Dongshan Precision reported a net profit of RMB 2.96 billion for the first half of 2026, marking a 290% year-on-year increase on revenue of RMB 27.8 billion. The company priced its Hong Kong shares at HKD 86.80, representing a 35% discount compared to its October 23 A-share closing price.
The offering of 113.8 million shares is expected to raise HKD 9.88 billion. While retail interest remained low with margin-financed subscriptions at 0.39 times the public tranche, the company secured $680 million in commitments from 20 cornerstone investors.
The company plans to allocate 64.5% of the proceeds to production upgrades and facilities, 20% to future investments or acquisitions, 10% to working capital, and 5.5% to debt repayment. These funds will support its expansion into optical chips, modules, and high-end PCBs.
Dongshan’s growth strategy relies on acquisitions to enter new markets. Key past deals include MFLEX in 2016, Multek in 2018, and Source Photonics in 2025. Optical transceivers from the Source Photonics acquisition accounted for 19.2% of revenue in the first half of 2026.
Despite rising profits, the company faces financial pressure from expansion costs. Operating cash flow for the first half of 2026 fell 4.65% to RMB 2.38 billion, while finance costs surged to RMB 546 million, up from RMB 29.5 million a year earlier due to acquisition-related debt and foreign-exchange losses.
