First money into Three-Circle's Hong Kong IPO is leaving with all of it

The cornerstone sells the whole position

On the evening of 24 September, Power HF disclosed that its subsidiary Huafeng International, a cornerstone investor allotted 781,300 H-shares in Chaozhou Three-Circle's 7 July Hong Kong listing, had sold 420,900 into the market and would dispose of up to 360,400 more↗ "at an opportune time", citing asset-structure optimisation ¹. That is the entire stake, inside three months of listing. The stock fell 4.85% to HK$123.6 on 28 September: 23% above the HK$100.3 issue price, 19% below the HK$152.7 high it touched on 21 September ¹.

The 10x lives in the channel, not the price list

What bid the stock up was the distributor market. Spot prices for MLCCs, the ceramic capacitors stacked inside AI servers, hit up to 10 times original levels↗ ². Merchants at Shenzhen's Huaqiang Electronics World reported being flooded with orders ³. Shipments by Murata, Samsung Electro-Mechanics and Taiyo Yuden reached a near-five-year monthly high in June, and TrendForce expects the supply-demand gap to keep widening into the fourth quarter ³.

Three-Circle's own words cut the other way. Factory-gate prices will not change as rapidly as those in distributor channels↗, the company said ⁴. Its interim report is quieter still: prices for some specifications recovered to their "original reasonable value" ³. The 10x is in the distributor's window, not in the factory's ledger.

The squeeze is real, and so is the exit

The bull case has substance. On 24 September TrendForce reported Japanese and Korean makers cutting consumer MLCC supply to chase AI orders, opening qualification at Dell, HP, ASUS and Acer to Chinese suppliers ⁵. Bloomberg counts Three-Circle among seven niche suppliers that minted more than $62 billion for their majority holders↗ ⁶: paper wealth for the founders, while the listing's first outside money turns itself into cash ¹. Power HF stated no view on capacitors; its stated reason was asset structure ¹.

The fourth quarter prices the argument

The trade splits on one number: whether fourth-quarter contract quotes follow the channel. If they do, the squeeze is booked revenue and the buyers at the high range are right. If they lag, the rally runs on borrowed fuel, and those buyers are left holding a stock priced at 68 times normalized earnings↗ ⁷, made by a company that says the 10x is not in its ledger, with a disclosed seller still working through 360,400 shares ¹.

Huafeng is on the other side of every one of those trades: first money in at the HK$100.3 issue price, first money out, the whole position going ¹. Watch two numbers into the fourth quarter: the contract quotes Three-Circle actually signs, and the price at which the last 360,400 cornerstone shares clear.