Luxshare's data-center unit is still under a tenth of revenue, so optical-line rollouts and North American liquid-cooling qualification will decide whether AI spending lifts its thin 11.78% gross margin.
Luxshare Precision, the Apple supplier listed in Shenzhen and Hong Kong, is putting more weight on the hardware that ties AI data centers together. Luxshare’s communications and data center segment, which sells copper and optical connections, cooling and power products, earned RMB16.609 billion in the first half, up 49.66%. That is still small next to RMB122.476 billion from consumer electronics, according to the half-year figures reported by 10jqka, which republished a Shanghai Securities News account of the results.
The shift comes as investors cool on the stock. In a filing dated October 8, Luxshare said it had spent RMB999.9 million buying back 17,665,380 A shares by September 30, at prices between RMB50.14 and RMB65.00, Jiemian reported. National Business Daily put the company’s market value at RMB345.7 billion at the October 15 close, with the A shares down about 45% from their 2026 high of RMB81.64 on May 13. The 21st Century Business Review, in a profile published October 18, gave a figure of about RMB368 billion.
The question for shareholders is whether the newer business can grow fast enough to change the company’s profit profile. Revenue rose 40.16% to RMB174.504 billion in the first half, but net profit attributable to shareholders grew 18.04% to RMB7.843 billion, and profit excluding one-off items rose only 6.47%, National Business Daily reported.
Sales growth is outrunning profit at Luxshare
Several forces sit behind the gap. National Business Daily said foreign exchange losses reached about RMB1.986 billion in the half. Gross margin was 11.78%, up 0.17 percentage points, which the Shanghai Securities News account attributed mainly to faster growth in the data center and automotive units, both of which carry higher margins than the company average.
Automotive electronics revenue nearly quadrupled, up 274.10% to RMB32.391 billion, and the company plans to pair its own manufacturing with the global resources of Leoni in that unit. The buyback program behind the October filing was approved on December 31, 2025, with a budget of RMB1 billion to RMB2 billion over 12 months, and the shares are earmarked for staff incentive or ownership plans.
The company has also raised fresh capital. Its Hong Kong shares began trading on July 9 after an offering of about US$3.1 billion, the largest Hong Kong listing of 2026 at that point, priced at HK$63.3 per share, according to an AFP report carried by Kuwait Times. The stock fell 1.6% on its first day. The 21st Century Business Review said Luxshare held about RMB71 billion in cash at the end of June.
Copper links lead, optical modules are still at an early stage
Luxshare’s data center offer is a bundle of four product lines, and they are at very different stages. Copper is the most developed. Xiong Tengfang, head of the data center business, told the 21st Century Business Review that its 224G copper products outperform rivals in some respects, and that several customers are interested in 448G products still in development. According to 21st Century Business Review, Luxshare holds more than half of China’s market for electrical connections inside supernodes, the large server systems that link many AI chips to work as one machine.
Optical connections are much smaller. The magazine said they made up about 0.1% of revenue in 2025, even though the product range runs from 800G to 3.2T modules. The results account said 800G products entered mass shipment in the first half, and that automated, high-volume production of newer designs could follow from the second half of 2026. By June 2027, Luxshare plans about 10 optical module lines with capacity for roughly 12 million PIC units, the optical chips inside each module, and could add lines three months early if demand firms, the magazine said.
Liquid cooling is already in mass production, and Luxshare is seeking supplier qualification with North American customers in the second half of 2026, with small-batch delivery to follow. Its DC-DC power converters have won designs at several customers and are expected to grow two to five times a year for three years, the 21st Century Business Review reported.
Spending and a possible spin-off are the next markers
Luxshare spent RMB11.4 billion on research and development in 2025, its first year above RMB10 billion, and RMB6.57 billion more in the first six months of 2026, according to the magazine. Wang Laichun, who runs the company, said AI investment had turned out larger and faster than expected, the magazine reported, and her team compared the opportunity to consumer electronics in 2017.
The company guided net profit for the first nine months to RMB13.246 billion to RMB14.398 billion, up 15% to 25%, and said its earlier investments should start adding to growth in the second half. Its copper roadmap includes a product line it calls CPC, aimed at a commercial launch in the second half of 2027.
According to 21st Century Business Review, management is weighing whether to keep open the option of spinning off the communications and data center business within three years of the Hong Kong listing. Luxshare has made no formal announcement. Luxshare’s third-quarter report will show whether data center sales are keeping their near-50% pace and whether the margin is moving.