AI Capital Bureau, Shi Tao

On June 10, amidst a surge in the hard technology sector and an upswing in overseas expansion, another Chinese hidden champion mastering core “chokepoint” technologies has made a move toward the capital markets.

According to disclosures by the Hong Kong Stock Exchange last night, Guangdong Tongya Technology Co., Ltd. (hereinafter referred to as “Tongya Technology”), a leader in the high-performance precision metal connection wire sector, has officially submitted its prospectus. This precision manufacturing enterprise is deeply integrated with five cutting-edge, high-precision application scenarios: consumer electronics, precision healthcare, computing center infrastructure, low-altitude economy drones, and humanoid robots.

The prospectus reveals that Tongya Technology experienced rapid performance growth from 2023 to 2025, with a CAGR as high as 32.8%. Based on revenue in 2025, the company secured a 15.5% share of the highly technical global ultra-fine cable conductor market, ranking third globally and first in China. Its impressive pre-IPO shareholder lineup includes heavyweight investors such as Matrix Partners China and Hidden Hill Fund.

A Hardcore 'Money Printer' in the 'Micron-Level' Track

From a financial perspective, Tongya Technology demonstrated strong scalability and explosive growth during the track record period. In terms of revenue, the company recorded RMB 172 million, RMB 206 million, and RMB 303 million in 2023, 2024, and 2025, respectively, with a CAGR of 32.8% from 2023 to 2025.

Correspondingly, profitability steadily improved, with annual profits (net profits) of RMB 31.957 million, RMB 41.943 million, and RMB 47.104 million over the three years. After excluding non-recurring items such as share-based payment expenses and listing expenses, its adjusted net profit measured under non-IFRS criteria reached as high as RMB 32.375 million, RMB 43.436 million, and RMB 51.052 million, respectively, showcasing solid profitability.

As revenue scaled up significantly, Tongya Technology's gross profit declined in 2025. Financial data shows that the company's gross margin rose moderately from 29.4% in 2023 to 30.4% in 2024 but dropped to 25.1% in 2025, a decline of 5.3 percentage points. Concurrently, the company's net profit margin also fell from 20.3% in 2024 to 15.5% in 2025.

The core reason for this temporary slowdown in profitability lies in the sharp fluctuations in upstream raw material prices and the time lag in passing these costs downstream. The main raw materials for Tongya Technology's production are copper, silver, and tin. From 2023 to 2025, direct material costs accounted for 82.6%, 78.2%, and 78.1% of sales costs, respectively, representing an extremely high cost proportion.

In 2025, due to volatility in global commodity markets, prices of copper, silver, and tin rose significantly. As the company currently does not engage in any futures hedging or use other financial instruments to mitigate raw material exposure risks, and some core products are under fixed-price contracts or experience pricing cycle delays with downstream customers, the surge in direct material costs could not be fully and immediately passed on to downstream clients. In 2025, direct material costs soared to RMB 177 million, and sales costs surged by 58.2%, far exceeding the same period 47.1% revenue growth.

Founders Retain Control, with Matrix Partners China, Hidden Hill Fund as Shareholders

As a typical example of a family-run tech startup evolving into a modern joint-stock enterprise, Tongya Technology's shareholding structure and capital evolution path are noteworthy.

The company's founders and core leaders, Mr. Zhao Gang and Mr. Deng Xiang, each boast over 16 years of deep technical and managerial experience in the high-performance precision metal connection wire industry. To firmly establish governance control, Zhao Gang and Deng Xiang signed a Unified Action Agreement on July 31, 2023.

As of the last practical date before the prospectus submission, Mr. Zhao Gang and Mr. Deng Xiang, acting as a unified action group, collectively controlled 65.40% of the company, making them joint controlling shareholders. Notably, Shenzhen Yamei also serves as Tongya Technology's employee equity incentive platform, with limited partners including executive directors Deng Xiang, Long Xiongwei, Wu Jianhua, Zhu Haoyu, and 20 other core current employees, successfully achieving deep alignment between core management and the company's long-term interests.

While the founding team firmly holds the reins, Tongya Technology has leveraged its hardcore technological scarcity to attract remarkable capital inflows in recent years, completing multiple rounds of dense pre-IPO financing. In November 2024, the company resolved to conduct Series C financing, introducing heavyweight investment institutions such as Xiamen Jingheli No.1, Nanjing Matrix Partners China No.1 (a fund under Matrix Partners China), Nanjing Matrix Partners China No.3, Qingdao Hongping, Qingdao Hongshen, Kunshan Gezhi Phase I, and Hidden Hill Fund under GLP, collectively raising RMB 180 million in cash. In March 2026, the company completed Series D financing, bringing in local state-owned enterprises and established hard tech funds such as Jiaxing Nanhu Rongmai, Jia Guo No.2, Dongguan Jinwan Qinghe, and Shenzhen High-Tech Investment, securing an additional RMB 90 million in cash.

Currently, non-listed shares held by 22 existing shareholders will convert into publicly tradable H shares upon completion of this Hong Kong IPO. This capital not only provides ample resources for Tongya Technology's capacity expansion but also strongly endorses its leap to the Hong Kong capital markets and its focus on overseas strategy.

Professional Management Team with Generous Benefits

Accompanying its capitalization, Tongya Technology has assembled an executive director and senior management team with strong professional and diverse backgrounds. Founder Zhao Gang serves as chairman and general manager, overseeing operations and strategy execution; co-founder Deng Xiang acts as executive director and deputy general manager, focusing on technical engineering and product development.

