AUX Electric Co., Ltd.

Listed in Hong Kong · Air conditioning

HKEX: 2580 · Information cut-off 28 August 2026

The financial record

Revenue rose from RMB19.5bn in FY2022 to RMB30.0bn in FY2025. Profit after tax rose from RMB1.44bn to RMB2.24bn, but peaked at RMB2.91bn in FY2024. Gross margin compressed from 21.3% in FY2022 to 18.8% in FY2025, so the latest year combined nearly flat revenue with a 23.2% decline in profit after tax. (R/D)

FY2025 operating cash flow was RMB2.89bn. Subtracting RMB1.82bn of gross capital expenditure leaves RMB1.07bn of simple free cash flow before financing. The RMB1.68bn final dividend was therefore covered by accounting earnings but not by that simple cash-flow measure. This is arithmetic, not a forecast of future dividends. (R/D)

The FY2025 earnings reset was not only a revenue problem. Gross profit fell RMB580.7m despite revenue increasing RMB289.3m. Selling and distribution expense then rose RMB326.1m as AUX established overseas sales companies and spent more on marketing; administrative expense increased RMB61.4m, partly on storage, logistics and depreciation at new bases. R&D expense fell RMB21.3m after a personnel-structure optimisation. (R/D)

The annual report attributes the 2.2-point margin fall to more intense competition, higher raw-material prices and elevated inventory in some regions. The expense lines show a second pressure: internationalisation required more channel and marketing spend before those investments produced group growth. The relevant test is therefore not simply whether overseas revenue rises, but whether its gross profit covers the incremental sales infrastructure and currency exposure. (R)

Product and geographic economics

Household air conditioners supplied RMB26.24bn, or 87.3%, of FY2025 revenue at a 16% gross margin. Central air conditioners supplied RMB3.29bn, or 10.9%, at a 31% gross margin. The difference makes central AC economically important despite its smaller scale. The residual category carries unusually high reported margin but is too small and heterogeneous to extrapolate. (R/D)

Mainland China supplied RMB15.31bn, or 50.9%, of FY2025 revenue. Asia excluding China supplied RMB8.21bn, Europe RMB2.84bn, North America RMB1.45bn and South America RMB1.51bn. The top five customers represented 18.9% of revenue, while the top five suppliers represented 33.3% of cost of sales. Raw materials and components were more than 83% of cost of sales. (R/D)

Household AC produced almost three quarters of group gross profit because of its scale, despite its lower margin. Central AC produced 18.0% of gross profit from 10.9% of revenue. The small “others” category explains another 7.7% of gross profit, but its contents and unusually high margin make it unsuitable as a recurring group-margin assumption. (R/D)

Asia outside mainland China added RMB868.4m and more than offset most of North America's RMB642.9m decline. That shift improved geographic diversity but increased exposure to currency translation, regional inventory and the Middle East. AUX says its products reach more than 160 countries and regions; the filed revenue table shows where customers are located, not the legal entity holding the cash or the final consumer's location. (R)

The brand table gives another view of channel economics. AUX-brand revenue rose 2.5% to RMB15.914bn; AUFIT generated RMB996.3m in its first disclosed year; Hutssom fell 39.0% to RMB829.3m; and ODM revenue declined 3.8% to RMB11.781bn. The self-owned and ODM mix matters because brand investment, pricing power, customer concentration and working-capital terms can differ even when the same factories supply the equipment. (R)

The 1H2026 result confirmed the warning

AUX reported 1H2026 revenue of RMB17.504bn, down 12.9%, and profit after tax of RMB1.108bn, down 40.8%. Gross profit fell 19.2% to RMB3.170bn and gross margin narrowed to 18.1% from 19.5%. Household-air-conditioner revenue fell 14.1%; central-air-conditioner revenue fell 9.0%; ODM revenue fell 24.7%. Foreign-exchange losses increased to RMB342.1m from RMB6.0m. The numbers were broadly consistent with the 30 July guidance. (R/D)

