Haoshanghao plans to raise 59.5 million yuan to acquire its subsidiary. The target company’s net profit last year was only 824k yuan. Four major questions remain to be answered.

The Paper’s reporter | Zhang Guangri    The Paper’s editor | Wu Yongjiu

Recently, Haoshanghao has released a proposed plan for a share placement to raise additional capital. The acquisition projects included in the placement plan have drawn the attention of reporters from The Daily Economic News (hereinafter referred to as “The Paper’s reporter”). Haoshanghao plans to raise RMB 59.50 million to acquire the remaining 49% equity interest in its controlled subsidiary, Baohui Xinwei. However, Baohui Xinwei was established for less than one year, and its net profit last year was only RMB 0.8240 million. In the proposal, Haoshanghao did not provide detailed explanations regarding many important matters concerning Baohui Xinwei.

Haoshanghao’s principal business is the distribution of electronic components, and the electronic components distribution business accounts for more than 99% of the company’s total operating revenue. The company mainly sells electronic components to manufacturers of electronic products in application areas such as consumer electronics, industrial energy, automotive electronics, robotics, and communications and data centers, and provides services including relevant product design solutions and technical support.

Haoshanghao listed on the SZSE in 2022. After listing, the company’s net profit has continued to decline significantly. According to Eastmoney, from 2021 to 2024, Haoshanghao’s net profit was RMB 186.00 million, RMB 99.2241 million, RMB 55.8754 million, and RMB 30.1433 million, respectively.

The overall progress of Haoshanghao’s IPO raised-funds projects has also fallen short of expectations. A report recently released by Haoshanghao on the use of proceeds from the prior fund-raising shows that in 2024, the company terminated the “Headquarters and R&D Center Construction Project,” and permanently supplemented working capital with the corresponding remaining raised funds; in 2025, the company changed the intended use of the raised funds for the “IoT Wireless Module and Smart Home Product Design and Manufacturing Project”; as of the end of 2025, the two projects expected to generate benefits had not yet entered full production.

In 2025, the global semiconductor market ended the adjustment cycle it had previously been in and entered a new round of an upward trend. The market size grew significantly, AI became the core growth driver, and subcategories showed differentiated growth patterns. As a core link connecting upstream chip manufacturers with downstream manufacturing endpoints, electronic components distribution benefits from the semiconductor industry’s recovery, the AI boom, and upgrades in downstream end-customer demand.

Benefiting from the industry recovery, Haoshanghao’s performance returned to growth in 2025. According to Eastmoney, in 2025 the company achieved operating revenue of RMB 8.37B, up 15.72% year over year; it achieved net profit of RMB 76.1997 million, up 152.79% year over year.

With improving performance, Haoshanghao’s stock price also continued to strengthen in 2025. Calculated using the previously adjusted basis, in 2024 Haoshanghao’s stock price hit a low of RMB 6.76; in August 2025, the company’s stock price rose to a high of RMB 42.61. As of April 2, 2026, Haoshanghao’s closing price was RMB 27.41, with a market capitalization of about RMB 8.18B and a trailing dynamic P/E ratio of more than 100 times.

On the evening of March 31, 2026, Haoshanghao released its proposed plan for the share placement. The proposal shows that, for this round of its issuance of A-shares to specific targets, the company plans to raise no more than RMB 265 million in total proceeds. After deducting issuance expenses, the proceeds are planned to be invested in the following three projects: 1) the “Intelligent Warehousing and Logistics Center Project,” with a total investment of about RMB 130 million; 2) the “Project to Acquire 49% Equity Interest in Baohui Xinwei,” with a total investment of about RMB 59.50 million; 3) the “Supplement Working Capital Project,” with a total investment of RMB 75 million.

（Image source: Screenshot from Haoshanghao’s announcement）

The acquisition project included in Haoshanghao’s share placement proposal has attracted the attention of The Paper’s reporter.

According to the share placement proposal, Haoshanghao plans to acquire 49% of the equity interest in Shenzhen Baohui Xinwei Electronic Co., Ltd. (hereinafter referred to as “Baohui Xinwei”), a controlled subsidiary, by paying cash through its wholly owned subsidiary Shenzhen Milian. The acquisition price is RMB 59.50 million. Before this transaction, Shenzhen Milian held 51% of Baohui Xinwei’s equity. After this transaction is completed, Shenzhen Milian will hold a total of 100% of Baohui Xinwei’s equity.

