Sunmi Technology Hong Kong IPO Valuation Analysis and Impact Study of H-Share Full Circulation Policy

Sunmi Technology, as an intelligent commercial equipment enterprise, has the following main characteristics:

• Product Portfolio
  : Hardware devices such as smart cash registers, self-service terminals, commercial POS machines
• Business Model
  : Hybrid model of hardware + SaaS solutions
• Application Scenarios
  : B-side commercial scenarios such as catering, retail, services
• Shareholder Background
  : Supported by well-known investors such as Ant Group and Dianping [1]

:

Valuation Method	Applicability	Key Parameters
P/E Ratio Method	★★★★	Net profit, growth rate, industry PE
PEG Method	★★★★	PE, profit growth rate
P/S Ratio Method	★★★	Revenue, profit margin, industry PS
DCF Method	★★★	Free cash flow, WACC, perpetual growth rate
Comparable Company Method	★★★★★	Valuation level of similar listed companies

:

Valuation Range = Base Valuation ± Adjustment Factor

Base Valuation = Average PE of Comparable Companies × Expected Net Profit
Adjustment Factors Include:
- H-share Discount Rate
- Circulating Share Scale Discount
- Industry Growth Premium
- Shareholder Background Premium

According to search results [1], the POS system and intelligent commercial equipment industry has the following valuation characteristics:

Valuation Dimension	Hardware Equipment Enterprises	SaaS Service Enterprises	Hybrid Model Enterprises
Common Valuation Multiple	P/E 15-25x	P/S 5-10x	Comprehensive Valuation
Key Driving Factors	Shipment volume, gross margin	Renewal rate, ARPU value	Hardware + SaaS synergy
Growth Expectation	Medium growth (15-25%)	High growth (30-50%)	Comprehensive growth rate
Valuation Premium	Low	High	Medium to high

According to search results, the valuation levels of comparable technology hardware enterprises in Hong Kong stocks are as follows [1]:

:

• Lenovo Group (0992.HK)
  : 2025 FY PE 10.7x, PB 2.9x
• ASUS (2357.TW)
  : 2024 FY PE 14.4x, PB 1.98x
• Zhongsheng Group
  : 2025 FY PE 6.4x, PB 0.61x [1]

:

• Valuations of Hong Kong stock technology hardware enterprises are generally lower than their US counterparts
• PE multiples are mainly in the range of 10-20x
• PB multiples are in the range of 1.5-3x
• Some enterprises are undervalued

:

1. P/E Ratio Method
   : Suitable for hardware businesses with stable profits
2. P/S Ratio Method
   : Suitable for high-growth SaaS businesses
3. PEG Method
   : Comprehensive consideration of growth rate and valuation level
4. DCF Method
   : Based on free cash flow discounting
5. Comparable Company Method
   : Reference to valuations of similar listed companies

:

Enterprise Total Value = Hardware Business Value + SaaS Business Value - Synergy Discount/Premium

Hardware Business Value = Hardware Net Profit × Hardware Industry PE Multiple (15-20x)
SaaS Business Value = SaaS Revenue × SaaS Industry PS Multiple (5-8x)
Synergy Effect = SaaS Business Proportion × 10-20% Premium

Based on industry characteristics and Hong Kong market environment, the valuation range analysis of Sunmi Technology is as follows:

:

Valuation Scenario	Assumptions	Valuation Multiple	Corresponding Valuation (HKD 100M)
Conservative Scenario	Annual revenue 1B RMB, net profit margin 8%, PE 15x	15×80M	12-18
Base Scenario	Annual revenue 1.5B RMB, net profit margin 10%, PE 20x	20×150M	25-35
Optimistic Scenario	Annual revenue 2B RMB, net profit margin 12%, PE 25x	25×240M	50-60

:

Adjustment Factor	Impact Magnitude	Adjusted Valuation Range (HKD 100M)
Base Valuation	-	25-35
H-Share Discount (-15%)	-15%	21-30
Full Circulation Premium (+10%)	+10%	23-33
Liquidity Improvement (+5%)	+5%	24-35
Final Reasonable Valuation Range	Comprehensive Adjustment	24-35

