(Yicai) Sept. 2 -- Shares of Aux Electric, a major Chinese manufacturer of air conditioners, closed 5.4 percent lower on their first day of trading on the Hong Kong Stock Exchange.

After plunging by as much as 10 percent earlier today, Aux [HKG: 2580] finished at HKD16.30 (USD2.09) a share. Its initial public offering price was HKD17.42. The benchmark Hang Seng Index lost 0.5 percent, after climbing 27 percent since the end of last year.

Ningbo-based Aux raised HKD4.15 billion (USD532 million) by selling 238.24 million shares, with net proceeds of around HKD4 billion. It will mainly use the funds for research and development, upgrading its smart manufacturing systems and supply chain management, and strengthening sales and operational channels.

Established in 1994, Aux makes residential and commercial air conditioners and has been expanding its overseas production bases and R&D centers since 2018. According to its listing prospectus, the firm is looking to overseas markets for future growth, with plans to further invest in international sales, production, and R&D to expand its worldwide operations.

Overseas revenue accounted for 57 percent of Aux’s total income in the first quarter of this year. Net profit rose 17 percent to CNY2.9 billion (USD406.7 million) last year, while its revenue jumped 20 percent to CNY29.8 billion (USD4.2 billion).

Hong Kong has stormed back into the spotlight this year as the world's premier IPO venue, driven in particular by strong demand from Chinese mainland firms seeking dual listings and high-tech offerings. It was the premier global fundraising hub in the first half, as listing proceeds surged eight times to USD14 billion, surpassing the entire amount raised last year.

Aux was the world's fifth-largest air con supplier by sales in 2024, with a 7.1 percent global market share, according to Frost & Sullivan. 

Its share of China’s online residential air con market had shrunk to 7 percent from 8 percent as of Aug. 24 from a year earlier, ranking the company fifth, while the average price of its products fell 2.9 percent to CNY2,112 (USD295), per data from market intelligence firm All View Cloud.

Aux Holdings is Aux Electric's controlling shareholder, owning 81.9 percent of the issued shares post-listing. Zheng Jianjiang, the founder of Aux Holdings and its largest shareholder, is chairman and executive director of Aux Electric. This is his third listed firm, after Ningbo Sanxing Medical Electric went public in 2011 and Aux International in 2015.

Aux had initially planned to list on the Shanghai Stock Exchange in 2016 and completed its listing guidance in June 2023 before pivoting to the Hong Kong bourse this year.

Editor: Martin Kadiev