To address supply chain and capital operation gaps, the company recruited Wu Jianhua, who served as supply chain executive at A-share listed company Xinbao Corporation (a small appliance giant) for 11 years, as Chief Operating Officer (COO). It also brought in Zhu Haoyu, a young financial elite with a Fudan University background and experience at KPMG, CITIC Construction Securities, Geely Holding's Radar New Energy Vehicles, and Lotus Technology, as Chief Financial Officer (CFO) and joint company secretary.

In terms of compensation and incentives, Tongya Technology is generous. Employee benefit expenses in administrative costs rose from RMB 2.912 million in 2023 to RMB 6.920 million in 2025, while equity-settled share-based payment expenses increased annually, reaching RMB 24.72 million in 2025. High salaries and equity incentives for executives and core employees reflect the company's emphasis on top talent, though they have also contributed to recent increases in management expense costs.

The 'Invisible Capillaries' of AI Computing Power and Low-Altitude Economy

What enables Tongya Technology to compete with global giants is its formidable technological barriers in the precision metal connection wire sector. The technical crown of high-performance precision metal connection wires lies in “miniaturization” and “ultra-fine wire diameter control.”

Tongya Technology is one of the few hard tech companies globally capable of stably mass-producing ultra-fine cable conductors with a single-wire diameter of 0.008 mm (about one-tenth the diameter of a human hair). The company currently holds 49 Chinese registered patents, including 12 invention patents, and has deeply participated in formulating five group standards related to precision cable conductors. Its core competitive advantage lies in its self-developed “trinity” system across the entire value chain. As of the last practical date, over 60% of the company's total production equipment was self-developed, including core process equipment for wire drawing, stranding, tinning, and shaping, achieving import substitution and breaking foreign monopolies on high-end equipment.

From a business structure and highlight data perspective, Tongya Technology is evolving from a niche consumer electronics player into the “invisible capillaries” of emerging future industries. The company's products are categorized by wire diameter into fine, ultra-fine, and regular types, with ultra-fine products—boasting the highest technical value-add and gross margins—generating RMB 83.744 million in revenue in 2025, accounting for 27.6%. By application scenario, smart terminals (consumer electronics, smart wearables, smart glasses, etc.) still contributed 54.9% of total revenue; precision medical equipment scenarios (high-precision ultrasound machines, endoscopes, brain-computer interfaces) contributed 22.4%; however, the most capital-exciting growth area lies in the company's strong penetration into the computing center and low-altitude economy sectors:

In the AI computing center field: The company has developed silver-plated wire conductor products specifically for high-frequency, high-speed transmission in AI data centers, primarily used in high-speed copper cables (DAC, AEC), directly supplying short-distance high-frequency interconnection cable assemblers for NVIDIA GB200/GB300-class servers and Google TPU systems. Revenue from computing center products reached RMB 10.417 million in 2025, up 203.7% year-on-year.

In the low-altitude economy and robotics fields: The company's ultra-fine wires excel in high tensile strength and bend resistance, widely used in drone flight control, image transmission, and tendon-driven transmission architectures (tendon ropes, dexterous hands) for humanoid robots. According to a Frost & Sullivan report, Tongya Technology ranked first globally in revenue from ultra-fine cable conductors in low-altitude economy applications in 2025.

Currently, the company has established four production bases in Machong and Wanjiang, Dongguan; Yingtan, Jiangxi; and Thailand. In 2025, available equipment operating hours reached 15.8 million, with capacity utilization nearing an extreme 93.2%, necessitating capacity expansion and overseas construction through this IPO.

High Customer Concentration: In 2023, 2024, and 2025, revenue from Tongya Technology's top five customers accounted for 63.6%, 54.0%, and 51.0%, respectively, with the largest customer contributing 35.1%, 17.3%, and 15.8% of revenue.

AI Capital Bureau Perspective: A Technologically Resilient 'Hidden Champion'

In summary, as a financial media outlet, we can clearly define Tongya Technology as a “technologically resilient hard tech hidden champion with extremely frontier industrial positioning.”

It possesses keen industrial insight, successfully breaking out from traditional consumer electronics and RF copper wires to capture the explosive growth opportunities in AI computing center high-speed copper cables and low-altitude economy drones and robot tendon ropes. It demonstrates strong core equipment self-development capabilities and import substitution strength, building a wide “micron-level” technological moat in the ultra-fine metallic connection materials sector. This hardcore strength is the underlying logic for established capital players like Matrix Partners China and Hidden Hill Fund to stand by it.

If the IPO proceeds smoothly, the company hopes to use the raised funds to quickly establish raw material hedging mechanisms, leverage the international location advantages of its Thai production base to enter high-margin direct-sales markets in Europe and the Americas, and gradually build a globalized, risk-resistant supply chain; transforming its micron-level “technological moat” into a tangible “cash flow artery.”

AI Capital Bureau is a professional observation and analysis platform focusing on capital market dynamics in the artificial intelligence sector. We closely track capital operations such as financing, listings, and mergers and acquisitions of AI and embodied intelligence-related enterprises, deeply analyze industry and enterprise development trends, and provide valuable insights for industry participants. We are committed to becoming a bridge connecting AI innovation and capital markets, helping Chinese hard tech companies achieve value discovery and growth.

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