20 million leverages 1 billion in assets, why did Hongban Technology choose a bankruptcy reorganization target for its first acquisition after going public?

Ask AI · What risks are there in leveraging 20 million to drive a 400 million acquisition?

Ji Mian News reporter Zhao Yangge

It rang the bell for listing on the main board of the Shanghai Stock Exchange on April 8, and by April 27 it had already announced it would participate in an auction with a starting price of over 400 million yuan—while the target is still a bankrupt company. Under the capital market spotlight, Hongban Technology (603459.SH) moves so fast it’s dizzying. The company, touted as a “leader in mobile HDI (high-density interconnect boards) and mobile battery boards,” has already fired the “first shot” in post-listing asset integration.

According to an progress announcement issued by Hongban Technology on May 6, it confirmed that it successfully won a 100% stake in Jiangxi Zhihao Electronic Technology Co., Ltd. (hereinafter “Jiangxi Zhihao”) for about 419 million yuan through a newly established wholly-owned subsidiary, Ji’an Huiyang Electronics Co., Ltd. (hereinafter “Ji’an Huiyang”). Triggered by the news, Hongban Technology surged by 8.5% on May 6 and by 10% on May 7.

Bankrupt liquidation assets have become “hot commodities”

According to available information, Jiangxi Zhihao—the target company—was established on November 30, 2016, located in the Longnan Economic Development Zone in Ganzhou, Jiangxi. It used to be a large manufacturing base in the PCB industry, but due to debt issues it ultimately ended up in bankruptcy reorganization.

This was the target’s third auction.

Ji Mian News learned from the JD Asset Trading Platform that the first auction was held on March 2 with a starting price of 748 million yuan, drawing 3,534 viewers; the second auction was held on March 23 with a starting price of 523 million yuan, watched by 3,643 people.

After two auctions failed to attract bids, the third auction was launched on April 30, with the starting price lowered to 419 million yuan. At that time, only Ji’an Huiyang registered, and it ultimately won the asset at the starting bid price.

Source: JD Asset Trading Platform

Next, after Hongban Technology fully pays all auction proceeds in full and the auction deal takes effect, it can proceed in an orderly manner according to law with removing all rights restrictions such as releasing mortgages and financing lease guarantees, carry out the reorganization plan approved by the Longnan City People’s Court, and become the reorganization investor for Jiangxi Zhihao.

As of February 28, 2026, the book value of Jiangxi Zhihao’s total assets is 1.045 billion yuan, while the liquidation value assessed by the appraisal agency is 582 million yuan, representing a valuation appreciation rate of -44.29%. The auction winning price in this case is 419 million yuan, which is 28% below the assessed value—equivalent to just 40% of the book value. Hongban Technology’s precise move clearly carries the flavor of “smart accounting” from the very beginning.

According to disclosure in the announcement, Hongban Technology previously used 20 million yuan to establish the wholly-owned subsidiary Ji’an Huiyang, and this 20 million yuan is its own funds. The portion of “self-raised funds” mentioned in the acquisition refers to merger and acquisition (M&A) loans of no more than 400 million yuan that Ji’an Huiyang applies for from financial institutions. The company provides guarantee and collateral, with equity in Jiangxi Zhihao used for pledge-guarantee. Using Jiangxi Zhihao’s equity as collateral to obtain loan funds to buy Jiangxi Zhihao’s equity—Hongban Technology’s approach can hardly be called anything other than “astute.”

Why did this newly listed company, for its first asset integration, set its sights on a bankruptcy reorganization enterprise?

Hongban Technology’s “urgency” roots in the industry’s “heat.”

Public information shows that Hongban Co., Ltd. has been deeply involved in the PCB industry for 20 years. Its products cover mid-to-high-end offerings such as HDI boards, rigid boards, flexible boards, rigid-flex combined boards, class-like substrate boards, IC substrates, and others. Downstream applications include consumer electronics, automotive electronics, high-end displays, communication electronics, computers and peripheral equipment, and communication electronics. Benefiting from the new round of AI innovation cycles for smartphones and PCs, as well as the rise in quantity and pricing driven by the rollout of electrification and intelligentization in automobiles, demand for high-end products such as HDI boards has been growing rapidly.

Ji Mian News noted that in 2023, 2024, and 2025, Hongban Technology’s PCB product output was 1.5293 million square meters, 1.7976 million square meters, and 2.071 million square meters respectively, with capacity utilization rates of 85.01%, 88.51%, and 88.57%, already nearing the ceiling.

According to the prospectus, the company’s fund-raising project “Annual Production of 1.2 million square meters of high-precision circuit boards” can expand capacity by 51% in the future, but the project’s “construction period is 2 years, and it reaches full capacity in the third year,” even if it adopts a “build and begin production while constructing” approach.