The interim announcement does not include a complete cash-flow statement, so the operating-cash bridge remains unresolved. Management attributed the increase in cash and cash equivalents to operating and financing activities, while the balance sheet shows receivables rising sharply and the current ratio falling. A complete interim report is required to separate collection timing, dividend payment, capex and financing. (R/O)

Both core product lines lost margin. Household AC's 2.5-point fall had the larger group effect because it was 87.9% of revenue; central AC remained higher-margin but fell 3.4 points. Management cited weaker export gross profit, persistently elevated raw-material costs and renminbi appreciation. The residual category again carried an exceptional margin and should not be used to infer the economics of the core cooling units. (R/D)

The regional decrease was broad rather than confined to one market. Asia outside mainland China accounted for RMB1.141bn of the RMB2.581bn group revenue decline, mainly in the Middle East; Europe fell RMB730.7m. AUFIT growth and the smaller decline in AUX-branded sales were not enough to offset the RMB2.186bn ODM contraction. (R/D)

Fixed-cost absorption remained visible: selling and administrative amounts fell, but both rose as a percentage of lower revenue. R&D moved the other way, increasing while revenue contracted. Foreign exchange was the largest discrete step-up in other expenses, from an approximately RMB6.0m loss to RMB342.1m. That identifies the location of the earnings shortfall more precisely than the profit-warning range alone. (R/D)

Working capital expanded even as inventory fell

The company explains the receivable rise as normal first-half seasonality in overseas revenue, and the payable rise as more material procurement alongside higher production. Those explanations are compatible with the balances but do not complete the cash bridge: contract liabilities also fell sharply and the published interim package omits a full cash-flow statement. The next complete statements need to show whether June receivables collected, whether supplier balances reversed, and how much of the higher cash came from operations rather than financing. (R/O)

Headline cash and accessible liquidity

At FY2025, the group reported RMB5.05bn of cash equivalents, RMB1.83bn of time deposits, RMB1.40bn of structured deposits and RMB2.63bn of pledged deposits, against RMB1.46bn of bank debt. These labels are not equally liquid or equally available to the listed parent. The chart applies an illustrative RMB1.50bn operating buffer and RMB1.07bn entity/currency haircut to the first three pools, then subtracts bank debt. The resulting RMB4.25bn is a derived accessibility case, not company guidance. (R/D)

Other claims on liquidity include RMB2.13bn of contracted capital commitments and RMB9.63bn of trade and bills payables. Inventory was RMB6.43bn. Trade and bills receivables were RMB3.00bn, with the six-to-twelve-month ageing bucket rising to RMB294.8m from RMB39.8m. The statements disclose no public bond, public covenant package or externally imposed capital requirement. Absence of disclosure is not evidence that every facility is covenant-free. (R)

June cash equivalents rose by RMB2.534bn, but total borrowings rose by about RMB1.071bn and pledged deposits by RMB770m. The RMB1.684bn FY2025 final dividend was paid in August, after the balance-sheet date. A June liquidity snapshot therefore precedes that cash outflow and should not be treated as a clean post-dividend starting point. (R/D)

Two capex definitions appear in the filings. The FY2025 management discussion reports RMB1.350bn for construction in progress, machinery, fixtures, buildings and vehicles. The cash-flow-derived gross measure on this page totals about RMB1.822bn after including cash purchases of property, plant and equipment, intangibles, investment property and leasehold land. Both are useful, but they answer different questions and should not be mixed without reconciliation. (R/D)

Research, manufacturing capacity and channel build-out

AUX reports three R&D centres in Ningbo, Zhuhai and Japan and a global R&D team of more than 1,600 people. It obtained 1,217 newly authorised patents in FY2025 and another 557 in 1H2026; by June, global applications exceeded 18,600 and maintained authorised invention patents exceeded 3,600. Patent counts demonstrate activity, not economic return, so they need to be read beside product mix, price, energy-efficiency claims and margin. (R)

