Group 1: Core Insights - The report highlights the ongoing tension in US-China trade relations, particularly with the US considering broad software export restrictions against China, which may impact market performance [2][4] - The Hong Kong stock market has shown a downward trend, with major indices declining, reflecting cautious investor sentiment amid external market pressures [2][3] Group 2: Company Overview - The specific company, Cambridge Technology (6166.HK), focuses on the design, development, and sales of connectivity and data transmission devices, ranking fifth globally in the optical and wireless connectivity device (OWCD) industry with a market share of 4.1% [6][7] - The company's revenue is projected to recover from a decline in 2022 to an expected increase in 2025, with net profit also showing a recovery trend [6][7] Group 3: Industry Status and Outlook - The OWCD industry is expected to grow significantly, with global sales projected to reach USD 54.6 billion in 2024 and a compound annual growth rate (CAGR) of 13.9% from 2020 to 2024, driven by digital transformation and technological upgrades [7][8] - The competitive landscape is characterized by intense competition and a fragmented market, with the main business models being JDM/ODM and CM/co-location production [7] Group 4: Strengths and Opportunities - The company has established significant technological and research barriers, with R&D spending increasing from CNY 270 million to CNY 320 million from 2022 to 2024, and a strong focus on cutting-edge technologies [8] - The company benefits from a global presence, with over 90% of revenue from overseas markets, allowing it to mitigate tariffs on Chinese products [8] Group 5: Weaknesses and Risks - The company faces risks from high customer concentration, with the top five customers accounting for 82.5% of revenue in the first half of 2025, which could impact performance if demand changes [9] - Trade policies and geopolitical risks, particularly regarding US tariffs on Chinese products, could affect overseas sales despite the company's ability to leverage production in Malaysia [10] Group 6: IPO Information and Fund Utilization - The IPO is expected to raise approximately HKD 4.48 billion, with funds allocated for capacity enhancement, R&D, marketing, and overseas strategic investments [11] - The company has secured cornerstone investors for the IPO, indicating strong market interest and confidence in its growth potential [12] Group 7: Investment Recommendation - The report suggests that Cambridge Technology possesses a clear recovery trend in performance and benefits from favorable industry dynamics, recommending subscription to the IPO while being mindful of potential risks [13]

Core Viewpoint - The number of A-share companies seeking IPOs in Hong Kong has increased, with several companies announcing their listings and others submitting applications to the Hong Kong Stock Exchange [1] Group 1: Company Overview - Shanghai Cambridge Technology Co., Ltd. (referred to as "Cambridge Technology") is set to open its IPO subscription from October 20 to October 23, 2023, with an expected listing date of October 28, 2025, on the Hong Kong Stock Exchange [1] - The company plans to issue 67.01 million H-shares, with 10% allocated for Hong Kong and 90% for international placement, using Mechanism B without a reallocation mechanism [1] - The maximum offering price is set at HKD 68.88 per share, potentially raising up to HKD 4.616 billion [2] Group 2: Financial Performance - Cambridge Technology's A-share closing price as of October 20, 2023, was CNY 108.25 per share, with a market capitalization of CNY 29 billion, indicating a discount rate of approximately 41.6% for the Hong Kong offering price [2] - The company has attracted 16 cornerstone investors, including prominent firms, with a total subscription amount of USD 290 million, accounting for 48.89% of the offering [2] - The company's total revenue for 2022, 2023, 2024, and the first half of 2025 was CNY 3.784 billion, CNY 3.085 billion, CNY 3.649 billion, and CNY 2.034 billion, respectively, with net profits of CNY 171 million, CNY 95 million, CNY 167 million, and CNY 118 million [7][8] Group 3: Product and Market Position - Cambridge Technology specializes in connection and data transmission devices, with a focus on broadband, wireless, and optical module products [5][6] - The company holds over 30% of the global market share for XGS PON products in the broadband sector [5] - In the optical module segment, the company is among the first to deploy 800G and 1.6T optical module products [5] - The OWCD (Optical and Wireless Connection Devices) market is projected to grow from USD 32.4 billion in 2020 to USD 54.6 billion in 2024, with a compound annual growth rate (CAGR) of 13.9% [18] - Cambridge Technology ranks fifth in the global OWCD industry with a market share of 4.1% as of 2024 [22] Group 4: Research and Development - The company has invested over CNY 1.4 billion in research and development, with R&D expenses accounting for 7.1% to 8.9% of total revenue during the reporting periods [11][10] - As of June 30, 2025, the R&D team comprised over 50% of the total workforce, with centers established in China, the United States, and Japan [10]