Leading Computing Power Server PCB Manufacturer Guanghe Technology's Hong Kong IPO: How to Balance High Valuation and Rapid Growth Behind Nearly 50% Discount in Offering

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Produced by: Sina Finance Listed Company Research Institute

Author: Happy

Guanghe Technology launched a global offering on March 12, with pricing expected on March 18 and listing on the Hong Kong Stock Exchange on March 20. The offering price cap is HKD 71.88 per share, with approximately 46 million shares issued, corresponding to a maximum issuance scale of HKD 3.31 billion. As a leading company in the global server PCB field, this time the company is entering the Hong Kong market with nearly 50% high discount and a strong cornerstone lineup, combining advantages in high-quality industry tracks and resilient performance growth. However, some operational risks and a slightly higher valuation compared to industry peers have attracted market attention. Its valuation and fundamentals merit ongoing observation.

As a core leader in the global server PCB industry, Guanghe Technology maintains a top industry position. Based on the cumulative revenue from 2022 to 2024, the company ranks third globally, with total revenue of $640 million, making it an important player in China’s server PCB sector. Driven by the rapid rise of the AI industry since early 2025, demand for computing infrastructure remains strong. The company’s stock price has continued to rise, nearly tripling since April 2025, and hit a historical intraday high of HKD 127.88 per share on March 11 before the IPO, reaching a record high; despite recent market fluctuations influenced by geopolitical factors, the stock has shown strong resilience, supported by solid fundamentals.

Regarding pricing discount, Guanghe Technology’s Hong Kong offering price cap is about 47.1% lower than its A-share closing price of HKD 119.90 on March 11, and nearly 49% below the pre-issuance closing price of HKD 124.10, indicating a significant discount. If the stock price remains stable before pricing, it could be the project with the largest issuance discount in Hong Kong market since 2026.

This nearly 50% high discount reflects multiple key considerations: First, the stock price just reached a historical intraday high of HKD 127.88, tripling since April 2025, in a continuous upward trend. Coupled with recent market discussions about potential AI industry bubbles, institutional investors have a clear demand for a safety margin. Second, the cornerstone investors’ lineup is outstanding among similar-scale projects, and the attractive discount aims to further attract high-quality investors.

The issuance did not include an over-allotment option or volume adjustment rights, aligning with the new market trend of A-to-H listings. Many companies voluntarily waive the greenshoe option, mainly because without it, their stocks can be included in the Hong Kong Stock Connect on the first day of listing, allowing southbound funds to provide incremental liquidity that can effectively replace the stabilizing role of traditional greenshoe mechanisms. Recent cases such as Megvii Smart, Zhaowei Mechanical & Electrical, and Wolong Nuclear Materials, which did not set greenshoe options, all saw their stocks rise on the first day of listing without breaking the offering price, providing a good market reference for Guanghe Technology.

On the cornerstone investment front, Guanghe Technology successfully attracted 10 entities (consolidated) to participate in this IPO, with a total investment of about $190 million, accounting for 44.9% of the base issuance scale. All participating institutions are well-known professional financial investors, with a balanced and high-quality investor structure.

Among them, UBS Global Asset Management, Huili, Hanya Investment, and Baring Private Equity invested a total of $85 million, representing 50% of the cornerstone investment; Yuanfeng Fund and Jinglin Fund jointly invested $60 million; Greater Bay Area Fund, Dajia Life, and ICBC Wealth Management invested a combined $35 million; external private equity fund My Alpha invested $10 million. Compared to other recent A-to-H projects, the company did not introduce industry investors, local government funds, or individual investors through resource swaps, reflecting strong market recognition of the company’s fundamentals.

On the operational side, the company exhibits certain operational characteristics. While key indicators remain stable, some potential risks are evident. Specifically, from 2022 to 2024 and the first three quarters of 2025, the top five customers accounted for 63.6%, 65.6%, 61.4%, and 59.3% of revenue, respectively; the top five suppliers’ procurement accounted for 53.7%, 58.2%, 63.1%, and 59.8%, respectively—both at relatively high levels and relatively stable, indicating dependence on customer and supplier concentration. Meanwhile, trade receivables and notes receivable have increased with revenue, reaching RMB 705 million, RMB 887 million, RMB 1.293 billion, and RMB 1.731 billion at the end of 2022-2024 and Q3 2025. Although receivables turnover days have remained stable at around 102-103 days over multiple years, attention is needed on future collection and the stability of upstream and downstream cooperation.

Overall, Guanghe Technology has significant fundamental advantages, with revenue and profit both increasing and profitability metrics continuously improving. Revenue grew from RMB 2.41 billion in 2022 to RMB 2.68 billion in 2023 and RMB 3.73 billion in 2024, with a three-year CAGR of 24.4%. Benefiting from strong growth in demand for infrastructure, revenue in the first three quarters of 2025 reached RMB 3.84 billion, up 43.1% year-over-year, showing rapid growth.

Profitability is even more impressive, with net profit attributable to shareholders of RMB 280 million, RMB 410 million, and RMB 680 million in 2022-2024, with a three-year CAGR of 55.5%. In the first three quarters of 2025, net profit was RMB 180 million, and the company expects full-year net profit attributable to shareholders to be between RMB 980 million and RMB 1.02 billion.

Meanwhile, the company’s profitability metrics are steadily improving: gross margin increased from 26.1% in 2022 to 34.8% in Q3 2025; net profit margin rose from 11.6% in 2022 to 18.7% in Q3 2025, with core profitability indicators showing a steady upward trend.

However, from a valuation perspective, the company’s Hong Kong listing valuation appears somewhat high, with certain premiums over comparable A-share companies. The core of valuation rationality is whether the valuation is within a reasonable range—regardless of fundamental strength, only valuations within a reasonable range can truly reflect investment value.

Specifically, Guanghe Technology’s current market cap implies a PE ratio of 54.1x for 2025 and a projected PE of 36.3x for 2026. The 2025 valuation is slightly above the average of comparable A-share companies, and the 2026 forecast is the highest among them. In terms of scale, comparable A-share companies have significantly larger revenue and profit figures, lacking scale support for the premium valuation.

From a PEG perspective, this feature is even more pronounced: the company’s PEG ratios for 2025 and 2026 are 1.1 and 0.7, respectively, significantly higher than most A-share comparables. The main reason is that its earnings growth rate does not have a differentiated advantage. Comparing with industry leaders like Shenghong Technology and Shennan Circuit, which have higher earnings growth, their PEGs are lower; only Huadian Shares has a slightly lower growth rate, but its PEG remains below Guanghe’s 2025 level.

More critically, as a smaller-scale company, high growth is typically key to breaking into the market and supporting valuation. However, industry expectations suggest that companies like Shenghong Technology and Shennan Circuit will maintain high profit growth in 2026, while Guanghe’s growth rate has not further widened the gap. This weakens the “growth premium” support at the valuation level, exacerbating the current overvaluation issue.