Haoshanghao has set performance targets for the acquisition target, Baohui Xinwei. Baohui Xinwei’s performance targets are divided into three phases, as follows: from July 1, 2025 to June 30, 2026, the non-recurring gains and losses (deducted) net profit shall reach RMB 10 million; from July 1, 2026 to June 30, 2027, the non-recurring gains and losses (deducted) net profit shall reach RMB 12 million; from July 1, 2027 to June 30, 2028, the non-recurring gains and losses (deducted) net profit shall reach RMB 15 million. Within 90 days after each performance period ends, Haoshanghao will, in order, acquire 19%, 15%, and 15% of Baohui Xinwei’s equity from the counterparty, based on the calculation method agreed in the agreement.

（Image source: Screenshot from Haoshanghao’s announcement）

It is worth noting that in 2025, Baohui Xinwei’s net profit was only RMB 0.8240 million, while the cash flow from operating activities was approximately -RMB 121 million.

（Image source: Screenshot from Haoshanghao’s announcement）

Baohui Xinwei was established for less than one year. Baohui Xinwei was established on June 6, 2025 by joint investment from Shenzhen Milian and Shenzhen Baohui Xinwei Technology Co., Ltd. (hereinafter referred to as “Baohui Xinwei Technology”). Among them, Shenzhen Milian contributed RMB 5.10 million in the form of monetary contribution, accounting for 51% of the registered capital; Baohui Xinwei Technology contributed RMB 4.90 million in the form of monetary contribution, accounting for 49% of the registered capital.

（Image source: Screenshot from Haoshanghao’s announcement）

Baohui Xinwei’s minority shareholder, Baohui Xinwei Technology, appears to be a company established specifically for this acquisition. Baohui Xinwei Technology was established on March 18, 2025, with registered capital of RMB 10 million and paid-in capital of RMB 0. According to Tianyancha, the actual controller of Baohui Xinwei Technology is Zhao Liang, and the voting rights ratio reaches 100%.

（Image source: Screenshot from Haoshanghao’s announcement）

In May 2025, the “Investment Cooperation Agreement” signed by Shenzhen Milian, Baohui Xinwei Technology, Zhao Liang, and Ma Guanghui stipulated that Zhao Liang and Ma Guanghui would transfer the assets, business, and personnel related to the core product lines of the two companies whose actual control is held by them to the joint venture company Baohui Xinwei and the Hong Kong subsidiary companies fully held by the joint venture company.

Baohui Xinwei’s principal business is distribution of electronic components. It mainly sells electronic components such as power chips it represents to manufacturers of electronic products in application areas including consumer electronics, computers, automotive electronics, and others. Currently, Baohui Xinwei has authorization from well-known original manufacturer MPS (Chip Source Systems) and has established business cooperation relationships with well-known customers such as Yinzong Shiji, Caisiku, Guoguang Electric, and Zhaochi Shares.

Regarding the acquisition project included in Haoshanghao’s share placement proposal, The Paper’s reporter discovered four major questions that need clarification.

First, why did Haoshanghao choose such a complex transaction arrangement with Baohui Xinwei Technology? Haoshanghao first invested to set up a joint venture company with 51%. After the transaction counterparty’s actual controller injects core assets and business, then over three years Haoshanghao will acquire the remaining 49% equity interest from the counterparty using a fixed formula. This structure is highly similar to “installment asset acquisition,” but in form it is split into two steps: “establishing a joint venture” and “acquiring minority equity.” If Haoshanghao could have completed the asset purchase in one go, why use the approach of “acquiring equity in the joint venture step by step”?

Second, where exactly does the huge operating cash outflow of Baohui Xinwei go? Baohui Xinwei’s net profit for FY2025 was RMB 0.8240 million, but the cash flow generated from operating activities in the same period was approximately -RMB 121 million. It is not hard to see that Baohui Xinwei’s net profit is highly divergent from its operating cash flow amount. Is the large operating cash outflow used to stock inventory, or does it form a large amount of accounts receivable? Does this mean there is a huge risk that its business model involves severe “advance funding” and difficulty in collecting receivables?

Third, what is the basis for supporting Baohui Xinwei’s “rocket-like” leap in performance? Baohui Xinwei was established in June 2025, and its net profit for the entire year 2025 was only RMB 0.8240 million. However, the performance commitment requires the deducting non-recurring profit in the first assessment period to reach RMB 10 million, an increase of more than 11 times, and the two subsequent assessment periods also need to maintain high growth. Does Baohui Xinwei have signed orders that sufficiently cover this profit? If it cannot meet the targets, will the quality of the assets acquired by the listed company be significantly discounted?

Fourth, what is the exact share of sales from Baohui Xinwei’s top five customers? In the share placement proposal, only the names of Baohui Xinwei’s customers are listed, but its degree of reliance is not quantified. Does Baohui Xinwei have reliance on a single customer? Will customer relationships create uncertainty as a result of this acquisition?

The Paper’s reporter sent the above questions to the email address of Haoshanghao’s securities department, but as of the time of publication, no response has been received.

Cover image source: Zhu Yu

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