The company is simultaneously funding self-owned brands, overseas sales operations, central AC, digital supply-chain systems and new manufacturing bases. Those initiatives can reinforce each other, but the public evidence does not yet isolate their returns. Useful disclosure would connect each major base or channel programme to commissioned capacity, utilisation, revenue, gross profit and cash payback rather than reporting patent, capex and geographic sales totals separately. (R/O)

Questions for management

What it does with the cash

Capital allocation, RMB billion. The two rows to read together are capital expenditure and the operating cash flow above it. Capex rose sevenfold between 2022 and 2025, from RMB0.26bn to RMB1.82bn, while operating cash flow fell from RMB4.00bn to RMB2.89bn. Capital spending absorbed 7% of operating cash flow in 2022 and 63% in 2025. The business is becoming materially more capital-intensive at the same time as it is generating less cash from trading.

The margin rows say why that matters. Revenue was flat in 2025, up about 1% to RMB30.05bn, but gross profit fell from RMB6.24bn to RMB5.66bn and gross margin went from 21.0% to 18.8%; net profit fell 23% to RMB2.23bn and net margin from 9.8% to 7.4%. So the step-up in capital spending is being made out of a shrinking profit stream, not a growing one. Provenance note: the refreshed research pack retains 41 unique HKEX filing PDFs and 72 canonical claims. FY2025 revenue, gross profit, net profit, cash flows and share capital are linked to the audited annual report; the 30 July profit warning and 18 August board notice are also deep-read critical evidence.

The FY2025 final dividend was RMB1.06 per share, RMB1.684bn in aggregate. The annual report also states an intention for annual dividends from 2025 through 2027 to be no less than 75% of profit attributable to owners, subject to the stated conditions and approvals. That policy competes with production-base commitments and working capital for the same operating liquidity; it is not a substitute for a cash-flow payout test. (R)

IPO proceeds are funding a four-year build-out

AUX listed on 2 September 2025, issuing 238.235m shares at HK$17.42 and receiving about HK$3.994bn of net proceeds. By 31 December 2025 it had used HK$1.381bn; by 30 June 2026 cumulative use reached HK$2.027bn, leaving HK$1.967bn. The plan remained unchanged, and the three investment buckets retain a stated four-year utilisation window. (R)

The working-capital allocation had already been fully used by year-end 2025, mainly for salaries, with smaller amounts for freight, utilities, repairs, advertising, inland haulage and promotion. At June 2026, more than half of the remaining proceeds sat in intelligent manufacturing and supply-chain projects. The decision-useful follow-up is not only spend against budget, but commissioned assets, utilisation and incremental cash contribution from each programme. (R)

Download

A print-ready PDF of this page, for reading away from the screen: AUX Electric evidence library (PDF). It carries the same content as this page — the financial record, product and geographic economics, the 1H2026 result, working capital, liquidity, research and capacity, the IPO proceeds and questions for management — and the same omissions: no rating, no fair value, no forecast.

Sources and method

Where the primary sources are filed. HKEX issuer page for 2580 · HKEXnews listed-company document search (stock code 2580). Exchange portals re-file and purge documents over time; the text above cites each document by name and date so it can be found again. Tables on this page as data: JSON · CSV — the page’s own as-filed and recomputed tables, cell for cell, with their section and caption.

This page uses the 2025 prospectus, FY2025 annual report, 1H2025 interim report, 30 July 2026 profit warning, 28 August 2026 interim result and the complete HKEX announcement tape through 28 August 2026. Reported values are retained as filed. The public page deliberately excludes forecasts, scenarios, recommendation, fair value and any conclusion about the share price or a credit letter grade.

Primary source: FY2025 annual report · Primary source: 1H2026 interim results · Primary source: profit warning · HKEX announcement archive