The robust performance of its core business, coupled with the significant potential of its optical module operations, has propelled Luxshare Precision Industry Co.,Ltd.'s market valuation beyond the 500 billion yuan mark.

Countdown to Hong Kong Listing

Following Lens Technology, another major "Apple supply chain" giant is set to list on the Hong Kong Stock Exchange.

On June 23, the HKEX website showed that consumer electronics manufacturing giant Luxshare Precision has passed its listing hearing and updated its post-hearing information pack, marking the final stage of its Hong Kong IPO process.

Public information indicates that as early as July 2025, Luxshare Precision's board approved proposals related to an overseas listing, subsequently fully advancing preparations for the Hong Kong listing. On August 18 of that year, the company formally submitted its H-share listing application to the Hong Kong Stock Exchange, later updating and refining the application materials on February 27, 2026.

According to Frost & Sullivan data, based on 2025 revenue, Luxshare Precision ranks fifth globally and first in mainland China in the global PIMS (Precision Intelligent Manufacturing Solutions) industry, holding leading global positions across major business lines including consumer electronics, automotive electronics, and communications & data centers. Specifically, the company ranks second globally and first in mainland China in the consumer electronics components and modules PIMS market, with a global market share of 11.2%.

Financial report data shows that for the full year 2025, the company achieved operating revenue of 332.344 billion yuan, a year-on-year increase of 23.64%, and net profit attributable to shareholders of 16.6 billion yuan, a year-on-year increase of 24.2%. By business segment, the traditional core consumer electronics business achieved annual revenue of 264.266 billion yuan, up 13.37% year-on-year, accounting for 79.52% of total revenue. The automotive electronics and communications & data center businesses achieved revenues of 39.255 billion yuan and 24.568 billion yuan, respectively, with year-on-year increases of 185.34% and 33.81%. Their combined revenue share exceeded 20% for the first time, indicating that Luxshare Precision has initially formed a three-pillar structure driven by "consumer electronics + automotive electronics + data centers".

Similar to its strategy within the Apple supply chain, Luxshare Precision has also employed an acquisition-based approach to expand into automotive electronics and data center businesses, leading to a continuous rise in its debt scale. As of the end of 2025, Luxshare Precision's total liabilities exceeded 200 billion yuan, an increase of over 60 billion yuan from the same period last year, with interest-bearing liabilities surpassing 100 billion yuan, both setting new historical highs.

According to the latest report from IFR, a media outlet under Reuters, Luxshare Precision aims to raise $2-3 billion, with plans to list in Hong Kong as early as July. The prospectus discloses that the company plans to issue approximately 441 million ordinary H-shares. The net proceeds, after deducting issuance expenses, are intended for: expanding production capacity and upgrading existing production bases, particularly focusing on global capacity expansion for automotive and consumer electronics businesses; investing in technology R&D, improving manufacturing processes, and enhancing smart manufacturing capabilities; investing in high-quality target companies in upstream/downstream or related industries; repaying part of existing interest-bearing bank borrowings; supplementing working capital and general corporate purposes.

It is worth noting that on the same day Luxshare Precision passed the HKEX listing hearing, the internationally renowned investment bank Goldman Sachs publicly expressed optimism about the company's stock in its latest research report, significantly raising its 12-month target price for Luxshare Precision from 50.15 yuan per share to 106 yuan per share, representing a potential upside of 52.8%. Analysts including Verena Jeng stated in the report that from 2025 to 2028, Luxshare Precision's revenue compound annual growth rate is expected to reach 22%, reflecting the bank's expectations for strong growth in the company's data center business, automotive electronics, and expansion into overseas OEM customers.

On June 24, the day after Luxshare Precision updated its post-hearing prospectus, the company's stock price quickly rebounded after a morning dip, surging sharply in the afternoon, hitting the daily limit before retreating slightly, closing up 8.2% for the day with a total market capitalization exceeding 550 billion yuan. Clearly, investors in the secondary market have already cast a vote of confidence for Luxshare Precision's upcoming Hong Kong listing.

Initial Success in Reducing Apple Dependence

In the A-share market, Luxshare Precision has long been known as the "top player in the Apple supply chain".

