Dongshan Precision to List in Hong Kong: 80% of Its Revenue Comes From Overseas Markets, Optical Modules Emerge As New Growth Driver | Overseas Peris

On October 28, Dongshan Precision officially listed on the Main Board of the Hong Kong Stock Exchange. The global offering of H shares this time is approximately 114 million shares, with an offering price of HK$86.80 per share, raising approximately HK$97.17 billion. On the first day of listing, it opened at HK$82.40 per share, and as of press time, it was at HK$85.25 per share, with a market capitalization of HK$1.66 trillion.

Founded in Suzhou in 1998, Dongshan Precision initially engaged in the business of precision metal structural components, and was listed on the Main Board of the Shenzhen Stock Exchange in April 2010. This listing in Hong Kong is its secondary listing 16 years later.

According to the prospectus disclosure, the net proceeds from this offering will be used in four aspects: constructing new facilities and upgrading existing production lines and equipment, potential strategic investments or acquisitions, repaying part of existing debts, and working capital and general corporate purposes.

Capacity construction is the main part: part of the funds will be invested in the high-end PCB base in Zhuhai, which will add approximately 636,000 square meters of designed annual production capacity after two phases of production; the other part will support the capacity expansion of high-speed EML laser chips and optical modules, to make up for the capacity shortboard for the integration of Source Photonics. From metal structural components to PCBs, and then to optical modules, Dongshan Precision has placed its bets on AI computing power this time.

With the accelerated construction of AI large models and global computing power infrastructure, the value of PCBs and optical modules has been re-evaluated. PCB is the basic component of electronic equipment, undertaking the functions of electrical interconnection, signal transmission and mechanical support; optical modules are responsible for photoelectric conversion within and between data centers. According to CIC, in most AI servers, PCBs, optical chips and optical modules together account for about 9%-14% of the material cost, which is the second largest cost item after GPUs.

Dongshan Precision is mainly engaged in the design, production and sales of PCBs, optical modules, precision components, touch panels and liquid crystal display modules, whose products are widely used in smartphones, smart vehicles, data centers and other fields.

According to CIC, in terms of revenue in 2025, Dongshan Precision is the world's largest PCB supplier for edge AI devices, with a market share of 26.90%; it is also the world's second largest flexible printed circuit supplier, with a market share of 24.50%, and has maintained this position for five consecutive years since 2021. In 2025, revenue contributed by customers outside mainland China accounted for 81.40%. Its customers cover four of the world's top five consumer electronics brands, the world's top five pure electric vehicle manufacturers, and four of the world's top five cloud service providers.

01

Growth Driven by Optical Modules

As a New Increment

From the perspective of financial performance, Dongshan Precision's revenue growth has been stable in the past three years, but its profits have fluctuated. The prospectus shows that from 2023 to 2025, its revenue increased from 33.651 billion yuan to 40.125 billion yuan; while its profit for the year decreased from 1.965 billion yuan to 1.393 billion yuan.

In 2024, Dongshan Precision's profit dropped from 1.965 billion yuan to 1.085 billion yuan, which the prospectus attributed to increased losses in communication equipment components and other businesses (mainly LED display products). In 2025, the profit rebounded to 1.393 billion yuan, the main driving factor being that Source Photonics, whose acquisition was completed last October, began to include its performance in Dongshan Precision's books. The rebound in 2025 recouped part of the 2024 decline, but the profit still did not return to the 2023 level.

By breaking down Dongshan Precision's revenue structure, we can see that PCB is the largest source of revenue, contributing 25.620 billion yuan in revenue and 4.269 billion yuan in gross profit in 2025, while optical modules appeared in the financial statements for the first time after the completion of the acquisition of Source Photonics in October 2025. Although the consolidation period of optical modules was only three months, it contributed 1.436 billion yuan in revenue and 528 million yuan in gross profit.

Over the past 20 years, Dongshan Precision's business started from metal structural components, and successively expanded to PCBs, precision components, touch displays, and then to optical modules. Almost every business upgrade coincided with the node of end-user demand shifting, and the method was similar: first identify changes in demand, obtain capabilities through mergers and acquisitions, and then turn capabilities into scale through production capacity and integration.

In the era of smartphones, as mobile phones evolved to be thinner and lighter, traditional rigid boards could not meet the wiring requirements inside the fuselage, and flexible boards became key components. In 2016, Dongshan Precision acquired the American flexible board enterprise MFLEX, stepping into the flexible board track in the PCB field from a metal structural component supplier, and flexible boards have been Dongshan Precision's largest product ever since.

