Impact of Meig Smart's H-share Listing in Hong Kong on Valuation and Financing Capacity

1. Valuation Benchmark and Current Market Pricing
   
   Currently, Meig Smart’s A-share market capitalization is approximately USD 10.8 billion, with a static P/E ratio of about 69.8x, PB of 6.54x, ROE of only 9.7%, and profit margins at a low level. Additionally, its latest quarterly revenue in 2025 was less than RMB 1 billion, contributing little to profits—reflecting mainland investors’ cautious pricing of its profitability [0]. Therefore, valuation still focuses mainly on growth expectations rather than current earnings.

2. H-share Listing as a Re-valuation Catalyst
   
   Listing H-shares on the Hong Kong Stock Exchange will give Meig Smart dual liquidity in the A+H markets, attracting international and Hong Kong institutional investors and potentially driving its valuation closer to international peers. On one hand, the Hong Kong market’s valuation system usually places more emphasis on market share, product layout, and growth prospects, and can give higher premiums to companies with strategic growth businesses such as 5G communication equipment and AIoT terminals. On the other hand, H-share pricing will reference the valuation range of Hong Kong industry peers (e.g., OFILM, AAC Technologies), providing an anchor for Meig Smart’s repricing and helping to alleviate the valuation discount caused by the current high PE in the A-share market.

3. Enhancing Valuation Transparency and Market Recognition
   
   The H-share market has stricter requirements for corporate governance, financial report disclosure, and cross-border compliance. After listing, it can enhance the transparency of Meig Smart’s information in the capital market. Combined with its brand and R&D capabilities already established in the A-share market, it is expected to attract longer-term funds that prefer overseas markets, expand the investor structure, reduce the impact of single-market fluctuations on stock prices, and further stabilize the valuation foundation.

1. Expanding Financing Pool and Optimizing Capital Structure
   
   Currently, Meig Smart’s free cash flow is negative—its 2024 FCF was approximately -RMB 157 million [0], reflecting its need for external funds to support R&D and production line investment. After completing the H-share listing, the company can directly issue H-shares on the Hong Kong Stock Exchange, leveraging the financing capacity denominated in Hong Kong dollars and US dollars to enhance capital liquidity, ease the financing pressure of the single RMB market, and increase the capital supply available for global expansion and customer development.

2. Improving Financing Efficiency and Cost Management
   
   Through H-share issuance, not only can it raise funds at the time of listing, but it can also achieve more flexible capital operations by leveraging the Hong Kong Stock Exchange’s more mature refinancing mechanisms (including diversified tools such as placements, preferred shares, and convertible bonds). In addition, dual listing can enhance market attention and analytical coverage of its brand, helping the company obtain more competitive financing terms when it needs large-scale projects or merger and acquisition expansion in the future.

3. Liquidity Improvement and Shareholder Returns
   
   Hong Kong stock investors prefer tech hardware companies with high liquidity and stable fundamentals. H-share listing will effectively increase its trading volume and valuation performance, helping to reduce the implicit discount of equity financing; at the same time, it can support future shareholder return plans (such as dividends and share repurchases) through lower capital costs, further enhancing market confidence in its financing capacity.

Overall, against the background that Meig Smart has obtained the overseas issuance and listing filing from the CSRC, its H-share listing in Hong Kong can expand overseas funding channels, improve governance and information disclosure transparency, and refresh investors’ perception of its growth trajectory through the Hong Kong stock valuation system—thus forming a positive cycle of simultaneous improvement in valuation re-evaluation and financing capacity. If it can continue to consolidate profitability and cash flow after listing, the valuation premium and financing leverage from the dual markets will be more effective.

[0] Jinling AI Securities Broker API Data