Core Viewpoint - Aux Group is set to launch its IPO on the Hong Kong Stock Exchange, with a total issuance expected to reach approximately 2.74 billion shares, aiming to raise between 33.15 billion to 47.73 billion HKD, potentially becoming the largest non-A to H IPO in 2025 [1][2]. Fundraising and Market Confidence - The initial fundraising target was set at 6-8 billion USD, but the actual issuance structure indicates that this target cannot be met without fulfilling multiple conditions, reflecting a lack of market confidence in the company's valuation [2][3]. - The maximum fundraising amount is 47.73 billion HKD (approximately 6.09 billion USD), contingent on the highest pricing and full exercise of both the 15% adjustment and over-allotment options [2]. Cornerstone Investors - Aux Group has attracted five cornerstone investors, with a total subscription amount of 9.74 billion HKD, representing only 24.5% of the total issuance, which is below the average level for similar IPOs in the Hong Kong market [3][4]. - Notably, there are no foreign institutional investors among the cornerstone investors, contrasting with other IPOs of similar scale that typically include foreign participation [4][6]. Valuation and Market Position - The company's estimated market capitalization at the midpoint of the pricing range is approximately 26.5 billion HKD, with projected P/E ratios of 8.3x for 2024 and 7.8x for the trailing twelve months [7][8]. - Comparatively, leading companies in the home appliance sector have higher average P/E ratios, indicating that Aux Group's valuation does not adequately reflect its fundamental weaknesses [7][9]. Financial Health and Risks - Aux Group's gross margin for its air conditioning business is significantly lower than that of its competitors, and nearly 50% of its revenue comes from OEM operations, which may limit its pricing power and profit margins [8][9]. - The company has faced scrutiny over its dividend policy, having declared a substantial dividend prior to the IPO, raising questions about its fundraising motives and financial stability [9].

Investment Rating - The report maintains a "Buy" rating for the company [6] Core Views - The company's Q2 2025 performance met expectations, with revenue of 13.855 billion yuan (up 8.6% year-on-year) and a net profit of 502 million yuan (up 36.8% year-on-year) [6][8] - The improvement in product structure is identified as the main driver for profit growth, with a focus on the recovery of inventory in the U.S. and the ramp-up of miniLED products [6] - The company is expected to achieve revenue of 63.3 billion yuan, 69.6 billion yuan, and 75.2 billion yuan for 2025, 2026, and 2027 respectively, with year-on-year growth rates of 8.1%, 10.0%, and 8.0% [6][9] Revenue Analysis - The company's revenue from smart displays increased by 7% in Q2, with domestic sales growing by over 20% year-on-year, driven by government subsidies and the iteration of miniLED products [6][8] - The new display segment saw a year-on-year revenue increase of approximately 10%, supported by high growth in laser displays and commercial displays overseas [6] Profitability - The company's gross profit margin significantly improved, with a net profit margin increase of 0.7 percentage points in Q2 [6][8] - The gross margin for smart terminal displays increased by 2.3 percentage points, contributing to overall profitability improvements [6]

Core Viewpoint - The market is experiencing a mixed performance with the National Free Cash Flow Index showing signs of recovery, driven by strong performances from specific stocks and a favorable funding inflow trend [1] Group 1: Market Performance - Major indices opened lower but showed divergence in performance, with the National Free Cash Flow Index rebounding after an initial drop [1] - Notable stocks such as Yaxiang Integration and Jiejia Weichuang have seen consecutive trading limit increases, indicating strong investor interest [1] Group 2: Fund Flows - The largest free cash flow ETF (159201) experienced a slight decline, presenting a low-positioning opportunity for investors [1] - Over the past six days, the ETF has attracted a total net inflow of 436 million yuan, bringing its latest scale to 4.385 billion yuan [1] Group 3: Economic Indicators - The improvement in the fundamental economic outlook is becoming more tangible, with July's high-frequency economic data showing some weakness due to various factors [1] - From January to June, the year-on-year growth rate of general fiscal expenditure in China recorded an increase of 8.9%, a significant improvement compared to the -2.8% from the previous year [1] Group 4: Sector Analysis - The "anti-involution" trend is providing a strong mid-term logic for the A-share market, with expectations of improved supply-demand dynamics in the midstream materials and manufacturing sectors [1] - The free cash flow ETF focuses on industry leaders with abundant free cash flow across diverse sectors such as home appliances, automotive, non-ferrous metals, power equipment, and petrochemicals, effectively mitigating risks from single industry volatility [1]

