Qiangda Circuit Responds to Convertible Bond Review Inquiry, Plans to Raise 550 Million Yuan to Cover Funding Gap for Previous Investment Projects

Qiangda Circuit (Stock abbreviation: Qiangda Circuit) recently responded to the Shenzhen Stock Exchange’s inquiry letter regarding its review of the issuance of convertible corporate bonds to unspecified objects. The company plans to raise no more than 550 million yuan through this issuance to supplement the funding gap for the “Nantong Qiangda Circuit Technology Co., Ltd. annual production of 960k square meters of multilayer boards and HDI boards project,” which was part of the initial public offering fundraising project.

Previous fundraising project progressing smoothly; funding gap needs to be supplemented

According to the disclosed reply, the total investment in the previous IPO fundraising project by Qiangda Circuit was 1 billion yuan, with planned use of 363.2041 million yuan from the raised funds. As of February 28, 2026, the project had used a total of 348.3911 million yuan of the raised funds, with a utilization rate of 95.92%. The main construction work of the infrastructure has been basically completed, and the project passed the completion acceptance in November 2025. Currently, decoration and equipment procurement and installation are underway, with an expected transfer to fixed assets in the second quarter of 2026.

Due to a significant gap between the actual net amount of funds raised in the previous IPO and the total investment of the project, the company has used 14.8451 million yuan of its own funds but still needs to supplement funds through this convertible bond issuance. The funds raised this time do not include the funds already invested by the board of directors and do not involve any replacement.

Adjustment of the fundraising project focusing on high-end fields; phased production to absorb capacity

The company has adjusted the internal investment structure of the previous fundraising project, mainly including increasing the proportion of high-end HDI products, focusing on application fields such as AI servers and computing power, satellite communications, industrial automation, and automotive electronics. The equipment investment period has been extended to the second half of T+2 years to T+6 years. After adjustment, the total investment remains at 1 billion yuan, with an increase of 59.2476 million yuan in equipment purchase costs, and corresponding reductions in construction and installation costs.

The project is planned to be phased into production, starting gradually in the second half of 2026 (T+3 years). The capacity utilization rates are expected to reach 18%, 35%, 75%, and 100%, respectively, by T+6 years (2029), when full capacity is achieved. After reaching full capacity, it is expected to generate annual operating revenue of 1.63618 billion yuan with an average gross profit margin of 29.58%. The company states that the additional capacity mainly targets emerging application fields. Combined with nearly 3,000 active customer resources and order situations, the overall risk of capacity digestion is relatively small.

Stable financial data; strong debt repayment capability

As of September 30, 2025, Qiangda Circuit’s asset-liability ratio was 24.98%, lower than the average of comparable companies in the industry. During the reporting period, the company’s operating income steadily increased, and net profit attributable to the parent after deducting non-recurring gains and losses continued to grow, with figures of 81.9472 million yuan, 85.0324 million yuan, and 960k yuan for 2022 to 2024, respectively. The net cash flow from operating activities averaged over 100 million yuan annually, providing a solid foundation for the repayment of principal and interest of this convertible bond.

It is estimated that after the completion of this convertible bond issuance, the company’s asset-liability ratio will rise to 44.83%. If all bonds are converted, it will decrease to 18.37%. In an extreme scenario, assuming bondholders do not convert, the maximum annual interest payment would be 12.1 million yuan, which the current profitability can cover.

Risk warning

The company also disclosed risks related to insufficient fundraising, capacity digestion, lower-than-expected benefits, increased depreciation and amortization, and bond principal and interest repayment. It specifically pointed out that significant adverse changes in the market environment or delays in project construction could impact the company’s operating performance.

The proposal for this issuance has been approved by the company’s board of directors and still requires approval at the shareholders’ meeting, review and approval by the Shenzhen Stock Exchange, and registration by the China Securities Regulatory Commission.

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