Author | Cui Yuanwei Editor | Chen Junda
Xin Dongxi reported on October 28 that today, Suzhou-based PCB manufacturer Dongshan Precision was listed on the main board of the Hong Kong Stock Exchange. Its issue price was HKD 86.80 per share (approximately CNY 73.8 per share), and it opened at HKD 82.40 per share (approximately CNY 70.1 per share), breaking below the issue price at opening. As of 9:33 AM today, its stock price had fallen 4.38% from the issue price to HKD 83.00 per share (approximately CNY 70.1 per share), with a total market capitalization reaching HKD 161.467 billion (approximately CNY 137.28 billion).
The gross proceeds from Dongshan Precision's global offering of H shares were approximately HKD 9.876 billion (approximately CNY 8.40 billion), with net proceeds of approximately HKD 9.717 billion (approximately CNY 8.26 billion). Established in 1998, Dongshan Precision originated as a small sheet metal stamping factory founded in Dongshan Town, Suzhou, in 1980. It has now evolved into a precision manufacturing enterprise focused on smart manufacturing with a global footprint. Headquartered in Suzhou, it is the world's second-largest FPC (Flexible Printed Circuit) supplier and one of the top three global PCB (Printed Circuit Board) suppliers.
In September 2025, Dongshan Precision acquired a 97.48% stake in Source Photonics, a global optical module supplier, gaining self-developed optical chip capabilities centered on high-speed EML chips. Currently, the company has formed four core business segments: electronic circuits, optical modules (including optical chips), precision components, and optoelectronic display modules. The prospectus indicates that Dongshan Precision is the only supplier globally possessing vertical integration capabilities across PCBs, optical chips, and optical modules. According to CIC Consulting data, based on2025 sales revenue, Dongshan Precision ranked third in the global PCB market, which reached USD 85.2 billion (approximately CNY 568.16 billion), with sales revenue of approximately USD 3.62 billion (approximately CNY 24.14 billion) and a market share of 4.2%.
Following the acquisition of Source Photonics in September 2025, Dongshan Precision ranked seventh in the global optical module market, which reached USD 24.5 billion (approximately CNY 163.38 billion), with sales revenue of approximately USD 715 million (approximately CNY 4.77 billion) and a market share of 2.9%.
Dongshan Precision's customer base covers four of the world's top five consumer electronics brands, the world's top five electric vehicle manufacturers, and the world's top five cloud service providers. In 2025, revenue contribution from customers outside mainland China reached 81.4%. In 2010, Dongshan Precision was listed on the A-share market of the Shenzhen Stock Exchange. As of 9:33 AM today, Dongshan Precision's A-share price was CNY 102.88 per share, up 1.77% from the previous closing price of CNY 101.09 per share, with a total market capitalization of CNY 188.436 billion.
Approximately 64.5% of the funds raised will be allocated to new facility construction and production line upgrades. Specifically, about 27% will be used for expanding domestic capacity for high-speed EML chips and optical modules, and about 25% will be used to build a new high-end PCB plant in Zhuhai; approximately 12.5% will be used to upgrade domestic smart manufacturing facilities; about 20% is reserved for potential strategic investments or acquisitions; about 5.5% will be used to repay project construction loans; and the remaining approximately 10% will supplement working capital.
01.Nearly CNY 3 Billion Net Profit in H1 2026; Optical Module Gross Margin at 39.2%
From 2023 to 2025, Dongshan Precision's revenue was CNY 33.651 billion, CNY 36.770 billion, and CNY 40.125 billion, respectively. Revenue for the first half of 2026 was CNY 27.798 billion, a 64% increase from CNY 16.955 billion in the same period last year. During the same periods, its net profit was CNY 1.965 billion, CNY 1.085 billion, and CNY 1.393 billion, respectively; net profit for the first half of 2026 reached CNY 2.985 billion, nearly tripling from CNY 759 million in the same period last year. R&D expenses during these periods were CNY 1.161 billion, CNY 1.267 billion, and CNY 1.417 billion, respectively, reaching CNY 784 million in the first half of 2026.
Regarding gross margins, the company's overall gross margin was 13.9%, 11.5%, and 12.4% from 2023 to 2025, respectively. It surged to 19.4% in the first half of 2026 but remained significantly lower than peers primarily focused on high-layer-count boards and AI server PCBs, such as Shennan Circuits (31.01%), Victory Giant Technology (33.22%), and WUS Printed Circuit (38.72%). This is mainly due to the lower gross margins of its automotive parts and display module businesses.