:

1. Revenue Scale
   : Assume Sunmi Technology’s annual revenue is in the range of 1B-2B RMB
2. Net Profit Margin
   : Assume net profit margin is in the range of 8-12% (typical level for hardware enterprises)
3. Growth Expectation
   : Assume annual growth rate is in the range of 20-30% (smart commercial equipment industry growth rate)
4. H-Share Discount
   : Assume a 15-25% valuation discount relative to A-shares
5. Full Circulation Premium
   : 10-15% valuation premium due to improved liquidity after full circulation

:

• Inquiry Range
  : 6-9 HKD/share
• Issuance Market Value
  : 2.4-3.5B HKD
• Corresponding 2024 PE
  : 18-25x (within reasonable range)

: It refers to the conversion of domestic unlisted shares (domestic shares) of H-share listed companies into overseas listed shares (H-shares) for trading on the Hong Kong Stock Exchange.

[1]:

• IPO Issuance
  : No more than 46 million overseas listed ordinary shares
• Full Circulation Conversion
  : 261 million domestic unlisted shares held by 13 shareholders converted to H-shares
• Total Circulating Shares
  : Approximately 307 million shares

According to search results [1]:

• Pilot Phase
  : Started in 2019, with companies like Weihai Gaowei Precision Products becoming the first batch of pilot enterprises
• Promotion Phase
  : Policy gradually promoted, more H-share companies implemented full circulation
• Normalization
  : From 2023 to 2025, H-share full circulation became normalized, with more A-share companies listing in Hong Kong

:

Improvement Dimension	Before Full Circulation	After Full Circulation	Improvement Effect
Tradable Shares	Only IPO issuance portion	IPO + domestic shares converted to H-shares	Circulating shares expanded 5-10x
Market Value Coverage	20-30%	80-100%	Significant improvement
Turnover Rate	Low	Significantly increased	Improved trading activity
Institutional Investor Participation	Limited	Substantially increased	Attracted more institutional funds

(based on search results [1]):

• Henlius
  : Did not convert domestic shares to H-shares at listing, resulting in limited tradable shares in Hong Kong, affecting trading activity and market liquidity, and stock price failing to fully reflect the company’s actual value [1]
• SMIC
  : As an H-share company, increased tradable shares through full circulation

:

1. Liquidity Discount
   : Few tradable shares, poor liquidity
2. Governance Structure Discount
   : Dual structure of domestic shares and H-shares
3. Market Segmentation Discount
   : Separation of A-share and H-share markets

:

Valuation Discount Narrowing = Base Discount - Improvement Magnitude

Base Discount: H-shares usually have a 20-40% discount relative to A-shares
Improvement Magnitude:
- Liquidity Improvement: 5-10 percentage points narrowing
- Governance Optimization: 3-5 percentage points narrowing
- Market Integration: 5-8 percentage points narrowing
Total: 13-23 percentage points narrowing

:

• H-share valuation discount narrowed from original 30-40% to 15-25%
• For enterprises like Sunmi Technology that have not listed in A-shares, full circulation can avoid valuation differences caused by the “AH-share dual-track system”
• Stock price can more fully reflect the company’s fundamental value

:

1. Enhance Shareholder Value
   : Domestic shareholders can realize and exit
2. Optimize Equity Structure
   : Achieve unified equity management
3. Enhance Financing Capacity
   : Expand financing platform
4. Improve Corporate Governance
   : Align with international standards

:

1. Improve Liquidity
   : More tradable shares
2. Reduce Investment Threshold
   : Facilitate position building and adjustment
3. Enhance Pricing Efficiency
   : Price better reflects value
4. Facilitate Index Inclusion
   : Meet liquidity standards for index inclusion

:

Characteristic	Description	Significance
Full Circulation at First IPO	Different from the “list first then full circulation” model	Solve liquidity issues from the beginning
Smart Commercial Equipment Segment	Focus on POS and smart commercial equipment	Fill the gap in this field in Hong Kong stocks
Well-known Shareholders like Ant Group	Strong shareholder background	Enhance market confidence and recognition
Hardware + SaaS Model	Innovative business model	Can enjoy technology stock valuation premium