In the era of automotive electrification, the consumption of battery management, in-vehicle screens and precision structural components has increased. Dongshan Precision acquired GMD, a German automotive component supplier, in 2025, and set up factories next to European automakers, thus transforming from a consumer electronics supplier to an automotive electronics supplier. In the same period, revenue from automotive components increased from 2.942 billion yuan in 2023 to 5.167 billion yuan in 2025, a 75.60% increase in two years.

In the current wave of AI computing power, the demand of AI servers for high-layer PCBs, high-speed optical modules and upstream optical chips is unprecedented. Dongshan Precision acquired Multek in 2018 to obtain high-end PCB manufacturing capabilities; and acquired Source Photonics in 2025 to supplement its optical chip and optical module capabilities.

According to CIC, Source Photonics, acquired by Dongshan Precision, is one of only three companies in the world that have the capabilities of vertically integrated design, manufacturing and packaging from optical chips to optical modules, and also one of the few enterprises in mainland China that have mass production capabilities for 100G and 200G optical chips. At present, its 1.6T products are undergoing verification by major customers, and 3.2T and higher products are under research and development.

This forms Dongshan Precision's unique position in the AI chain: it is the only supplier in the world that has capabilities in PCBs, optical chips and optical modules at the same time.

02

81% of Revenue Comes from Overseas Markets

Production Capacity in Dozens of Countries

Overseas markets are the main source of Dongshan Precision's revenue. From 2023 to 2025, revenue contributed by customers outside mainland China (by customer registration place) increased from 28.002 billion yuan to 32.665 billion yuan, accounting for 83.20%, 83.20% and 81.40% of the total revenue respectively.

Among them, the proportion of revenue from the US market decreased from 57.50% to 50.80%, but the absolute amount still increased from 19.334 billion yuan to 20.386 billion yuan. The proportion of Europe and other regions rose from 4.00% to 8.10%, with revenue increasing from 1.340 billion yuan to 3.232 billion yuan, and the proportion of other Asian countries (excluding Japan) rose from 2.80% to 4.20%.

US customers are still the main source, but the increment is spreading to Europe and other Asian regions. However, a customer being in the US does not mean the goods are sold to the US. By shipment destination, the value of goods shipped to the US by Dongshan Precision in 2025 only accounts for 8.30%, so the impact of US tariffs on it is limited. This is because the common form under the current consumer electronics OEM system is that brands are concentrated in the US, while assembly capacity is distributed in China, Vietnam and India, and supply chain enterprises' shipment destinations follow their customers' factories.

In 2016, Dongshan Precision acquired the American flexible board enterprise MFLEX, thus entering the supply chain of the world's leading consumer electronics brands; it set up its overseas headquarters in Singapore in 2019; built its first overseas manufacturing plant in Mexico in 2022; started construction of the Chonburi plant in Thailand in 2023; acquired 97.48% equity of Source Photonics and completed the acquisition of GMD in 2025. Over the past ten years, its globalization path from North America to Europe, from flexible boards to optical modules has gradually taken shape.

As of May 12, 2026 (the last practicable date of the prospectus), Dongshan Precision has production facilities in 14 countries and regions across Asia, North America, Europe and Africa. Among them, the Yancheng base and Suzhou base are the largest, undertaking the production of PCBs and automotive components; Chonburi, Thailand undertakes overseas PCB orders; European bases such as Hungary and France mainly supply automotive precision components; and the optical module production lines are located in Chinese Taipei, Changzhou and Chengdu. Overseas employees account for nearly 20% of the total number of employees.

In terms of R&D, it has R&D teams in mainland China, the United States, Singapore, Chinese Taipei, France, Sweden, the Netherlands, Italy and Germany. As of December 31, 2025, it had 5,074 R&D personnel, accounting for 12.90% of the total number of employees; the cumulative R&D expenditure from 2023 to 2025 was 3.845 billion yuan, accounting for a stable proportion of 3.40% to 3.50% of the annual revenue of each year.

Starting from a sheet metal factory in Suzhou in 1998, Dongshan Precision's production bases have now extended to 14 countries and regions. According to the prospectus disclosure, the funds raised from this Hong Kong listing will be mainly used for production capacity expansion. At present, the new base in Zhuhai is scheduled to be put into production in two phases starting from 2026, and the capacity expansion of Source Photonics is also underway. More products will be sent from these factories to customers all over the world.

*The information and opinions contained in this article do not constitute any investment advice and are for reference only.

This article is from the WeChat Official Account "Zhejiang Enterprises Globalization Comprehensive Service Port".