Since the emergence of generative AI in 2023, the AI computing hardware sector has experienced a structural bull market lasting three years in capital markets. Key segments such as optical modules, liquid cooling, and PCBs have seen leading companies achieve phenomenal stock price increases, with numerous benchmark stocks posting staggering gains. This industry trend remains robust, with market capital continuously exploring deeper into the supply chain to identify new hardware segments emerging from technological iterations, aiming to capture the next wave of potential alpha opportunities. Within this market environment, power inductors have gradually attracted investor attention. As core passive components ensuring stable power supply to chips, power inductors are positioned to become another high-growth segment under the industry logic of significantly increased value per AI server and synchronized demand from automotive-grade and high-end consumer electronics.
As a leading enterprise in China's advanced process chip power inductor field, Kunshan Maiji Electronics Co., Ltd. has drawn sustained market attention regarding its capitalization process. Maiji Electronics has officially commenced its new journey towards a Hong Kong listing, having submitted its application to the Main Board of the Hong Kong Stock Exchange on March 31, with Ping An Securities (Hong Kong) acting as the sole sponsor.
According to data from China Insights Consultancy, based on 2024 revenue from advanced process chip power inductor solutions, Maiji Electronics ranks first among suppliers headquartered in mainland China and sixth globally. Furthermore, the company's Deputy General Manager for Automotive Sales, Wang Bin, previously stated that Maiji Electronics is already the primary inductor supplier for NVIDIA, Qualcomm, and AMD.
However, Maiji Electronics continues to operate at a loss. Its prospectus shows that from 2023 to 2025, the company's revenue was approximately RMB 362 million, RMB 436 million, and RMB 471 million, respectively. Its adjusted net losses during these periods were approximately RMB -23.265 million, RMB -7.178 million, and RMB -2.585 million, respectively. A key question arises: how should investors rationally value a company that leads its niche market, supplies major players like NVIDIA, Qualcomm, and AMD, yet remains unprofitable? This warrants in-depth consideration.
While overall gross margin improves, average selling prices for core businesses decline.
Maiji Electronics' development history is one of focused growth closely tied to the evolution of high-end chips. Established in Kunshan in 2012, the company initially focused on the consumer electronics and IT equipment markets before anchoring its R&D and design efforts on high-end electronic components and magnetic materials, laying the foundation for its technological advancement. By 2016, Maiji successfully expanded into the automotive electronics sector. A pivotal strategic decision came in 2018 with the launch of high-performance power inductors for GPUs, enabling its entry into the high-growth computing track and paving the way for becoming a supplier to giants like NVIDIA and AMD.
Subsequently, the company continued evolving towards miniaturization and specialization, launching miniaturized inductors in 2020 and dedicated AI power inductors in 2024, consistently serving the most advanced chip process requirements. This solidified the three main application scenarios for Maiji's power inductors, marking a further expansion of its growth potential. In 2025, revenue contributions from consumer electronics, automotive electronics, and high-performance computing were 67.5%, 22.5%, and 9.8%, respectively. Clearly, consumer electronics remains the core segment, while revenue from high-performance computing is still relatively modest.
From a performance perspective, the steady revenue growth from 2023 to 2025 was driven by contributions from all three business segments, with revenue from each scenario showing consistent growth. Consumer electronics, acting as the company's "ballast," played a crucial role in providing stable support and driving growth. Notably, the revenue growth logic differs significantly across the three application scenarios. The consumer electronics and automotive electronics segments exhibit a pattern of "volume growth with price decline," where revenue growth is primarily driven by sales volume increases, while average selling prices have been falling amid intensifying market competition. In contrast, the high-performance computing scenario achieved "both volume and price increases," with its average selling price rising from RMB 0.76 in 2023 to RMB 0.88 in 2025, while sales volume grew from 35.4826 million units to 52.5942 million units over the same period.