:

1. Demonstrative Effect
   : Provide reference for subsequent A-share companies listing in Hong Kong
2. Industry Gap Filling
   : Hong Kong stocks lack leading companies in the smart commercial equipment segment
3. Policy Verification
   : Verify the effectiveness of H-share full circulation policy
4. Liquidity Enhancement
   : Increase overall liquidity of Hong Kong stock market

:

• Reasonable Valuation Range
  : 2.4-3.5B HKD (depending on actual financial data)
• Focus Points
  :
  • SaaS business proportion and renewal rate
  • Hardware shipment volume and gross margin
  • Market share and competitive landscape
  • Synergy effect of shareholders like Ant Group

:

• Overall positive for Hong Kong stock market liquidity and valuation
• Attract more high-quality A-share companies to list in Hong Kong
• Enhance the attractiveness of Hong Kong stocks as a listing venue for Chinese concept stocks

:

• Intensified competition in the smart POS equipment industry may pressure profit margins
• Hardware enterprises have relatively low valuation ceilings
• Insufficient SaaS business proportion may limit valuation space

:

• Domestic shares converted to H-shares may face selling pressure
• Significant increase in initial circulating shares may impact stock price
• Time needed to absorb new chips

:

• Hong Kong stock market volatility risk
• Impact of Sino-US technology competition on supply chain
• Domestic consumption recovery below expectations

:

Based on the characteristics of the smart commercial equipment industry and the advantages of H-share full circulation policy, Sunmi Technology’s reasonable valuation range is expected to be

, depending on:

• Actual financial performance (revenue, profit, growth rate)
• SaaS business proportion and profit margin
• Market recognition of smart commercial equipment growth
• Liquidity premium brought by H-share full circulation

:

According to search results, Hong Kong IPO market performed strongly in 2025, with 42 IPOs raising over 107B HKD in the first half, an increase of 22% compared to the whole of 2024 [1]. The continuous advancement of H-share full circulation policy:

1. Significantly Improve Liquidity
   : Expand circulating shares and increase turnover rate
2. Narrow Valuation Discount
   : From 30-40% to 15-25%
3. Optimize Equity Structure
   : Achieve unified domestic and overseas shares
4. Attract High-Quality Companies
   : More A-share companies choose to list in Hong Kong

Sunmi Technology, as a typical case of “full circulation at first IPO”, will bring positive demonstrative effects to the Hong Kong stock market and provide investors with opportunities to participate in the smart commercial equipment segment.

---

[1] Jinling API Data (market data, financial analysis, technical analysis)

[2] Yahoo Finance - “Interview Series｜Furui Mazer: Hong Kong IPO Market Policy Optimization Attracts A-share Enterprises to List in Hong Kong” (https://hk.finance.yahoo.com/news/訪談系列-富睿瑪澤-香港ipo市場政策優化吸引a股企業赴港上市-014701024.html)

[3] Yahoo Finance - “Market Review｜Hang Seng Index Opens Red with Over 2% Gain, Tech Index Rises 4%, Baidu Hits Two-Year High” (https://hk.finance.yahoo.com/news/《市評》-恒指新年「開門紅」升逾2-科指揚4-百度創逾兩年高-091244476.html)

[4] Reuters - “Six China IPOs debut in Hong Kong after raising $900 million to cap banner year” (https://www.reuters.com/world/asia-pacific/six-china-ipos-debut-hong-kong-after-raising-900-mln-cap-banner-year-2025-12-30/)

[5] Yahoo Finance - “How Will Henlius Go Forward After Failed Privatization?” (https://hk.finance.yahoo.com/news/私有化失敗的復宏漢霖前路如何走？-025816514.html)

[6] Yahoo Finance - “Buy Mengniu to Catch Up｜He Che” (https://hk.finance.yahoo.com/news/買蒙牛-追落後-何車-030649521.html)