Core Viewpoint - Aux Electric Co., Ltd. (AUX) has listed on the Hong Kong Stock Exchange, experiencing a decline in share price on its debut, with a final offering price of HKD 17.42 and net proceeds of HKD 3,993.5 million after expenses [1][4]. Summary by Category Share Offering and Pricing - AUX issued a total of 238,235,200 shares, with 83,382,400 shares allocated for public offering and 154,852,800 shares for international offering [2][3]. - The final offering price was set at HKD 17.42, leading to total proceeds of HKD 4,150.1 million, with estimated listing expenses of HKD 156.5 million deducted, resulting in net proceeds of HKD 3,993.5 million [4][5]. Key Investors - Major cornerstone investors included China Post Insurance, China Post Wealth Management, and Huaying Group, among others, with a total allocation of 55,921,400 shares [6][7]. Financial Performance - AUX is among the top five air conditioning providers globally, with revenues of RMB 19.53 billion, RMB 24.83 billion, RMB 29.76 billion, and RMB 9.35 billion for the years 2022, 2023, 2024, and the first quarter of 2025, respectively [9][10]. - Net profits for the same periods were RMB 1.44 billion, RMB 2.49 billion, RMB 2.91 billion, and RMB 0.92 billion [9][10]. Cash Flow and Debt - The net cash flow from operating activities for AUX was RMB 4.00 billion, RMB 4.63 billion, RMB 2.52 billion, and RMB 0.58 billion for the years 2022, 2023, 2024, and the first quarter of 2025, respectively [11]. - AUX has maintained a high debt ratio, with asset-liability ratios of 88.3%, 78.8%, 84.1%, and 82.5% from 2022 to the first quarter of 2025 [12].

Core Viewpoint - The article discusses the IPO application of Aux Electric Co., Ltd. and highlights its financial performance, market position, and corporate governance structure, indicating both growth potential and significant challenges ahead. Company Overview - Aux Electric, established in 1994, is a comprehensive air conditioning provider involved in design, R&D, production, sales, and service, operating in over 150 countries and regions [1][3]. - According to Frost & Sullivan, Aux is the fifth-largest air conditioning provider globally by sales volume, with a market share of 7.1% in 2024 [1][3]. Financial Performance - Aux's revenue for 2022, 2023, 2024, and Q1 2025 was RMB 19.53 billion, RMB 24.83 billion, RMB 29.76 billion, and RMB 9.35 billion, respectively. Net profits for the same periods were RMB 1.44 billion, RMB 2.49 billion, RMB 2.91 billion, and RMB 0.92 billion [2][3]. - Despite revenue and net profit growth, the growth rates have shown a significant decline, with 2023 and 2024 revenue growth rates at 27.2% and 19.8%, and net profit growth rates at 72.5% and 17.0% [3]. Debt and Dividend Policy - Aux has a high debt level, with asset-liability ratios of 88.3%, 78.8%, 84.1%, and 82.5% from 2022 to Q1 2025. The net current liabilities were RMB 3.19 billion, RMB 2.03 billion, RMB 2.47 billion, and RMB 0.79 billion during the same period [2][8]. - In a notable move, Aux declared a one-time dividend of RMB 3.794 billion in 2024, which accounted for 55% of its net profit over the past three years, with the Zheng family receiving approximately RMB 3.656 billion [2][8]. Market Position and Comparison - Aux's gross profit margins were 21.3%, 21.8%, and 21.0% for 2022, 2023, and 2024, significantly lower than Gree Electric's 34.91% and Midea Group's 29.97% in 2024 [5]. - R&D expenditure as a percentage of revenue for Aux was 2.4% in 2024, lower than Midea Group's 3.99% and Gree Electric's 3.77% [5]. Corporate Governance - Aux is a family-controlled enterprise, with the founder Zheng Jianjiang controlling approximately 96.36% of the voting rights through various entities [1][6]. - Zheng Jianjiang holds 85% of the shares in Aux Holdings, with his brother and relatives holding the remaining shares [1][6].

Core Viewpoint - Aokai Electric Co., Ltd. (Aokai) has submitted a second listing application to the Hong Kong Stock Exchange, following an initial submission in January 2023, indicating its ongoing efforts to access capital markets despite previous setbacks in A-share listings [1] Group 1: Company Overview - Aokai was established in 1994 and specializes in the design, research and development, production, sales, and service of high-quality household and central air conditioning systems [1] - According to Frost & Sullivan, Aokai is the fifth largest air conditioning provider globally by sales volume, with a market share of 7.1% in 2024 [1] Group 2: Financial Performance - Aokai has demonstrated strong revenue and net profit growth from 2022 to 2024, with revenues of RMB 19.53 billion, RMB 24.83 billion, and RMB 29.76 billion, reflecting year-on-year growth rates of 27.2% and 19.8% for 2023 and 2024, respectively [2] - Net profits for the same period were RMB 1.44 billion, RMB 2.49 billion, and RMB 2.91 billion, with significant growth of 72.5% and 17.0% in 2023 and 2024 [2] Group 3: Market Position and Growth - Aokai's sales volume is projected to grow at a compound annual growth rate (CAGR) of 30.0% from 2022 to 2024, significantly outpacing the global air conditioning market's CAGR of 4.6% during the same period [1] - By 2024, Aokai is expected to hold a 25.7% market share in the Chinese household air conditioning market, making it the leading brand in this segment [1] Group 4: International Sales and Profitability - Aokai's overseas sales have shown remarkable growth, with revenues of RMB 83.86 billion, RMB 104.12 billion, and RMB 146.81 billion from 2022 to 2024, representing 42.9%, 41.9%, and 49.3% of total revenue, respectively [5][6] - The company's gross profit margin has fluctuated, recorded at 21.3%, 21.8%, and 21.0% from 2022 to 2024, which is lower than competitors Gree (30.2% in 2024) and Midea (28.6%) [6] Group 5: Corporate Governance and Financial Health - Aokai's ownership structure is highly concentrated, with the Zheng family controlling approximately 96.36% of voting rights, indicating a family-controlled enterprise [7] - The company has a high debt level, with debt-to-asset ratios of 88.3%, 78.8%, 84.1%, and 82.5% from 2022 to 2025 [8] - In 2024, Aokai distributed a one-time dividend of RMB 3.794 billion to shareholders, which accounted for 55% of the net profit over the past three years, raising concerns about "blood-sucking dividends" [9]