The substantial improvement in gross margin in the first half of 2026 benefited from the consolidation of the high-margin optical module business. This segment's gross margin rose from 36.8% in 2025 to 39.2% in the first half of 2026. Dongshan Precision's core businesses encompass four major segments: Printed Circuit Boards (PCBs), optical modules (including optical chips), precision components, and touch panels and LCD modules (LCMs). Its PCB products include flexible printed circuits (FPCs), rigid boards, and rigid-flex boards. The soft board business is primarily operated by MFLEX, a US company acquired in 2016, while the rigid board and rigid-flex board businesses are primarily operated by Multek, acquired from Flex Ltd. in 2018.
Dongshan Precision's soft boards cover single-layer to multi-layer structures, using thin copper foil of 5 to 12μm, supporting static/dynamic bending and high-frequency signal transmission, and are mainly used for internal connections in consumer electronics such as smartphones and wearable devices. For rigid boards, mass production currently includes ultra-high-layer-count boards with over 78 layers and 7-step thick HDI, with 11-step HDI under development. These high-layer-count boards and high-order HDIs are core solutions for AI server motherboards and high-end switch motherboards.
Additionally, the precision components segment mainly includes metal structural parts for new energy vehicles and RF devices such as antennas and filters for communication base stations, with customers covering the world's top five pure EV manufacturers. The touch panel and LCM segment products include touch panels, LCD/OLED display modules, and cover glass, applied in tablets, laptops, automotive center consoles, industrial control, and medical fields. The company's optical module business layout covers both ends of the value chain: optical chips and optical modules.
In terms of optical chips, Dongshan Precision possesses IDM full-process self-development and mass production capabilities. Currently, 100G and 200G PAM4 EML chips have achieved commercialization, while 400G EML and high-power continuous wave light sources are under development. The company states it is one of the few domestic enterprises achieving large-scale mass production of high-end EML optical chips. Its optical module products cover all speeds from 10G to 1.6T, with next-generation products of 3.2T and above under development. Mass production of the flagship 800G models continues to scale up.
By business segment, Dongshan Precision's PCB electronic circuit business remains the largest source of revenue. Revenue from this segment was CNY 23.261 billion, CNY 24.801 billion, and CNY 25.620 billion from 2023 to 2025, respectively, with its proportion decreasing from 69.1% to 63.9%. In the first half of 2026, revenue was CNY 12.530 billion, accounting for 45.1%. Soft boards are the absolute mainstay, with revenue of CNY 21.875 billion in 2025. Revenue from the precision components segment was CNY 5.930 billion in 2025, accounting for 14.8%; in the first half of 2026, revenue was CNY 6.581 billion, with the proportion rising to 23.7%.
Revenue from touch panels and LCD modules was CNY 5.986 billion in 2025, accounting for 14.9%. From October 1, 2025, to December 31, 2025, revenue from the optical module business was CNY 1.435 billion, accounting for 3.6%. In the first half of 2026, revenue from this segment was CNY 5.351 billion, with the proportion rising to 19.2%, making it the fastest-growing segment for Dongshan Precision.
As of June 30, 2026, R&D personnel accounted for approximately 11.3% of Dongshan Precision's total employees. According to the prospectus disclosure, as of June 30, 2026, Dongshan Precision and its major Chinese subsidiaries held a total of 899 patents, 66 registered trademarks, 172 software copyrights, 7 domain names, and 1 copyright in mainland China. The intellectual property portfolio covers production processes and product design.
02.Apple Is the Largest Customer; Meta Becomes Second-Largest This Year
During the reporting period, Dongshan Precision's customer concentration showed a clear downward trend: the revenue proportion of the top five customers decreased from 73.5% in 2023 to 54.1% in the first half of 2026. Customer A has collaborated with Dongshan Precision since 2016 and has consistently been its largest customer from 2023 to the first half of 2026. However, the revenue contribution proportion from this customer has been diluted year by year, declining from 55.8% in 2023 to 30.1%. The prospectus shows that although Customer A's revenue proportion has decreased annually, the absolute value of revenue has remained relatively stable.