Group 1 - The second quarter saw an influx of funds into the new consumption sector, driving an upward trend and raising market expectations for performance in this area [1] - As preliminary reports for the second quarter are released, some high-growth stocks have underperformed relative to previous expectations, leading to a market adjustment that is gradually stabilizing [1] - Despite the adjustments, leading companies continue to maintain stable high growth rates, suggesting that new consumption may experience a new round of market activity as overall consumer sentiment is expected to recover [1] Group 2 - Traditional consumption sectors are showing a high cost-performance ratio, with significant increases in various industries since August, including automotive (12.05%), home appliances (9.37%), and light manufacturing (8.4%) [1] - The valuation levels of these sectors are below their historical averages, with food and beverage, agriculture, home appliances, and social services all positioned below their valuation midpoints [1] - The expected profit growth rates for 2025E in these sectors are 8.64% for food and beverage, 22.26% for agriculture, 13.92% for home appliances, and 45.35% for social services, indicating good investment value in the current industry rotation context [1]

Investment Rating - The investment rating for Hisense Visual is maintained at "Outperform" [2][8] Core Views - The company's Q2 performance met market expectations, with H1 2025 revenue of 27,231 million yuan, a year-on-year increase of 7%, and a net profit attributable to shareholders of 1,056 million yuan, up 27% year-on-year [5][8] - The domestic and international markets are steadily developing, with Hisense maintaining the leading position in the high-end TV market in China and significant growth in overseas sales [8] - The company's profitability is steadily improving, with a gross margin of 16.79% in Q2 2025, an increase of 0.93 percentage points year-on-year [8] Financial Data and Profit Forecast - For H1 2025, the company achieved total revenue of 272.31 billion yuan, with a net profit of 10.56 billion yuan, reflecting a strong performance [5][8] - Revenue and profit forecasts for 2025-2027 are as follows: - 2025E revenue: 64,177 million yuan, net profit: 2,500 million yuan - 2026E revenue: 68,398 million yuan, net profit: 2,757 million yuan - 2027E revenue: 73,018 million yuan, net profit: 3,012 million yuan [7][10] - The projected earnings per share for 2025 is 1.92 yuan, with a price-to-earnings ratio of 11 [7][10]

Company Distribution Plans - The company announced a semi-annual distribution plan for 2025, proposing a cash dividend of 3 yuan per 10 shares, totaling 115 million yuan [3] - This marks the eighth distribution since the company's listing, with a payout ratio of 86.62% of net profit [3][4] - The calculated dividend yield based on the average trading price for the first half of 2025 is 2.83% [3] Financial Performance - For the first half of 2025, the company reported revenue of 820 million yuan, a year-on-year decrease of 4.92% [1] - The net profit for the same period was 133 million yuan, reflecting a year-on-year increase of 7.85% [1] - The basic earnings per share (EPS) stood at 0.35 yuan [1] Industry Context - In the home appliance sector, six companies have announced their semi-annual distribution plans for 2025, with the highest cash distribution being 300 million yuan from Debang Lighting, followed by Huaxiang Co. and the company, with distributions of 116 million yuan and 115 million yuan respectively [2] - The company's cash distribution ranks among the top in its industry, indicating a competitive position in terms of shareholder returns [2]

Group 1 - Small-cap stocks exhibit higher volatility and activity compared to large-cap stocks, making them more likely to become market leaders [1] - As of August 25, there are 936 stocks with a circulating market value below 3 billion yuan, and 389 stocks with a circulating market value below 2 billion yuan [1] - A total of 1587 stocks have a total market value below 5 billion yuan, with 552 stocks having a total market value below 3 billion yuan [1] Group 2 - The three stocks with the smallest circulating market values are *ST Zitian at 440 million yuan, Liren Technology at 598 million yuan, and Bofei Electric at 656 million yuan [1] - The three stocks with the smallest total market values are *ST Zitian at 444 million yuan, *ST Suwu at 754 million yuan, and *ST Yuancheng at 765 million yuan [1] - A detailed list of stocks with circulating market values below 2 billion yuan includes various sectors such as media, household appliances, and basic chemicals, with notable high P/E ratios [1][2]

