Luxshare Precision Faces Improved Auto and Communication Prospects, Dampened by Consumer Weakness

Since its public listing in 2010, Luxshare Precision has successfully penetrated into the supply chain of Apple, whose share of Luxshare’s overall sales has increased to more than 70% in 2022 from less than 10% in 2011. Over the past decade, the company has built up a solid track record at Apple, which has enabled Luxshare to expand its footprint beyond cables and connectors for iPhones and Macbooks to acoustic, haptic, and assembly services for AirPods and Watch. Despite often entering into Apple’s competitive supply chain as a second- or third-sourced player, Luxshare has managed to maintain an average gross margin of 17% between 2018 and 2022. This has contributed to the firm’s average return on invested capital of 20% over the same period.