Estun Automation initiated its global offering on February 27, with pricing set for March 5 and trading expected to commence on the Hong Kong Stock Exchange on March 9. The price range for the offering is HK$15.36 to HK$17.00 per share, with a base offering size of approximately 96.78 million shares, corresponding to a fundraising scale of HK$1.49 billion to HK$1.65 billion. Additionally, the company has set an over-allotment option of 14.52 million shares; if fully exercised, the total offering size could increase to between HK$1.71 billion and HK$1.89 billion.
Regarding the pricing, Estun's Hong Kong share price range represents a discount of only 30.1% to 36.9% compared to its A-share closing price of 21.55 yuan on March 4. This discount is not only the smallest among the three concurrent A+H listing projects but also appears less attractive compared to A+H listings since 2026. For instance, the Hong Kong share discounts for Montage Technology and GigaDevice, both companies with market capitalizations exceeding 100 billion yuan, exceeded 40%. Furthermore, when compared to Sanhua Intelligent Control, a leading humanoid robotics company that listed in Hong Kong in 2025, which had a discount of 44.7% as of March 4, Estun's pricing demonstrates significantly weaker discount appeal.
However, against the backdrop of ongoing geopolitical tensions and overall cautious market sentiment, short-term volatility risks for new listings have increased substantially. In this context, the stabilizing role of the greenshoe mechanism has become more critical. Estun is the only one among the three concurrent A to H listing projects to have implemented a greenshoe mechanism, providing one of the few supports for share price stability during its Hong Kong IPO.
Nevertheless, the composition and subscription level of the company's cornerstone investors reflect relatively low market recognition. A total of seven cornerstone investors are participating in this IPO, committing approximately $66.92 million in aggregate, which represents 35.2% of the base offering size. This overall subscription ratio is modest, and the cornerstone investor group lacks influential institutional investors from the Hong Kong market.
Among financial investors, Harvest Fund and Junyi Capital invested $20 million and $10.24 million respectively, neither of which are top-tier influential institutions in the Hong Kong market. Four listed companies—Hengtong Optic-Electric, Zhiyuan Holdings, Haitian International, and Wangyu Technology—collectively invested $33.68 million. However, the prospectus does not disclose any business cooperation relationships between these companies and Estun, with only Hengtong Optic-Electric and Haitian International potentially having minor business synergies.
Notably, Qianhai Hezhong Investment, a wholly-owned platform of individual investor Tan Xiaolong, also participated, subscribing for $3 million. While regulations do not prohibit individual investors from participating as cornerstone investors in Hong Kong listings, their involvement may indicate that Estun did not gain sufficient recognition from institutional investors during its preliminary market promotion efforts.
The low market recognition stems primarily from ongoing pressures on the company's fundamental operations in recent years. Issues such as significant earnings volatility, weakening profitability in core businesses, slower-than-expected overseas expansion, and high debt pressure are prominent. Furthermore, against a backdrop of weak profit recovery, the company's valuation appears severely elevated. The combination of these multiple adverse factors has led to insufficient market confidence.
The company's performance deteriorated significantly in 2024, with both revenue and profits under pressure. Revenue for 2022-2024 was 3.881 billion yuan, 4.652 billion yuan, and 4.009 billion yuan respectively, representing a 13.8% contraction in 2024 compared to 2023. Revenue from the core industrial robotics and smart manufacturing systems business decreased by 16.04% year-over-year. The wholly-owned German subsidiary, Cloos, experienced a substantial revenue decline due to weak domestic heavy industry demand, a sluggish European market, and inflationary pressures. Revenue from the solar industry also decreased notably. On the profitability front, the situation turned sharply to a significant loss. Net profit attributable to shareholders was 166 million yuan and 135 million yuan in 2022 and 2023 respectively, but the company reported a net loss of 810 million yuan in 2024, a year-over-year decrease of 700.1%. This loss nearly wiped out the cumulative net profit of 931 million yuan achieved since its initial listing in 2015. Contributing to the loss were a 345 million yuan goodwill impairment related to four subsidiaries and a 122 million yuan asset impairment related to receivables and inventory, totaling 467 million yuan in impairments that directly exacerbated the loss.
Although the company's revenue showed signs of recovery in 2025, profit improvement remained weak, core business profitability continued to decline, and the company's valuation appeared severely high relative to its modest profit scale. On the revenue front, the company achieved breakthroughs in the automotive, electronics, and lithium battery industries, recording revenue of 3.80 billion yuan for the first three quarters of 2025, a 13.0% increase year-over-year. However, the recovery in profitability was severely insufficient. Net profit attributable to shareholders for the first three quarters of 2025 was only 28 million yuan. The full-year 2025 forecast indicates a net profit attributable to shareholders between 35 million and 50 million yuan, with a mere 6 million to 8 million yuan after excluding non-recurring items. While this represents a return to profitability, the profit level remains significantly lower than that of 2022 and 2023. Based on the company's A-share market capitalization and the estimated minimum Hong Kong offering size, its Hong Kong market capitalization would reach approximately HK$22.4 billion, corresponding to a staggering price-to-earnings (P/E) ratio of 402x to 574x for 2025. This indicates a severe mismatch between profitability and valuation, far exceeding reasonable industry benchmarks. The gross profit margin for the core business also declined further. The gross margin for the industrial robotics and smart manufacturing systems business was 27.8% in the first three quarters of 2025, down 3.9 percentage points from 2022. The gross margin for the automation core components and motion control systems business was 29.7%, down 5.3 percentage points from 2022.
The company's overseas business expansion continues to face challenges, with both the absolute value and proportion of overseas revenue declining. As it lists in Hong Kong, it will face greater scrutiny from international investors, and this operational weakness may become a significant obstacle to gaining recognition from overseas funds. Overseas revenue for 2022-2024 was 1.31 billion yuan, 1.59 billion yuan, and 1.37 billion yuan respectively. It further decreased to 1.12 billion yuan in the first three quarters of 2025. The proportion of revenue from overseas operations also declined from 34.3% in 2023 to 29.4% in the first three quarters of 2025, contradicting the company's strategic plan to expand internationally. The current state of ineffective overseas market development is unlikely to meet the expectations of Hong Kong's international investors regarding the company's overseas business layout and earnings contribution.
On the debt front, the company maintains a high debt level, with particularly concerning short-term solvency, indicating persistent high financial risk. As of the third quarter of 2025, the company's asset-liability ratio remained high at 80.54%, albeit slightly down from 81.34% at the end of 2024. Current assets stood at 5.855 billion yuan against current liabilities of 6.025 billion yuan for the first three quarters of 2025, resulting in a current ratio of 0.97, down from 1.01 at the end of 2024. This indicates that current assets are no longer sufficient to cover current liabilities, highlighting significant short-term liquidity pressure.
It is worth noting that an announcement from Estun on March 2 revealed the company's participation in an asset swap transaction involving Nanjing Chemical Fiber's acquisition of Nanjing Craft. Estun injected its 3% stake in Nanjing Craft into the deal, receiving a 1.89% stake in Nanjing Chemical Fiber in return. Based on the closing price on March 2, the fair value of this equity is estimated at 180 million yuan, representing an increase of 130 million yuan over its original book value. This transaction is expected to significantly boost the company's performance in the first quarter of 2026. However, this gain is classified as a change in the fair value of financial assets and does not constitute core operating profit. It is non-recurring and cannot serve as a long-term support for earnings. For Estun to gain sustained recognition from the capital markets, it must achieve substantive improvements in the operational performance of its core industrial robotics business, fundamentally enhancing its operational profitability and market competitiveness.