Furthermore, as of the end of the first quarter, Luxshare Precision’s debt-to-asset ratio reached 66.53%, the highest level in the company’s history.
Risk Disclaimer: The above content only represents the author's view. It does not represent any position or investment advice of Futu. Futu makes no representation or warranty.Read more
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