However, the trend in gross margins for each business segment is more analytically valuable, presenting an interesting contrast to the revenue growth patterns. Despite facing "volume growth with price decline" pressures, the gross margins for both consumer electronics and automotive electronics have been rising continuously – consumer electronics gross margin increased from 16.1% in 2023 to 22.8% in 2025, while automotive electronics gross margin improved from 15.1% to 17%. This improvement is mainly attributed to the company outsourcing some standardized, labor-intensive processes, thereby enhancing cost efficiency. Conversely, the high-performance computing business, which enjoyed "both volume and price increases," saw its gross margin trend move in the opposite direction, declining significantly from 37.6% in 2023 to 21.7% in 2025. This indicates that the price increases in this segment were largely driven by rising costs, such as raw materials, and the company was unable to fully pass these cost pressures downstream, resulting in squeezed gross margin space and weakened profitability.
Through this structural adjustment in profitability across different businesses – with some margins rising and others falling – Maiji Electronics achieved a steady increase in its overall gross margin, which rose from 17.6% in 2023 to 21.5% in 2025. This has been a key factor in the continuous narrowing of its adjusted net loss.
Multiple potential risks indicate ongoing operational challenges.
The performance analysis of Maiji Electronics reveals that the company faces price pressures from intensifying competition in consumer and automotive electronics, alongside challenges in passing on costs within the high-performance computing segment. However, these are not the only tests on its growth path. Several other potential risks also warrant investor attention.
Firstly, significant price increases for memory have cast a shadow over the consumer electronics industry, with generally pessimistic market expectations for future shipment volumes. As consumer electronics is a major revenue source for Maiji, the company could be adversely affected. For instance, IDC forecasts global smartphone shipments in 2026 to be approximately 1.1 billion units, a year-on-year decline of 12.9%, which would be the lowest figure since 2013. While IDC expects the smartphone market to stabilize in 2027, it projects only a marginal 1.9% increase in shipments, with a significant recovery not anticipated until 2028. Similar shipment trends of weak growth or continued decline are observed in other segments like personal computers, tablets, and gaming consoles. Amid fierce competition and a clear contraction in demand, power inductor prices for consumer electronics applications could face significant downward pressure.
Secondly, Maiji Electronics has a relatively high customer concentration, which could lead to substantial fluctuations in its financial performance. According to the prospectus, from 2023 to 2025, revenue from the top five customers accounted for 78.7%, 78.4%, and 70.2% of total revenue, respectively. Revenue from the single largest customer accounted for 34.1%, 34.7%, and 32.5% in the same periods. In a competitive market, high customer concentration can weaken a company's bargaining power. More critically, a reduction in demand from major key customers would significantly impact Maiji's performance.
Simultaneously, the level of competition in the global power inductor market may exceed many investors' expectations. Although Maiji ranks first in mainland China and sixth globally by 2024 revenue for advanced process chip power inductor solutions, its specific global market share is relatively low. The prospectus indicates that the global market for power inductors used in advanced process chips is highly concentrated, with the top six companies holding a combined market share exceeding 80%. Maiji, in sixth place, holds only a 4.5% global market share and faces strong competition from leading players based in Japan and Taiwan.
Furthermore, relatively insufficient R&D investment could constrain the long-term development of the company's core competitiveness. Despite operating in the rapidly evolving and fiercely competitive power inductor industry, Maiji's R&D expenditure remains at a relatively low level. The prospectus shows that from 2023 to 2025, R&D spending was RMB 25.721 million, RMB 28.828 million, and RMB 28.337 million, accounting for only 7.1%, 6.6%, and 6.0% of revenue, respectively, showing a declining trend. In a technology-driven market, continuous R&D is crucial for maintaining product leadership and responding to rapid iterations. If the company falls behind competitors in technological reserves due to insufficient R&D investment, its long-term competitiveness and value growth potential could be significantly constrained.
In summary, Maiji Electronics exhibits both prominent strengths and weaknesses. As a leading domestic manufacturer, its continuous revenue growth and status as the primary inductor supplier for top chipmakers like NVIDIA, Qualcomm, and AMD are significant competitive highlights. However, expectations of weakening demand in the consumer electronics market, high customer concentration, intensifying industry competition, and relatively limited R&D investment all pose constraints on its valuation. Therefore, investors should maintain a rational perspective when evaluating Maiji Electronics and avoid undue optimism.
