{"text":[[{"start":7.8,"text":"Like the millions of electronic gadgets it makes and sells each year, Huaqin Co. Ltd. (3296.HK; 603296.SH) is a complex machine with many moving parts."}],[{"start":20.8,"text":"The company is quite profitable, reporting double-digit profit gains over the last three years, including 41% growth last year, and a return on equity (ROE) rate that rose more than six percentage points to 16.9% in 2025."}],[{"start":38.2,"text":"To broaden its business scope and raise its pressured margins, the company is revving up its R&D spending on new product areas like data centers and automotive electronics. It’s also making strategic acquisitions to take it into areas like robotics, using its cash flow to fund those campaigns. Beyond acquisitions, the company has also set up its own in-house robotics R&D team. With the Hong Kong listing, it’s now turning to international investors to help fund those drives. Banking heavyweights BofA Securities and CICC underwrote the deal, which raised HK$4.46 billion ($654 million)."}],[{"start":79.25,"text":"The company raised the money after selling 58.5 million shares for HK$77.70 each. The stock opened 13.6% higher on Thursday at HK$87.55."}],[{"start":94.4,"text":"The IPO will complement Huaqin’s existing listing in Shanghai, following a recent trend by Chinese tech companies making similar second listings to tap Hong Kong’s more international investor pool to raise their global profiles. Huaqin is already quite a global company, boasting manufacturing facilities in Vietnam, Mexico and India and getting more than half of its revenue from overseas customers."}],[{"start":117.55000000000001,"text":"Huaqin was founded in 2005 by Qiu Wensheng, a veteran of telecoms giant ZTE, initially as a mobile phone ODM. It was the world’s second largest smartphone ODM in 2024 with about a quarter of the global market, and it ranks as the world’s largest smartphone ODM, based on cumulative global smartphone ODM shipments from 2020 to 2024. As its handset business grew, the company continued expanding into a wide range of other product categories. Those include wearable electronics and tablet computers, which Huaqin has rapidly built up to become the world’s top ODM for both categories, according to its prospectus."}],[{"start":159.05,"text":"The company has also found big business in laptop computers, as well as servers and switches used in data center – areas that have seen big growth lately with the rapid rise of AI. It’s also building a business in connected products based on AIoT technology. Finally, it’s exploring new areas including automotive electronics and robots, in its ongoing quest to not only grow its business but move into new fields with less competition and higher margins."}],[{"start":186.60000000000002,"text":"The rapid expansion, much of it dating to a period starting about a decade ago, kicked off a period of rapid growth for Huaqin’s top-line revenue. That growth continued last year, as the company’s revenue jumped 55% to 171 billion yuan ($25.1 billion) in 2025 from 110 billion yuan the previous year, accelerating from a 29% increase the previous year."}],[{"start":212.90000000000003,"text":"Revenue from the company’s core mobile terminals business, which includes smartphones, wearables and tablets, rose 57% to 80.2 billion yuan last year, accounting for about 47% of revenue. Its AIoT business grew by a faster 69% for the year to 7.88 billion yuan, but accounted for a much smaller 4.6% of revenue, signaling room for future significant gains. Its innovative businesses grew the fastest, more than doubling last year to 3.48 billion yuan, though that segment still also accounts for a relatively modest 2% of revenue."}],[{"start":252.50000000000003,"text":"Data center rising star"}],[{"start":254.50000000000003,"text":"Huaqin’s computing and data center segment was among its standout performers last year, which includes laptop computers and switches and servers used in data centers. That segment has roared to life lately with the recent AI boom, which has led to a parallel boom in construction of new data centers to house the huge computing and storage capacity required for many AI applications."}],[{"start":277.1,"text":"As that happened, average selling prices (ASPs) for Huaqin’s computing and data center segment jumped 83% to 4,001 yuan for an average item last year from 2,188 yuan a year earlier, reflecting growing sales of AI servers that are typically more expensive than ordinary servers. Overall revenue from the segment — which covers both computing products like laptops and data center equipment — rose 52% to 75.5 billion yuan last year, accounting for 44% of the company’s total."}],[{"start":311.35,"text":"Huaqin supplies China’s largest cloud operators, including Alibaba, Tencent and ByteDance, as a key vendor across its data center product lines. Its portfolio covers AI servers, general-purpose servers, switches and AI racks. The company has built an early lead in AI rack systems — integrated units that bundle computing, networking, power and liquid cooling — and is one of the few companies that can deliver both self\u001edeveloped switches and AI servers for supernode architectures. Its works with GPU platforms from Nvidia, AMD, Intel and domestic AI chipmakers."}],[{"start":347.15000000000003,"text":"Real estate consultancy JLL forecasts that data center operators globally will add nearly 100 GW of new capacity between 2026 and 2030, nearly doubling capacity over that time. That means Huaqin’s computing and data center segment is likely to emerge as its leading growth engine, potentially even overtaking mobile terminals as its biggest revenue source."}],[{"start":374.05,"text":"Huaqin has made some strategic acquisitions and investments to move in that direction. In one move, it purchased 75% of Shenzhen Haocheng Co. Ltd., which sells connectivity products as well as household cleaning and companion robots, in late 2024. In another major investment, it paid about 2.4 billion yuan last August for 6% of Nexchip Semiconductor, a maker of many of the different types of chips used in electronics. That tie-up could help Huaqin control costs and ensure a steady supply of the chips that are core components in most of its products."}],[{"start":408.1,"text":"On its bottom line, Huaqin’s profit rose to 4.13 billion yuan last year from 2.92 billion yuan in 2024. But we should also point out its operating cash flow turned negative last year, which it blamed on efforts to “support our rapid business growth during the period.” That said, the company still has plenty of cash to support its diversification, with 10.3 billion yuan at the end of last year. And it will have considerably more following the Hong Kong IPO."}],[{"start":447.65000000000003,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1777289533_8610.mp3"}