Public information shows that Luxshare Precision was founded in 2004, initially engaged in computer cable business. Its founder, Wang Laichun, was one of the first 150 employees recruited by Foxconn's Shenzhen factory in 1998. In 2010, Luxshare Precision successfully listed on the Shenzhen Stock Exchange, raising 1.261 billion yuan. Post-listing, the company successively acquired stakes in "Apple chain" companies such as Kunshan Lian Tao Electronics, successfully entering the Apple supply chain. Since then, through continuous expansion from single components to modules and then to whole system assembly, Luxshare Precision has gradually grown into a key supplier within the Apple industrial chain.

As the main manufacturer for Apple's AirPods, Luxshare Precision holds over 70% of the AirPods manufacturing share, handling the entire production process from acoustic module assembly to final testing. Simultaneously, Luxshare Precision is also the second-largest manufacturer for the iPhone, with a market share of approximately 15%-20%. Furthermore, the company provides precision structural components for the Apple Watch Series 10 and is the exclusive assembler for Apple's first headset, Vision Pro, responsible for key aspects such as optical module and sensor integration.

With the influx of Apple orders, Luxshare Precision's operating performance has achieved steady growth. Data shows that from 2015 to 2024, the company's revenue surged from 10.1 billion yuan to 268.8 billion yuan, a more than 25-fold increase over ten years. Within this, revenue from its largest business, consumer electronics, grew from 4.4 billion yuan to 233.1 billion yuan, a more than 50-fold increase over the decade.

However, while Luxshare Precision achieved rapid development through its partnership with Apple, it inevitably developed a severe case of "major customer dependency". Data shows that from 2021 to 2024, revenue from Apple accounted for over 70% of Luxshare Precision's total revenue for four consecutive years, leading investors to label it an "Apple manufacturer".

Against the backdrop of ongoing Sino-US trade tensions, Luxshare Precision, bearing the "Apple chain" label, was not favored by A-share investors, and its valuation faced sustained pressure. In April 2025, the intensification of the US-China trade war significantly impacted the consumer electronics sector, with stock prices of "Apple chain" listed companies, led by Luxshare Precision, continuing to plummet. Data shows that from April 2 to April 9, 2025, Luxshare Precision's stock price fell nearly 30% over five trading days, briefly pushing its market cap below 200 billion yuan.

On the other hand, due to the low gross margins of businesses like iPhone assembly, Luxshare Precision's overall profitability has declined noticeably in recent years. From 2020 to 2024, the company's sales gross margin dropped from 18.09% to 10.41%, showing a clear year-on-year decline. Evidently, the continuous narrowing of profit margins in its core business also became a significant factor pressuring Luxshare Precision's stock price.

In recent years, to reduce its excessive reliance on Apple, Luxshare Precision has continuously expanded into emerging businesses like automotive electronics and communications & data centers, aiming to unlock a second growth curve. In the automotive field, the company focuses on core electronic energy transmission and signal interaction, with products covering vehicle high/low-voltage wiring harnesses, high-speed wiring harnesses, high-speed connectors, and extending to smart cockpit systems, ADAS domain controllers, AR-HUD, and integrated powertrains. Additionally, Luxshare Precision established a joint venture with Chery Automobile, setting a goal to become a top-ten global Tier 1 supplier.

In the communications and data center field, Luxshare Precision has built a comprehensive solution based on "three core systems (high-speed optical/electrical interconnect, power management, thermal management)" and "two key dimensions (board-level interconnect, rack-level interconnect)". Specifically, in communication networks, the company focuses on core network equipment like base station antennas and RF units; in data centers, it concentrates on core modules like high-speed copper/optical interconnect, thermal management, and power management, providing end-to-end solutions for AI computing clusters.

Previous annual report data shows that for the full year 2025, Luxshare Precision achieved operating revenue of 332.344 billion yuan, a year-on-year increase of 23.64%. By business segment, automotive electronics and communications & data center businesses achieved revenues of 39.255 billion yuan and 24.568 billion yuan, accounting for 11.81% and 7.39% of total revenue, respectively. The share of consumer electronics business fell below 80% for the first time. Furthermore, revenue from its largest customer, Apple, has decreased to 57%, indicating initial success for its strategy to reduce Apple dependence.

