On November 7, Futu News reported, $APT ELECTRONICS (02551.HK)$ Today, the dark market opened high, closed up 15.24% at HK$4.16, with a transaction volume of HK$27.6823 million and a total market value of HK$2.214 billion; 1000 shares per lot, excluding handling fees, earning HK$550 per lot.
Market source: Futu Securities >
$APT ELECTRONICS (02551.HK)$ Futu's margin financing has been oversubscribed by 5267.6 times, exceeding the 2503 times oversubscription at that time, aspiring to be the "over-subscription king" of this year's Hong Kong stock IPO, with the expected highest subscription multiple in the entire market potentially reaching 8812.8 times. $UBOT HOLDING (08529.HK)$
Investment highlights
Continuously deepening its business: According to the information from Zhishizixun, the company is one of the first in China to mass produce high-power inverted LED products. From its establishment to 2010, the company mainly focused on the research and development, production, and sales of high-power inverted LED chips. Since 2010, the company has shifted its business focus from LED chips to LED devices. Leveraging the previously accumulated inverted LED technology, the company continuously iterates on the core technology of inverted LED packaging, white light packaging, and integrated packaging, while rapidly increasing production capacity. Since 2014, relying on independently developed LED devices, combined with electronic design and structure, as well as optical system technology, the company has extended its business to the research, production, and sales of LED modules.
Stable customer base: With excellent research and development capabilities and stable product quality, the company has formed a stable customer base. The company's good reputation and visibility in the industry have helped establish long-term cooperative relationships with customers and end users, including international first-line lighting companies such as Xin Nuofei (formerly known as Royal Philips Lighting), Samsung, Panasonic, Toyota Synthetic, and well-known TV brands such as Hisense, TCL, Skyworth, Changhong, LG, and Samsung. Despite regulatory challenges, through the company's strategic expansion, it has established cooperative relationships with more than twenty domestic car OEMs, automotive brands, and first-tier suppliers, including Geely Auto, Lynk & Co, Zeekr, Infini, Lotus Technology, GAC, Chongqing Changan Automobile, Li Auto Inc, Marai, and Xiaodi, industry leaders.
Risk warning
Intense industry competition: The competition in the LED intelligent visual industry is fierce, with over 0.3 million market participants. China has the world's largest LED intelligent visual industry, with a market size of RMB 440.2 billion in terms of revenue in 2023. LED intelligent visual can be categorized by application into automotive intelligent visual, high-end lighting, and new display types. In terms of revenue in 2023, the combined market shares of the top five manufacturers in China's automotive intelligent visual market, high-end lighting market, and LCD TV backlight display market are 49.2%, 39.3%, and 66.6% respectively. Competitors of the company may be able to more rapidly and effectively respond to new or changing opportunities, technologies, standards, or customer demands, and may have the ability to initiate or withstand significant industry developments or regulatory changes.
Customer concentration: During the period of past performance, a majority of the company's sales of automotive intelligent visual products were attributed to Geely Group enterprises. In 2021, 2022, and 2023, as well as the five months ended May 31, 2024, revenues from Geely Group enterprises were RMB 50.6 million, RMB 0.35 billion, RMB 0.706 billion, and RMB 0.327 billion respectively, accounting for 3.6%, 24.8%, 38.0%, and 38.8% of the company's total revenue for the respective periods. The company expects revenue from Geely Group enterprises to continue to increase in the future. If the business relationship with the main customers is interrupted, it may have a significant adverse impact on our business, financial condition, and operating performance.
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