Hengwei Technology's acquisition "turnaround": cash + capital increase, equity reduced to 51%

(Source: V Financial Report)

From planning to acquire 75% of the shares to no less than 51% equity, from “issuing shares + cash + fundraising” to “cash + capital increase,” Hengwei Technology has made a significant turn in its acquisition over nearly half a year.

Cash + Capital Increase

Back to September 29, 2025, Hengwei Technology planned to purchase 75% of Shuhang Technology’s shares through “issuing shares + cash payment,” simultaneously raising matching funds. After the transaction is completed, Hengwei Technology’s products and business layout will extend into downstream AI application fields.

Half a year later, on March 26, 2026, Hengwei Technology announced the termination of the aforementioned issuance of shares and cash payment to purchase Shuhang Technology and the matching fundraising, opting to negotiate separately to acquire controlling shares in the target company through cash payments and capital increases.

This cash acquisition is still in the negotiation phase. According to requirements, the matter can only be implemented after all parties to the transaction further negotiate and perform necessary internal decision-making procedures (including but not limited to board of directors and shareholders’ meeting review).

Regarding the reason for the change in the transaction plan, Hengwei Technology explained, “To improve transaction efficiency, reduce transaction costs, and better promote the completion of the acquisition, based on the purpose of safeguarding the interests of all shareholders, the company decided to make changes after careful consideration and sufficient discussion and communication with relevant parties to the transaction.”

It is worth mentioning that on February 27, Hengwei Technology previously announced that the audit and assessment work involved in this transaction had not yet been completed. The company does not rule out the possibility of adjusting the specific acquisition plan based on changes in market conditions and the progress of negotiations with the counterparty.

Comparing the old and new plans, in addition to the transaction method, the equity ratio, funding logic, and other aspects are also expected to change.

In terms of the acquisition equity ratio, Hengwei Technology’s new plan is to purchase no less than 48% of the shares of the target company held by Zhang Jisheng, Xie Xinyu, Zhu Linyun, Lu Yuan (collectively referred to as the “founders of Shuhang Technology”), Shanghai Huihang Enterprise Management Partnership (Limited Partnership), and Hangzhou Rongteng No. 2 Venture Capital Partnership (Limited Partnership); at the same time, the company agrees to subscribe for no more than 5% of the newly issued shares of Shuhang Technology.

After the completion of this cash acquisition, the company will hold no less than 51% of Shuhang Technology’s shares in total.

The old plan was to acquire 30.3919%, 8.0489%, 5.5256%, 1.7313%, 10.2326%, 12.0930%, and 6.9767% of Shuhang Technology’s shares held by the seven counterparties Zhang Jisheng, Xie Xinyu, Zhu Linyun, Lu Yuan, Shanghai Hangzhong, Shanghai Huihang, and Hangzhou Rongteng, respectively. After preliminary negotiations among the transaction parties, the compensation form for Zhang Jisheng, Xie Xinyu, Zhu Linyun, and Lu Yuan was shares and cash, while Shanghai Huihang, Shanghai Hangzhong, and Hangzhou Rongteng received compensation in the form of shares.

In addition, the new plan mentions that this cash acquisition will be paid in cash, with funding sourced from self-owned and self-raised funds, where the self-raised funds are expected to come from bank loans, which will temporarily increase Hengwei Technology’s debt scale, raise the asset-liability ratio, increase financial costs, and thus lead to an increase in debt repayment risk. The preliminary valuation of the target company is set at no more than 1 billion yuan.

In the first three quarters of 2025, Hengwei Technology generated a net cash flow of 125 million yuan from operating activities, and a net cash flow of -46.477 million yuan from investing activities.

The preliminary performance report for 2025 indicates that Hengwei Technology achieved operating revenue of 1,046.6874 million yuan, a year-on-year decrease of 6.31%; achieved a net profit attributable to shareholders of the listed company of 34.938 million yuan, a year-on-year increase of 30.13%; and achieved a net profit attributable to shareholders of the listed company after deducting non-recurring gains and losses of 29.693 million yuan, a year-on-year increase of 33.37%.

At the end of the reporting period, the company’s total assets amounted to 1,803.3069 million yuan, a year-on-year decrease of 10.12%; and the equity attributable to shareholders of the listed company was 1,388.8712 million yuan, a year-on-year increase of 2.07%.

Performance Commitment

Shuhang Technology is a provider of enterprise-level scenario-based AI solutions in the AI RaaS (Result as a Service) model, with its core business being to provide end-to-end intelligent services from strategy formulation and solution design to result delivery to enterprise customers, with a registered capital of 32.25 million yuan.

As of the signing date of the proposal, Shuhang Technology has one wholly-owned subsidiary—Shanghai Huanzhe Information Technology Co., Ltd., with a registered capital of 10 million yuan.

The founders of Shuhang Technology, as the performance commitment party for the cash acquisition, promised that the net profit (the “Net Profit”) actually realized by the target company during the fiscal years 2026, 2027, and 2028 (the “Performance Commitment Period”) should accumulate to no less than 282 million yuan, and performance assessment will be based on the cumulative net profit realized in each fiscal year of the performance commitment period.

The aforementioned “net profit” refers to the net profit attributable to Shuhang Technology’s shareholders in the audited consolidated financial statements of Shuhang Technology and its controlled companies, and the net profit amount will be calculated based on the lower amount before and after deducting non-recurring gains and losses.

If Shuhang Technology fails to meet the performance commitment, the performance commitment party shall first compensate the company in cash, and any shortfall in cash compensation shall be compensated by the performance commitment party in the form of equity.

Announcement Screenshot

From historical performance, Shuhang Technology’s net profits attributable to the parent company in 2023 and 2024 were 17.2044 million yuan and 22.5322 million yuan, respectively, while from January to August 2025, it was 17.8655 million yuan.

Hengwei Technology plans to hold an investor briefing on March 31 from 16:00 to 17:00 regarding the termination of the issuance of shares, cash payment for asset purchases, and the fundraising matter, as well as continuing negotiations for cash asset purchases. Participants will include Chairman/General Manager Shen Zhenyu, Secretary of the Board Wang Xiang, Financial Director Qin Fang, and representatives of the target company (participants may be adjusted in special circumstances).

According to Wind, as of February 27, Hengwei Technology had 71,880 shareholders, representing a change rate of 54.63% since January 30.

(The opinions in this article are for reference only and do not constitute investment advice. Investment carries risks; enter the market with caution.)

Cover and introductory images sourced from AI-generated graphics.