In the announcement, Hongban Technology said, “This acquisition can quickly fill short-term capacity shortages and complement the fund-raising investment projects with a layout of ‘short-term rapid expansion + long-term capacity upgrading.’”

Public information shows that the target assets include the entire PCB production plant buildings, industrial land, production equipment, construction in progress, patents, and other full-chain production factors. They possess large-scale, mature PCB manufacturing capabilities and are highly synergistic with Hongban Technology’s main business. Hongban Technology stated, “With this acquisition, we can obtain mature capacity and industry qualifications with zero lead time, greatly saving capital expenditure, time costs, and management costs.”

Uncertainty behind the acquisition

For Hongban Technology, acquiring Jiangxi Zhihao is not only buying assets, but also buying time. However, Ji Mian News also noticed that Hongban Technology’s “move-in with a suitcase” plan may still contain some uncertainties.

First, the 419 million yuan may not be the entirety of the consideration.

Ji Mian News found on the JD Asset Trading Platform that, in this auction, there is also an accompanying purchase of assets worth 74 million yuan.

According to a ruling issued by the Yanting County People’s Court on March 23, 2025, it was confirmed that the ownership of 312 machine devices and equipment under construction registered under Jiangxi Zhihao belongs to Yanting Wuzhu Integrated Circuit Co., Ltd. (hereinafter “Yanting Wuzhu”). However, due to reasons such as they have not yet been dismantled, the aforementioned equipment-type assets are currently still kept at Jiangxi Zhihao’s factory site.

Because the ownership does not belong to Jiangxi Zhihao, the aforementioned equipment-type assets are not included in the scope of assets under reorganization investment rights. Yanting Wuzhu currently claims a purchase price of 74 million yuan. If the bidder decides to purchase, the final price will be determined by the agreement reached between the bidder and Yanting Wuzhu.

Second, integration capabilities will face challenges.

As a company in bankruptcy reorganization, Jiangxi Zhihao’s assets involve complex mortgage situations. The announcement shows that its land use rights, buildings, and machinery and equipment are all subject to mortgages and property preservation measures, involving multiple creditors such as Ganzhou Bank and financial leasing companies. If Hongban Technology wants to sort out the legal and debt relationships of these assets, it will require substantial effort.

In addition, Jiangxi Zhihao itself is listed as a dishonesty subject to enforcement, and it is also a restricted high-consumption enterprise. Jiangxi Zhihao has 34 lawsuit filing and case information records, and it is also included in the list of tax-owing announcements. What Hongban Technology is buying is not only a pile of cold factory plants and equipment, but also the company’s “old accounts.” Hongban Technology’s integration capability will face its first major test since going public.

Furthermore, Jiangxi Zhihao is currently shut down; when production will resume, and how much of its capacity can be restored, remains unknown.

According to the Ganzhou Human Resources and Talent website, recruitment information published by Jiangxi Zhihao in 2024 shows that Jiangxi Zhihao could “produce 5 million square meters of high-end printed circuit boards annually,” a scale even larger than Hongban Technology’s current scale. Unfortunately, Jiangxi Zhihao is currently in a shutdown state.

Regarding Jiangxi Zhihao’s current situation, Ji Mian News called Hongban Technology’s public phone number. A relevant person said that it is currently “(Jiangxi Zhihao) in shutdown status and has no operations.” When asked how much capacity Jiangxi Zhihao has, the person said the company “has not yet conducted on-site verification,” and regarding other details, the person said they would “pay attention to the follow-up announcement content; if there are any major matters, we will disclose them in a timely manner.”

Ji Mian News also contacted the administrator responsible for Jiangxi Zhihao’s reorganization work. The response was similar: “(Shutdown) has been going on for quite a while.” When Ji Mian News tried to learn more about the company, the administrator said it was “not very convenient.”

Hongban Technology’s acquisition is a microcosm of the PCB industry’s frantic asset grab at present.

This year alone, Pengding Holdings (002938.SZ) announced an 11 billion yuan plan to build a high-end PCB production base, Shenghong Technology (300476.SZ) unveiled a 20 billion yuan investment plan, and Huadian Shares (002463.SZ) disclosed investment plans of 5.5 billion and 6.8 billion yuan respectively. Across the entire PCB sector—especially in areas related to AI servers and advanced HDI—companies have already become cutthroat.

Amid this commotion, Hongban Technology’s big purchase may well become a springboard for the company to overtake on the curve, but it also brings challenges that cannot be ignored. How it all turns out remains to be answered by Hongban Technology.