The decline in Customer A's proportion is mainly due to the ramp-up of new businesses following the consolidation of Source Photonics and GMD. Notably, Customer I established cooperation with Dongshan Precision only in 2025 but jumped to become the company's second-largest customer in just the first half of 2026, thanks to the optical module business. Based on information from the prospectus and public sources, Customer A is likely US-based Apple, and Customer I is likely Meta.
In the first half of 2026, Dongshan Precision's procurement from its top five suppliers amounted to CNY 3.568 billion, accounting for 18.5% of total procurement. Procurement from the largest supplier was CNY 1.399 billion, accounting for 7.3%. Supplier concentration also showed a downward trend. According to the prospectus, there is a bidirectional "buy-and-sell" relationship between Dongshan Precision and Apple: Dongshan Precision sells soft boards to Apple while purchasing structural parts from Apple. Related procurement in the first half of 2026 was CNY 467 million, accounting for 2.4% of total procurement.
03.Yuan Family Controls Over 30%; Alibaba Participates in Investment
Dongshan Precision is a family-owned enterprise. Founder Yuan Fugen established the company in October 1998 with a 60% stake. His two sons, Yuan Yongfeng and Yuan Yonggang, joined the company successively and took over operations. After the restructuring in 2007, Yuan Fugen's stake dropped to 12.71%, but he remains one of the controlling shareholders. Current Chairman and Non-Executive Director Yuan Yonggang holds a Bachelor's degree in Information Engineering from the University of Hull, UK. He joined the company in October 1998, starting as Minister of Marketing, and served as Deputy Manager and Vice Chairman before becoming Chairman in December 2007. In November 2025, he transitioned to the role of Non-Executive Director. As a member of the founding family, he is primarily responsible for overall strategy and development. He currently serves as Vice President of the Jiangsu Provincial Federation of Industry and Commerce, Vice Chairman of the Suzhou Municipal Federation of Industry and Commerce, a Deputy to the 17th Suzhou Municipal People's Congress, and has served as a Director of Anhui Landun Photoelectron since 2019.
Executive Director and General Manager Yuan Yongfeng obtained a university diploma in Public Finance and Taxation from Jiangsu Open University in July 1998. He joined the group in October 1998, serving as Minister of Manufacturing and Supervisor, before becoming Director and General Manager in December 2007. In November 2025, he transitioned to Executive Director. He is responsible for overall operations and development and currently serves as a Member of the CPPCC of Wuzhong District, Suzhou, and Chairman of the Dongshan Town Chamber of Commerce.
After the global offering, concerted actors Yuan Yonggang, Yuan Yongfeng, and Yuan Fugen collectively hold approximately 31.3% of the shares, jointly constituting the controlling shareholders of Dongshan Precision. A-share public shareholders hold approximately 62.85% of voting rights, while H-share shareholders hold approximately 5.85%.
This H-share issuance introduced 20 cornerstone investors. The total cornerstone placement was approximately USD 680 million (approximately CNY 4.53 billion), subscribing to approximately 56.8916 million H-shares at the maximum offer price, accounting for about half of the offered shares. Investors include Alibaba Investment, a wholly-owned subsidiary of Alibaba; Montage HK, under Montage Technology; Morgan Asset Management (Asia Pacific); Ruiyuan Fund; CPE Bodhi; LMR; Orient Asset Management; as well as Aurora SF participated by Yonggang Group, and Yonglian Investment under Yongzhuo Holdings.
04.Conclusion: Secondary Listing Fuels Optical Module Capacity Expansion; 60% of Funds Allocated to Transformation Capacity
Dongshan Precision is not the first to cross over into optical modules. Zhongji InnoLight was originally an electrical machinery equipment manufacturer and entered the optical module sector through the acquisition of Suzhou XuChuang in 2017; it is now the world's number one in optical module shipments. HGTECH started with laser equipment, and its subsidiary Accelink Technologies has also become a major global optical module supplier. Dongshan Precision's acquisition of Source Photonics follows a similar M&A crossover path as Zhongji InnoLight. Among the net proceeds from its secondary listing, 64.5% is allocated to capacity expansion, with 27% directly used for optical chip and optical module capacity construction. The investment in transformation accounts for the majority of the fund usage, with a higher proportion than the fundraising arrangements of many other PCB manufacturers going to HK in the same period.