Optical Module Business Drives Valuation Reassessment

While promoting revenue diversification, Luxshare Precision's expansion into emerging businesses like automotive electronics has also somewhat improved the company's overall gross margin level. According to the Hong Kong prospectus, for the full year 2025, the gross margins for the communications & data center and automotive electronics businesses were 18.1% and 15.6%, respectively, significantly higher than the gross margin for the consumer electronics business during the same period (10.3%).

Benefiting from the increased proportion of higher-margin businesses, Luxshare Precision's overall sales gross margin reached 11.6% in 2025, an increase of 1.5 percentage points from the previous year, initially reversing the trend of continuous annual gross margin decline.

In terms of revenue share, the automotive electronics business already exceeds 10% and is viewed by many investors as Luxshare Precision's second growth curve. However, compared to automotive electronics, the communications & data center business boasts a higher gross margin. Especially against the backdrop of strong global growth in AI computing demand, the data center business, centered on optical modules, copper connections, and optical connections, has become the most promising future aspect for Luxshare Precision.

As early as 2020, Luxshare Precision began R&D in optical modules, achieving mass production of 400G optical modules in 2023 and launching 800G optical module products. To date, the company's 800G optical modules have achieved mass production and shipment. It is reported that Luxshare Precision's 800G optical modules have passed compatibility tests with overseas mainstream brand switches from Nvidia, Arista, Juniper, etc., and demonstrated leading error code performance compared to competitors in head client 800G solution evaluations.

In April 2025, Luxshare Technology showcased a 1.6T optical module optical/copper interconnect full-link solution at OFC 2025, taking the lead in realizing 1.6T optical module implementation, currently in the customer verification stage. At the frontier technology level, Luxshare Precision continues to advance R&D in cutting-edge optical interconnect technologies like LPO/CPO and is proactively developing products related to 5nm technology.

While continuously advancing next-generation AI optical interconnect technologies, Luxshare Precision has also achieved breakthroughs in areas like thermal management and power management. In thermal management, the company's self-developed micro-channel thermal management products achieved successful batch production in 2025; in power management, its 800-volt system products have been implemented in core client projects and completed commercial application.

Some analysts believe that with the large-scale construction of data centers globally, the scale of Luxshare Precision's data center business may see significant growth in 2026-2027. In this regard, Goldman Sachs Securities pointed out in its latest report that due to Luxshare Precision's layout in high-speed copper connections, optical modules, and thermal management entering the commercialization stage, the CAGR for the company's telecom and data center business will reach 67%, with this business's sales revenue accounting for 19% of the company's total revenue by 2028.

However, compared to leading companies like InnoLight Technology and Eoptolink, Luxshare Precision's optical module business still shows a clear gap in revenue scale and profitability. In 2025, Luxshare Precision did not separately disclose specific revenue figures for its optical modules. However, according to the company's statements on investor platforms, the optical module business constitutes an extremely small part of its communications & data center segment, with this product's revenue share approximately 0.1% in 2025. Luxshare Precision also emphasized that its cooperation with leading North American CSPs (Cloud Service Providers) for optical modules is still in the early engagement stage, and previous market rumors about "Luxshare Precision securing an order for 10 million optical modules from a North American client" were false.

Furthermore, from an industry chain perspective, Luxshare Precision's focus in the optical module field is mainly on supporting manufacturing and system integration. Upstream core technology areas like optical chips and high-speed signal processing remain in the hands of specialized optical module manufacturers and upstream chip companies. In comparison, InnoLight Technology has successfully self-developed key components like high-precision lasers and micro-lens arrays, leading to a significant gap in profitability between the two. Data shows that in 2025, InnoLight Technology's optical module business gross margin reached 42.61%, while Luxshare Precision's overall gross margin for the communications & data center business was only 18.4%.

Overall, Luxshare Precision's optical module business remains in an early cultivation stage in terms of revenue scale, core technology, and business model, with its full potential yet to be realized. However, it is precisely this "hazy allure" of the optical module business that has become the strongest catalyst for Luxshare Precision's valuation leap, igniting bullish sentiment in the capital markets. Simultaneously, Luxshare Precision is actively leveraging the current "expectation premium" window granted by the capital markets to accelerate its Hong Kong listing process, thereby transforming this "hazy allure" into a capital engine that practically supports its global strategy.