New Stock News | Honghe Electronics submitted to Hong Kong Stock Exchange with integrated production capacity of electronic yarn and electronic fabric

According to the disclosure by the Hong Kong Stock Exchange on May 15, Honghe Electronic Material Technology Co., Ltd. (referred to as Honghe Electronic) has submitted its listing application to the main board of the Hong Kong Stock Exchange, with CITIC SEC as its exclusive sponsor. Company Introduction Honghe Electronic is a global leading supplier of high-end electronic grade glass fiber cloth (referred to as "electronic cloth"). The company focuses on the research, development, production, and sales of high-end general electronic cloth such as ultra-thin cloth, super thin cloth, as well as special electronic cloth with low dielectric constant/low dielectric loss ("low Dk/Df") and low coefficient of thermal expansion ("low CTE"). The company has the integrated production capacity of electronic yarn and electronic cloth, with production lines for low, medium, and high-end products, making it one of the few companies globally with a complete product line. With leading technology, high-quality products, and strong production capacity, the company has established long-term stable cooperation relationships with leading global copper-clad laminate (CCL) manufacturers and IC packaging substrate manufacturers. The company's products have entered the core supply chain of top graphic processing units (GPU), central processing units (CPU), high-end smartphones, among others. The company has become an important partner for many top global technology companies, establishing deep cooperation relationships in technology and business. According to data from Frost & Sullivan: In the field of high-end general electronic cloth, based on the revenue scale of ultra-thin cloth and super thin cloth in 2025, the company ranks first globally with a market share of 20.5%. In the field of special electronic cloth, based on the revenue scale of low Dk/Df cloth in 2025, the company ranks seventh globally and third in China with a market share of 4.0%, being one of the two domestic manufacturers that have achieved stable supply of the second-generation low Dk/Df cloth in volume. Based on the revenue scale of low CTE cloth in 2025, the company ranks third globally and first in China with a market share of 5.0%, being the only manufacturer in China with the capability of mass production of a full range of low CTE cloth. In the field of quartz cloth, the company's products are among the first globally to be certified by downstream customers, demonstrating the capability of mass production of quartz cloth. Since its establishment, the company has always adhered to a core of technological innovation, implementing a differentiation product competition strategy with high-tech content, high profit margin high-end electronic cloth as positioning. The company's technological strength is globally leading, with the thinnest thickness of electronic cloth reaching eight microns, and a weight of only seven grams per square meter; electronic glass fiber yarn (referred to as "electronic yarn") can reach a fineness of three microns, with a weight of only 0.77 grams per kilometer, making it the thinnest electronic cloth and the finest electronic yarn globally. The company is one of the only two manufacturers globally with production capacity. In the field of special electronic cloth, the company has the integrated production capacity of ultra-thin low Dk/Df, low CTE electronic yarn, and electronic cloth. The company is one of the only two manufacturers in China that can achieve stable supply of special electronic cloth like low Dk/Df, low CTE, etc. Financial Information Revenue In the fiscal years 2023, 2024, and 2025, the company recorded revenues of approximately RMB 661 million, RMB 835 million, and RMB 1.171 billion, respectively. Gross Profit In the fiscal years 2023, 2024, and 2025, the company reported gross profits of approximately RMB 48.284 million, RMB 147 million, and RMB 411 million, respectively. Gross Profit Margin In the fiscal years 2023, 2024, and 2025, the company's gross profit margins were 7.3%, 17.6%, and 35.1%, respectively. Industry Overview Based on revenue, the global PCB market size increased from USD 769 billion in 2021 to USD 867 billion in 2025, with a compound annual growth rate of 3.0% from 2021 to 2025. Specifically, the market size of high-layered PCBs, high-end HDI, and advanced IC packaging substrates increased from USD 118 billion, USD 51 billion, and USD 136 billion in 2021 to USD 148 billion, USD 75 billion, and USD 150 billion in 2025, with compound annual growth rates of 5.8%, 10.0%, and 2.5% from 2021 to 2025. It is expected that the global PCB market size will reach USD 118.5 billion by 2030, with a compound annual growth rate of 6.4% from 2025 to 2030. Specifically, the market size of high-layered PCBs, high-end HDI, and IC packaging substrates are expected to grow to USD 22.1 billion, USD 12.2 billion, and USD 21.7 billion by 2030, with compound annual growth rates of 8.4%, 10.3%, and 7.7% from 2025 to 2030. As PCBs evolve towards high-frequency, high-speed, high-layered, and high-reliability directions, the requirements for key raw material performance have significantly increased, and special electronic cloth, with its characteristics of low dielectric constant and loss, excellent dimensional stability and consistency, is able to meet the demands for high-speed signal transmission and precise manufacturing. Based on different downstream application fields, based on revenue, the global PCB market in 2025 reached USD 9.5 billion in the fields of AI and high-performance computing, USD 10.9 billion in network