HK Stock Connect Insight | IMPRO PRECISION (01286.HK) Falls About 28% Since Stock Connect Inclusion; Full-Year Sales Growth Guidance Raised to 20%-25% on August 11

On October 20, 2026, IMPRO PRECISION opened lower and stabilised in volatile trading, and was quoted at HKD 6.115 as of 13:53, up 0.16%, with a turnover of about HKD 12.45 million and a market capitalisation of about HKD 11.908 billion based on the latest price. The stock touched a low of HKD 5.930 and a high of HKD 6.210 during the day, with an amplitude of 4.59%.

In terms of recent movements, IMPRO PRECISION's share price over the past week (October 13 to October 20, including today's intraday price) showed a heavy-volume decline followed by stabilisation at a low level. On October 15 the stock fell 10.6% on heavy volume, with a turnover of about HKD 94.85 million, and has recovered somewhat over the following two trading days.

It is understood that on September 7, the new round of regular adjustments to Stock Connect officially took effect. The number of constituents of the Hang Seng Composite Index increased from 534 to 580, and IMPRO PRECISION (01286.HK) was included, and was thereby added to Stock Connect.

Public information shows that IMPRO PRECISION INDUSTRIES LIMITED listed on the Main Board of HKEX on June 28, 2018 at an offer price of HKD 3.000 (the top of the offer price range of HKD 2.80 to HKD 3.30), offering about 333 million shares globally, of which 90% was placed internationally and 10% was offered to the public in Hong Kong; the Hong Kong public offering was about 2.72 times subscribed, and the global offering raised net proceeds of about HKD 887.5 million. Cornerstone investor China Structural Adjustment Fund subscribed for HKD 220 million of shares, subject to a six-month lock-up.

At present, since its listing on June 28, 2018, the share price has risen from the offer price of HKD 3.000 to a peak of HKD 11.695 (May 2026, forward-adjusted), and is currently 47.8% below its post-listing high, while remaining 103.8% above the offer price cumulatively. After joining Stock Connect, the share price has fallen 27.9% cumulatively from its September 7 close of HKD 8.485 to date. In terms of market capitalisation, the total market capitalisation was about HKD 11.908 billion based on the intraday price on October 20.

It is understood that Hang Seng Indexes Company announced the results of its quarterly review as at June 30 on August 21, and IMPRO PRECISION was included in the Hang Seng Composite Index, with the constituent changes taking effect on September 7.

The basis for IMPRO PRECISION's inclusion lies, first, in its inclusion in the Hang Seng Composite Index, which gave it the "index identity" of a Stock Connect eligible security. Second, the company's market capitalisation remained at a high level around the review period: based on the closing price of HKD 7.959 on June 30, 2026, the total market capitalisation was about HKD 15.5 billion, well above the HKD 4 billion market capitalisation threshold for small-cap Stock Connect eligible securities. In addition, the securities added in this adjustment were concentrated in AI, robotics, innovative drugs and high-end manufacturing, and IMPRO PRECISION, as an "AI data centre supply chain precision manufacturing company", is consistent with this structural direction. (The above is an inference based on public rules and data, not an official determination by the exchange. The specific reason for inclusion is subject to the exchange's announcement.)

Although this Stock Connect inclusion provides IMPRO PRECISION with institutional conditions to broaden southbound capital participation and improve liquidity, the company's share price has fallen 27.9% since inclusion, including a heavy-volume plunge on October 15, occurring alongside fundamentals of accelerating earnings growth.

Public information shows that IMPRO PRECISION is one of the world's top ten manufacturers of high-precision, high-complexity and performance-critical castings and machined components, ranking as the world's seventh-largest independent investment casting manufacturer and the largest investment casting manufacturer in China by total revenue in 2018, and the world's fourth-largest precision machining company in the automotive, aerospace and hydraulics end markets. Its products cover end markets including passenger vehicles, commercial vehicles, high-horsepower engines, hydraulics, construction machinery, aerospace, medical, energy and diversified industrials, with customers including global industry leaders such as Bosch, Cummins, Caterpillar, Benteler and Honeywell, and the company operates plants in China, Germany, Turkey, the Czech Republic and Mexico.

On the financial side, the company's revenue has grown steadily: revenue for 2023 to 2025 was HKD 4.604 billion, HKD 4.687 billion and HKD 5.096 billion respectively, with 2025 revenue reaching a record high. Profit attributable to shareholders for the same years was HKD 585 million, HKD 644 million and HKD 726 million respectively, growing year by year; the gross margin was 27.5% in 2025, up 0.4 percentage points year on year. In the first half of 2026, revenue was HKD 3.018 billion, up 23.2% year on year; profit attributable to shareholders was HKD 421 million, up 21.6% year on year; the gross margin was 28.4%, up 0.6 percentage points year on year; the period recorded an exchange loss of HKD 67.70 million. Management has raised its full-year 2026 sales growth guidance to 20% to 25%.

In terms of products and business developments, IMPRO PRECISION released its interim results on August 11, raising its full-year sales growth guidance to 20% to 25% and setting a target of reaching HKD 10 billion in revenue by 2029 or 2030; on June 3 it completed a top-up placement of 60 million shares, raising net proceeds of HKD 539 million for capacity expansion at its Mexico and China plants; in January, the Mexico plant obtained the first-stage AS9100 quality system certification for aerospace.

EB SECURITIES noted in a research report that global AI infrastructure has moved from the early investment stage into large-scale expansion, driving continued growth in demand for data centre power management, cooling systems and backup power generation equipment; as the Mexico plant's certifications progress and mass production begins, high-horsepower engine components and liquid cooling system products are set to see higher growth; industrial gas turbine demand is expected to maintain substantial growth over the next three to five years, and, together with the capacity shortage in the aerospace supply chain, the company's aerospace, energy and medical segments will maintain double-digit growth over the medium to long term.