Group 1 - Shenzhen Stock Exchange (SZSE) has become a core force in China's capital market, supporting the development of strategic emerging industries and high-tech enterprises through the implementation of the registration system reform for the ChiNext board [1][2] - As of August 20, 2025, the number of A-share listed companies on SZSE has exceeded 2870, with a total market capitalization surpassing 40 trillion yuan, and nearly 70% of ChiNext companies belong to strategic emerging industries [1][3] - The top five industries by market capitalization on the ChiNext board are electronics, power equipment, biomedicine, robotics, and machinery, reflecting a significant shift towards technology-driven sectors [3][9] Group 2 - The market capitalization of leading companies has changed significantly over the past five years, with CATL surpassing Wuliangye to become the top company at 1.28 trillion yuan, and BYD's market cap increasing by over 90% to 978 billion yuan [4][5] - The overall revenue of 1376 ChiNext listed companies reached 4.03 trillion yuan in 2024, with a net profit of 207.46 billion yuan, indicating a continuous growth trend [11] Group 3 - R&D investment in the Shenzhen market exceeded 760 billion yuan in 2024, a nearly 68% increase from 2020, with companies like BYD and ZTE leading in R&D spending [12][14] - The number of new listings on the ChiNext board under the registration system has reached 577, with a total market capitalization of 4.64 trillion yuan, all in high-tech industries [8][12] Group 4 - The implementation of new policies has led to an increase in mergers and acquisitions, with 121 restructuring proposals disclosed in 2024, and 964 new mergers and acquisitions reported by listed companies [17][18] - The new restructuring regulations simplify the process for companies, allowing for quicker approvals and enhancing the market's capacity for resource allocation [18][19] Group 5 - In 2024, cash dividends from Shenzhen-listed companies reached 575.3 billion yuan, a 41.8% increase, with several companies announcing significant buyback plans [20][21] - The introduction of policies allowing Hong Kong-listed companies to return to the A-share market presents new opportunities for both companies and investors [22][23]

Group 1: Company Overview - AUX Electric, established in 1994 and headquartered in Ningbo, Zhejiang, is a global enterprise engaged in the design, research and development, production, and sales of household and central air conditioning systems [3] - The company operates under the main brand "AUX" and has developed sub-brands such as "HuaSuan" and "AUFIT," along with a high-end line "ShinFlow," creating a brand matrix that covers various consumer segments [3] - As of 2024, AUX ranks fifth globally in air conditioning sales, holding a market share of 7.1%, with operations in over 150 countries and regions, including Southeast Asia, North America, and the Middle East [3] Group 2: Financial Performance - AUX's revenue grew from RMB 19.53 billion in 2022 to RMB 29.76 billion in 2024, representing a compound annual growth rate (CAGR) of 23.4%. Net profit increased from RMB 1.44 billion to RMB 2.91 billion during the same period, with a CAGR of 42.1% [5][6] - In Q1 2025, the company reported revenues of RMB 9.35 billion and a net profit of RMB 0.93 billion, reflecting year-on-year growth of 27% and 23%, respectively [6] - The household air conditioning segment is the primary revenue driver, accounting for 89.5% of total revenue in Q1 2025, with wall-mounted units contributing 75.7% of that segment [7] Group 3: Market Position and Strategy - The global air conditioning market is expected to reach RMB 1.53 trillion by 2028, with a CAGR of 4.0% from 2024 to 2028. The industry is highly competitive, dominated by three major players: Midea, Gree, and Haier, which together hold about 60% of the market share [9] - AUX's strategy includes a "direct sales through online platforms" model to reduce intermediary costs and rapid expansion through overseas ODM (Original Design Manufacturer) partnerships, although its brand premium remains a challenge [9] - The company's overseas revenue share increased from 42.9% in 2022 to 57.1% in Q1 2025, with significant growth in Southeast Asia, North America, and the Middle East [8] Group 4: IPO Details - AUX Electric is planning an IPO with a total issuance of 207 million shares, priced between HKD 16 and HKD 17.42, aiming to raise approximately HKD 3.46 billion [2][9] - The IPO will have a cornerstone investment from five investors, accounting for 28.1% of the offering, and the public offering will initially represent 5% of the total shares [2][10] - The estimated market capitalization upon listing is between HKD 249.15 billion and HKD 271.26 billion, with a forward valuation of approximately 7 times earnings, comparable to Gree's valuation [9]

Group 1 - The 9th China Consumer Goods (Russia) Brand Exhibition and the 6th China Machinery Industry (Russia) Brand Exhibition opened in Moscow, showcasing over 1,000 new products from more than 360 companies across 14 provinces, with a nearly 30% increase in exhibitors compared to the previous year [1] - The exhibition covers a wide range of consumer goods including home products, kitchenware, home appliances, and consumer electronics, meeting the demand for health, convenience, and intelligence in Russian households [3] - The machinery exhibition features key sectors such as hardware, construction materials, engineering machinery, and agricultural machinery, with leading companies providing comprehensive "Made in China" solutions for the Russian market [5] Group 2 - The exhibition will host various forums discussing topics like "Russian Consumption Trends" and "Advantages of Chinese Goods on E-commerce Platforms," aimed at fostering cooperation between Chinese and Russian industries [7] - A series of B2B matchmaking events will be organized, inviting over 70 professional buyers from major Russian retail chains and e-commerce platforms to facilitate the establishment of sales channels for Chinese brands [7] - The event is co-hosted by several organizations, including the China Chamber of Commerce for Import and Export of Machinery and Electronic Products, and supported by Russian trade associations, highlighting the growing economic cooperation between China and Russia [9]