Core Viewpoint - Aux Electric Co., Ltd. is preparing for an IPO on the Hong Kong Stock Exchange, with a share price range of HKD 16 to HKD 17.42, aiming to raise approximately HKD 3.287 billion based on a mid-range price of HKD 16.71 [1][2]. Group 1: IPO Details - Aux plans to issue 207 million shares, with 196.8 million shares allocated for international offerings and 10.36 million shares for public offerings in Hong Kong [1]. - The cornerstone investors include China Post Insurance, China Post Wealth Management, Huaying Hong Kong, and others, collectively subscribing approximately USD 124.3 million (around HKD 974.2 million) [2][3]. Group 2: Financial Performance - Aux reported revenues of approximately RMB 30 billion for 2024, with an adjusted net profit of RMB 2.935 billion [4][8]. - The company’s revenue for 2022, 2023, and 2024 was RMB 19.53 billion, RMB 24.83 billion, and RMB 29.76 billion respectively, with corresponding gross profits of RMB 4.15 billion, RMB 5.42 billion, and RMB 6.24 billion [8][9]. - For the first quarter of 2025, Aux achieved revenue of RMB 9.35 billion, a 27% increase from RMB 7.36 billion in the same period last year [8][10]. Group 3: Product and Market Strategy - Aux specializes in high-quality home and central air conditioning systems, with a focus on energy efficiency, comfort, health, and intelligence [5][7]. - The company has established strategic partnerships for compressor research and production with Panasonic and has expanded its overseas presence in markets such as Malaysia, Thailand, and the USA [8]. Group 4: Ownership Structure - Prior to the IPO, Aux Holdings controlled 96.36% of the shares, with Zheng Jianjiang being the major shareholder [13][17]. - Post-IPO, Aux Holdings will hold 83.54% of the shares, with the remaining shares distributed among other investors and the public [23]. Group 5: Competitive Landscape - Aux has a long-standing rivalry with Gree Electric Appliances, which has included legal disputes over product quality and competition practices [24][25]. - Despite the competitive pressure, Aux has been focusing on expanding its market share and product offerings, particularly in the face of emerging competitors like Xiaomi [27].

Core Viewpoint - Company plans to globally offer approximately 207 million shares, with an estimated net proceeds of about HKD 3.287 billion based on a share price of HKD 16.71 [1][3][5] Group 1: Share Offering Details - The global offering includes 10.3582 million shares for Hong Kong and approximately 196.803 million shares for international sale, with a maximum offer price of HKD 17.42 per share [1][3] - The offering is expected to commence trading on the Hong Kong Stock Exchange on September 2, 2025 [1] - The company has a 15% over-allotment option for additional shares [1] Group 2: Fund Utilization - 50% of the proceeds will be used to upgrade the company's smart manufacturing system and supply chain management [3] - Approximately 20% will be allocated for global research and development [3] - Another 20% will strengthen sales and distribution channels, while the remaining 10% will be used for general working capital [3] Group 3: Company Performance and Market Position - Company reported revenues of CNY 195.28 billion, CNY 248.32 billion, and CNY 297.59 billion for the years 2022 to 2024, with adjusted net profits of CNY 14.49 billion, CNY 25.11 billion, and CNY 29.35 billion respectively [5][6] - As of the first quarter of this year, the company achieved a revenue of CNY 73.6 billion, a year-on-year increase of 27%, with profits rising 23% to CNY 9.2 billion [5] - The company is the fifth largest air conditioning provider globally, holding a market share of 7.1% as of 2024 [5] Group 4: Competitive Landscape - The company's low-price strategy has significantly compressed profit margins, with gross margins of 21.3%, 21.8%, and 21.5% for 2022, 2023, and the first three quarters of 2024 respectively [6] - The company faces stiff competition from leading brands like Gree and Midea, which have significantly higher gross margins [6] - The company's market share in online air conditioning sales has dropped from 28.57% in 2018 to 5.02% in 2025, ranking sixth [6] Group 5: Financial Health and Liabilities - The company has 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 [8] - Short-term debt pressure is notable, with current liabilities reaching CNY 172.84 billion against cash reserves of only CNY 28.96 billion [8] - The company has accumulated significant trade payables, with accounts payable and notes payable totaling CNY 97.5 billion, constituting 50% of total liabilities [8]

Group 1 - In July, Xiaomi's online air conditioner sales surpassed Gree's, with Xiaomi holding a market share of 16.71% compared to Gree's 15.22% [1] - Xiaomi's public relations manager expressed surprise at the rapid change in market dynamics, indicating a shift in consumer preferences [1] - Gree's market director responded by stating that Gree still maintains its leading position in the online market according to data from Aowei Cloud Network [3] Group 2 - Gree's market director emphasized that the publicly available data contradicts the claims of Xiaomi's sales surpassing Gree's, asserting that Gree remains the leader in the online market [5] - Gree has been recognized for 16 consecutive years for customer satisfaction, ranking first in five key dimensions: brand image, cost performance, meeting consumer needs, product reliability, and service quality [5] - Gree highlighted the importance of healthy competition in the industry, expressing optimism about the ongoing investments from competitors to drive industry progress [5]

Core Viewpoint - AUX Electric Co., Ltd. has submitted a second listing application to the Hong Kong Stock Exchange, following its initial submission on January 15, 2023, aiming to become a publicly listed company in Hong Kong [1] Financial Performance - AUX's projected revenue for 2024 is approximately 29.8 billion RMB, with a compound annual growth rate (CAGR) of 23.4% from 2022 to 2024 [1] - The company's revenues for 2022, 2023, and 2024 are 19.528 billion RMB, 24.832 billion RMB, and 29.759 billion RMB respectively, with gross profits of 4.15 billion RMB, 5.422 billion RMB, and 6.24 billion RMB [1] - Net profits for the same years are 1.441 billion RMB, 2.487 billion RMB, and 2.91 billion RMB [1] - AUX is the fifth largest air conditioner supplier globally in 2024, holding a market share of 7.1% [1] Market Position and Competition - AUX's revenue primarily comes from household and central air conditioning, with household air conditioning accounting for 88.5%, 87.3%, and 87.1% of total revenue from 2022 to 2024 [2] - The sales volume of household air conditioners is projected to increase from 10.2 million units in 2022 to 17.1 million units in 2024, despite a decline in average selling prices [2] - AUX's low-price strategy, which once helped it gain market share, is becoming less effective due to intensified competition in the air conditioning market, particularly from major players like Gree and Midea [3] Historical Context and Listing Attempts - AUX has been attempting to go public for several years, having previously been approved for listing on the New Third Board in 2016 but withdrew a year later [4] - The company has undergone business restructuring and sought A-share listing guidance, completing this process in mid-2023 before shifting focus to a Hong Kong listing [4]