Huaqin Technology (SH:603296) Sou Hu Cai Jing·2025-10-15 08:50Core Viewpoint - Huakin Technology, a leading ODM enterprise, is expanding its capital market presence by applying for a listing on the Hong Kong Stock Exchange after two years on the Shanghai Stock Exchange, aiming for a dual listing strategy [3][4]. Company Overview - Established in 2005, Huakin Technology specializes in the R&D and manufacturing of smart products, providing solutions for mobile terminals, computing and data centers, and AIoT [3]. - The company is recognized as the largest consumer electronics ODM manufacturer globally, with a projected market share of 22.5% in 2024 [3]. Market Position - Huakin Technology holds significant market shares in various segments: 25.2% in smartphone ODM, 37.9% in tablet ODM, and 18.7% in wearable ODM [3]. - Major clients include global tech giants such as Samsung, Huawei, Xiaomi, Amazon, Asus, and Sony, with Samsung being a key customer [4][6]. Financial Performance - In 2024, Huakin Technology achieved revenues of 109.878 billion yuan and a net profit of 2.926 billion yuan [6]. - For the first half of 2025, the company reported revenues of 83.939 billion yuan, a year-on-year increase of 113.06%, and a net profit of 1.889 billion yuan, up 46.3% [6]. Profitability Challenges - Despite revenue growth, the company's profitability is under pressure, with a low gross margin of 9% in 2024 and a further decline to 7.67% in the first half of 2025, representing a year-on-year drop of 34.47% [6]. - The net profit margin also decreased to 2.25%, reflecting the challenges faced by ODM enterprises in converting revenue into profit [6]. Cash Flow and Working Capital Issues - The company experienced a net cash outflow of 1.522 billion yuan from operating activities in the first half of 2025, a decline of 246.21% year-on-year [6]. - High accounts receivable and inventory levels are significant factors affecting cash flow, with accounts receivable at 35.819 billion yuan and inventory at 14.258 billion yuan as of June 2025 [7]. Strategic Initiatives - In 2024, Huakin Technology introduced a "3+N+3 global smart product platform strategy" to diversify its business, focusing on consumer electronics, digital production solutions, and emerging sectors like robotics and electric vehicles [10]. - The company has engaged in several acquisitions to expand its operations, including the purchase of an 80% stake in Yiluda and investments in other technology firms [11]. Shareholder Activity - Prior to its Hong Kong listing, five major shareholder platforms initiated a share reduction plan, selling approximately 38.96 million shares, amounting to over 3.55 billion yuan [12].