communication, USD 40.5 billion in consumer electronics, and USD 10.7 billion in automotive electronics and smart driving applications. Particularly, with the rapid development of global cloud computing, AI technology, and related applications in recent years, the demand for cloud infrastructure such as servers, data centers, among others continues to expand, driving the increase in PCB product usage in the AI field. The market size of the global PCB market in the field of AI and high-performance computing further increased to USD 24.9 billion by 2030, with a compound annual growth rate of 21.1% from 2025 to 2030. Based on revenue, the global electronic cloth market increased from USD 21.4 billion in 2021 to USD 29.43 billion in 2025, with a compound annual growth rate of 8.3% from 2021 to 2025. The global electronic cloth market size is expected to grow to USD 60.12 billion by 2030, with a compound annual growth rate of 15.4% from 2025 to 2030. Based on revenue, the global general electronic cloth market increased from USD 19.11 billion in 2021 to USD 23.2 billion in 2025, with a compound annual growth rate of 5.0% from 2021 to 2025. Based on the thickness of electronic cloth, the market size of super-thin, ultra-thin, super-thin, and extremely thin electronic cloth in 2025 reached USD 12.06 billion, USD 8.19 billion, USD 2.04 billion, and USD 0.91 billion, respectively, with the market size of super-thin and extremely thin electronic cloth accounting for 8.8% and 3.9% of the total market size. The global general electronic cloth is expected to expand to USD 36.608 billion by 2030, with a compound annual growth rate of 9.6% from 2025 to 2030. By 2030, the market size of super-thin and ultra-thin electronic cloth will be USD 4.03 billion and USD 2.808 billion, accounting for 11.0% and 7.7% of the total market size, with compound annual growth rates of 14.6% and 25.3% from 2025 to 2030. Based on revenue, the global special electronic cloth market increased from USD 2.29 billion in 2021 to USD 6.23 billion in 2025, with a compound annual growth rate of 28.4% from 2021 to 2025. From 2021 to 2025, the market size of low Dk/Df cloth increased from USD 1.88 billion to USD 4.8 billion at a compound annual growth rate of 26.4%; during the same period, the market size of low CTE cloth increased from USD 0.41 billion to USD 1.28 billion with a compound annual growth rate of 32.9%. By 2025, the market size of second-generation low Dk/Df cloth reached USD 0.7 billion, accounting for 14.6% of the total market size of low Dk/Df cloth, with a compound annual growth rate of 36.8% from 2021 to 2025. The global special electronic cloth market size is expected to increase to USD 23.512 billion by 2030, with a compound annual growth rate of 30.4% from 2025 to 2030. Specifically, the compound annual growth rates of the global market size of low Dk/Df cloth and CTE cloth from 2025 to 2030 are expected to reach 19.4% and 49.0%, respectively. As a key material to meet performance requirements, the market size of the second-generation low Dk/Df cloth is expected to reach USD 3.5 billion by 2030, accounting for 30.0% of the total market size of low Dk/Df cloth, with a compound annual growth rate of 37.9% from 2025 to 2030. Board of Directors Information The company's board of directors will consist of nine directors, including four executive directors, two non-executive directors, and three independent non-executive directors. Directors' terms are three years and will be subject to re-election after the end of their respective terms. Equity Structure As of May 8, 2026, Yuanyi International is the direct beneficial owner of 658,405,037 shares of the company. Yuanyi International is fully owned by BVI Honghe, and BVI Honghe is fully owned by Hongren Enterprise Group. Nextfocus holds 67.17% of the shares of Hongren Enterprise Group. Mr. Wang holds 0.68% of the shares of Hongren Enterprise Group. Ms. Wang holds 100% of the shares of NextFocus. Ms. Wang is Mr. Wang's daughter. Both Mr. Wang and Ms. Wang are senior investors and entrepreneurs, controlling multiple companies, including Epoxy Base Electronic Material Corporation Limited (603002.SH), which is mainly engaged in the production and sales of electronic glass epoxy resin and copper-clad laminate. Other members of the controlling shareholders group are investment holding companies. As of May 8, 2026, Unicorn Ace holds 28,805,220 shares, representing 3.18%, Sharp Tone holds 26,005,404 shares, representing 2.87%, Integrity Link holds 24,690,190 shares, representing 2.73%, and Fusecrest holds 1,121,312 shares, representing 0.12%. Yuanyi International, BVI Honghe, Hongren Enterprise Group, NextFocus, Unicorn Ace, Sharp Tone, Integrity Link, and Fusecrest are all controlled by Ms. Wang. According to the "Joint Action Agreement", Mr. Wang and Ms. Wang have agreed to take joint action on company-related matters. Therefore, as of May 8, 2026, Yuanyi International, Mr. Wang, BVI Honghe, Hongren Enterprise Group, NextFocus, Ms. Wang, Unicorn Ace, Sharp Tone, Integrity Link, and Fusecrest collectively hold the right to exercise the voting rights attached to 739,027,163 shares, representing approximately 81.70% of the company's issued shares, collectively forming the controlling shareholder group of the company. Intermediary Team Sole Sponsor: CITIC SEC (Hong Kong) Limited Company Legal Advisor: Regarding Hong Kong and U.S. law: Slaughter and May; Regarding Chinese law: Zhong Lun Law Firm Sole Sponsor Legal Advisor: Regarding Hong Kong and U.S. law: Norton Rose Fulbright Hong Kong; Regarding Chinese law: Jingtian & Gongcheng Auditor and Reporting Accountant: KPMG Industry Consultant: Frost & Sullivan Consulting (Beijing) Co., Ltd. Shanghai Branch