HKEX cleared a Huizhou A-share spin-off — at 20× P/E the subsidiary alone is worth more than the entire group today.

• The filing. The company filed the Practice Note 15 application with HKEX on 27 Apr 2026 and disclosed on 14 May 2026 that HKEX had confirmed it may proceed; the CSRC A-share application is the next gate, not yet filed. The stock ripped +21.0% on 25.3M shares — one of the two largest single-day moves since IPO (a similar +21.4% printed on 11 Dec 2020).
• The arithmetic. Huizhou Electronic carries roughly 58% of group segment gross profit. At 20× FY25 share earnings of HK$220M it values at HK$4.4B — already HK$1.4B above the entire group market cap of HK$3.0B. A-share charger peers trade 25–45× P/E.
• What's unsettled. The CSRC prospectus has not yet disclosed how much economic interest the listed parent retains, the sponsor's indicative pricing range, or whether related-party flows carve into SpinCo. Until those print, the +21% spike priced optionality, not the SOTP.

The same Dongguan factory earns 24¢ on a smart industrial charger and 13¢ on a router adapter — and the revenue mix is sliding the right way.

Smart chargers, lighting and media — 54.7% of FY25 revenue — print 19–25% segment gross margins and already throw off roughly 60% of group gross profit. The H2-2024 launch of 3,500–10,000W AI/HPC server PSUs aims the next leg into a wattage band Delta Electronics has not aggressively contested. The variable the next half-year decides: smart-charger segment GM gave back 260bps last year (26.7% → 24.1%) and an AI customer name still has not been disclosed 18 months after the product launch.

7.9× earnings on 17.5% ROE — the cheapest, third-most-profitable name in a peer set that trades 18× to 87×.

• Peer math. ROE 17.5% (#2 of 7 Asian PSU peers, narrowly ahead of Lite-On 17.3%), operating margin 7.6% (#3, behind Delta 17.8% and Lite-On 9.4%). Multiple is 7.9× trailing P/E and 1.4× book. The next-cheapest peer is Chicony Power at 18.9× — running 50% larger revenue at worse margins and lower ROE.
• Cycle-tested. Nine-year average ROE of 22.0%. The FY18 copper shock and FY22 smartphone cliff both compressed margins but never broke ROE for two consecutive years; revenue compounded ~11% per year across both troughs.
• Owner skin. Founder Hung owns 66.78% via a BVI company and a family trust and has not sold a share since the 2015 IPO. Public float just clears the 25% regulatory minimum (≈25.5% net of Fidelity's 7.76% block) — small enough to keep sell-side coverage at zero.

A founder who sits on his own pay committee, buys copper from his wife, and parked equity inside the subsidiary two years before the spin.

• Related-party copper. The chairman's spouse owns Golden Ocean Copper; in FY25 it supplied HK$94.8M of copper wire to the group. The annual cap was lifted from HK$50M to HK$140M in two years — 2.8× on a commodity input, with no observable competitive bid.
• Pre-spin equity scheme. A Ten Pao Electronic (Huizhou) Share Award Scheme adopted Feb 2024 already directed HK$25.4M of equity value to subsidiary employees — before the May 2026 spin filing. Outside parent shareholders do not participate in that pool.
• Broken cash conversion. FY25 free cash flow collapsed to HK$19M (5% of net income) against a HK$126M dividend funded out of the cash pile. 71% of headline cash (HK$702M of HK$985M) is restricted against bank acceptance bills.