Under the halo of "Zhang Xue Motorcycle" concept stocks, how solid will Hongchang Technology be by 2025?

Indirectly holding shares in Zhang Xue’s motorcycle, leading to a sharp rise in stock price, Hongchang Technology (301008.SZ) released its latest earnings report. Without the halo of the sports industry concept, this traditional home appliance parts company, which is fully transforming into the robotics business, not only hit a new profit low since its listing in 2021 but also experienced a double-digit decline in net profit for the second consecutive year.

The 2025 annual report shows that Hongchang Technology’s total revenue for the year was 1.15B yuan, an increase of 11.68%, with a net profit attributable to the parent of 32.8364 million yuan, down 37.41% year-on-year, and non-recurring net profit of only 15.6989 million yuan, a drop of over 59.72% year-on-year.

Affected by this news, Hongchang Technology reversed its previous upward trend on April 7, with a single-day drop of 12.49%, closing at 36.87 yuan per share.

Financial news notes that, in the composition of non-recurring gains and losses, Hongchang Technology’s fair value change gains and government subsidies in 2025 were 11.8861 million yuan and 6.7369 million yuan respectively. Excluding these two items, its main business is close to break-even.

Hongchang Technology Image source: official website screenshot

Data shows that Hongchang Technology is a home appliance parts manufacturing company established in Jinhua, Zhejiang, in 1996, mainly engaged in the research, production, and sales of fluid solenoid valves, sensors, and other electrical accessories. In 2023, it established a car parts division, mainly providing supporting products for car companies like Leapmotor and Geely through Tier 1 or Tier 2 suppliers. In 2025, it also invested in and held shares of Guangdong Liangzhi Joint Technology Co., Ltd. (“Liangzhi Joint”) to develop core components such as humanoid robot joint modules.

Among them, the home appliance business has always been the mainstay. Reviewing Hongchang Technology’s financial reports over the years, from 2021 to 2025, this segment’s revenue was 760 million yuan, 819 million yuan, 874 million yuan, 1.02B yuan, and 1.08B yuan, with a compound annual growth rate of about 9.16%.

In 2024, Hongchang Technology disclosed its “automotive electronic water pump business” for the first time, with revenue of 1.7167 million yuan, accounting for 0.17% of total revenue; in 2025, it was integrated into “automotive parts business,” with revenue rising to 58.8311 million yuan, and the proportion of revenue increasing to 5.13%. During the same period, the company also disclosed other business performance including molds and automation equipment, with revenue of 6.7208 million yuan in 2024, a 26.25% increase to 8.49M yuan in 2025, and the revenue share rising from 0.65% to 0.74%.

However, its profit performance has not benefited from this.

Chart: Zhou Dingxin

iFind from Tonghuashun shows that from 2021 to 2025, the gross profit margins of its home appliance business were 18.64%, 17.42%, 19.90%, 16.22%, and 13.79%, showing an overall decline of 4.85 percentage points. The company explained that this was mainly due to downstream terminal price reductions, rising raw material costs, and intensified market competition. Among these, enameled wire accounts for over 30% of total procurement, and its sharp price increase has had a significant impact on net profit for the period.

Regarding the automotive business, the gross profit margin was -7.85% in 2024, improving to -3.00% in 2025, but still negative. According to the company’s statement, this was mainly due to losses from its wholly owned subsidiary “Zhejiang Hongchang Zhiyuan Automotive Parts Co., Ltd.,” which in 2025 had revenue of 41.2M yuan and a net loss of 11.95M yuan.

Notably, Hongchang Technology’s 2026 performance outlook shows that the company aims to add a qualification as a first-tier supplier for a large-scale passenger car manufacturer this year and to turn the automotive business profitable.

As for other businesses, the gross profit margin was 42.65% in 2024 and 50.82% in 2025. The company explained: “This is mainly due to the internal automation equipment R&D成果转化为外部产品.”

According to the 2025 research report from Caitong Securities, Liangzhi Joint has now covered several top robot core component manufacturers such as Zhujiji Power, Yushu, and Xinghai Tu, and has also established an R&D headquarters in Hangzhou and built an intelligent manufacturing factory in Pinghu, Jiaxing, with scale orders expected to be gradually released.

In February 2026, the company signed an investment agreement with shareholders related to Liangzhi Joint to acquire a total of 21% of the shares, and after the business registration change, it will hold 51% of the shares to achieve control. According to Hongchang Technology’s announcement, the unaudited financial data of Liangzhi Joint for 2025 shows that the company achieved revenue of 15.3136 million yuan last year, with a loss of 1.7989 million yuan.

As the market returns to rationality, Zhang Xue’s motorcycle halo is gradually fading, and Hongchang Technology has recently retraced more than 12.82%. In 2026, whether its second entrepreneurial phase in the automotive business can turn losses into profits, and whether the early bets on robot joint modules will materialize, will determine whether this “veteran home appliance parts manufacturer” can truly emerge from the pain of transformation.

Regarding the recent speculation on sports concept stocks, Financial News also inquired with Hongchang Technology’s investor relations department, which stated: “The company is not involved in sports events or equipment manufacturing-related businesses.”