Aux Shares Drop Amid Chinese Air Conditioner Launch in Hong Kong

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Shares of Aux Electric sharply declined during its debut on the Hong Kong Stock Exchange, marking a turbulent start for the leading Chinese air conditioner manufacturer. The company’s stock closed down 6.4% at HKD16.30 (around USD2.09), having earlier tumbled as much as 9.9%. The IPO was priced at HKD17.42 per share.

The company raised approximately HKD4.15 billion (about USD532 million) by selling 238.24 million shares, with net proceeds around HKD4 billion. These funds are primarily allocated for global R&D, upgrading advanced manufacturing and supply chain systems, and bolstering sales and operational channels.

According to its prospectus, the company will prioritize growth in international markets, investing further in overseas sales, manufacturing, and research and development to expand its global reach. Since its founding in 1994, the company has focused on both residential and commercial air conditioning systems. Since 2018, it has been expanding its international production facilities and R&D centers.

In the first quarter of this year, overseas revenue accounted for 57% of the total. Last year, net profit increased 17% to CNY2.9 billion (about USD406.7 million), and revenue jumped 20% to CNY29.8 billion (roughly USD4.2 billion).

Based in Ningbo, the company was the fifth-largest air conditioner supplier worldwide in 2024, capturing 7.1% of the global market, according to Frost & Sullivan.

However, its market share in China’s online residential air conditioning sector declined to 7% from 8% as of August 24, ranking fifth. Meanwhile, product prices decreased by 2.9% to CNY2,112 (around USD295), as per data from All View Cloud.

Majority ownership remains with Aux Holdings, which holds 81.9% of the issued shares post-listing. The company’s founder and largest shareholder, Zheng Jianjiang, serves as chairman and executive director. This marks his third listing, following Shanghai-based Ningbo Sanxing Medical Electric in 2011 and Aux International in Hong Kong in 2015.

Originally, the company had plans to list on the Shanghai Stock Exchange in 2016, completed its listing guidance in June 2023, but later shifted its focus to the Hong Kong market this year.