Hengong Precision Equipment Co.,Ltd. (301261.SZ), listed for three years, is preparing another 810 million yuan financing move. The first was its IPO on July 10, 2023, when it debuted on the ChiNext board at 36.9 yuan per share, raising a total of 810.79 million yuan as a fresh face in the capital market.
On September 16, 2026, the company unveiled a convertible bond proposal to raise no more than 810 million yuan, marking its first refinancing since listing. The same fundraising amount, but a different situation: the core business gross margin has slipped from 25.63% at the time of listing to 21.48%, and in the first half of the year, over 70% of profits were propped up by paper gains from an industrial fund. This time, the largest portion of the funds, 350 million yuan, is earmarked for a business the company only began exploring two years ago: manufacturing humanoid robot bodies.
A factory long dedicated to producing rotors for air compressors and metal components for hydraulic systems is pivoting to robot manufacturing, separated not just by technology but also by unspent funds from the previous fundraising project. Two other points merit attention: the 810 million yuan raise nearly hits the regulatory ceiling, and the cash supporting this transformation is precisely what the company lacks most right now.
An At-Cap Refinancing Plan: Dual-Track Investment in Old and New Businesses
On September 16, the board of Hengong Precision Equipment Co.,Ltd. unanimously approved the full issuance package. The plan still needs to pass through a temporary shareholder meeting on October 9, Shenzhen Stock Exchange review, and CSRC registration approval before it can take effect. Under regulatory rules, cumulative bond balances after convertible bond issuance must not exceed 50% of the latest net assets at period-end. At the end of June 2026, the company's attributable net assets stood at 1.636 billion yuan, making 810 million yuan exactly 49.5% of that figure. In other words, this financing is nearly at the regulatory cap.
The terms are standard: each bond has a face value of 100 yuan, issued at par, with a six-year term, annual interest payments, and principal plus final-year interest repaid at maturity. The conversion period runs from six months after issuance completion to maturity. The initial conversion price is set no lower than the higher of the 20-day average trading price or the prior day's average before the announcement date, with the company simulating a price of 56.86 yuan per share based on September 16, while the closing price that day was 53.94 yuan.
What truly determines the quality of this instrument is three price clauses. For downward revision: if the closing price falls below 85% of the current conversion price for at least 15 trading days out of 30, the board can propose a revision plan. For forced redemption: if the stock price reaches 130% of the conversion price or unconverted balance falls below 30 million yuan, the company has the right to redeem at face value plus accrued interest. For put-back: during the last two interest-bearing years, if the stock price trades below 70% of the conversion price for 30 consecutive trading days, holders can sell bonds back to the company at face value plus accrued interest. No guarantee is provided for this issuance.
This design spreads risk onto the stock price, which has been under pressure this year, down about 35% year-to-date as of September 17. If prices stay depressed long-term, downward revision triggers first, followed by put-back, which requires cash payment. The funds are split across five projects with total investment of 946 million yuan, with the 136 million yuan difference to be self-funded. The largest is a 350 million yuan embodied intelligent robot body manufacturing project at the Hengyuan Zhiqi Industrial Base in Tianqiao, Jinan. Second is a 278 million yuan high-end equipment components expansion project adding capacity at the Handan plant. Another 54.99 million yuan goes to a high-end component new materials expansion project in Changshu, and 50 million yuan to an embodied intelligent robot pilot base and Shanghai R&D center, with the latter explicitly stated as not directly generating economic returns. The remaining 76.89 million yuan supplements working capital.
The overall approach is two-pronged: about 400 million yuan for the new track and roughly 333 million yuan back into the core precision machining and continuous cast iron capacity. But these projects are still in early stages, with three of the four physical projects planned to lease third-party sites, and filing and environmental assessment procedures still underway. The feasibility report only states "good economic benefits" for the three physical projects without providing production revenue, internal rate of return, or payback period metrics for calculation.
Business Logic Behind Fundraising: Robot Transition Needs Capital Support
The core business of Hengong Precision Equipment Co.,Ltd. is manufacturing parts for industrial equipment makers: horizontal continuous cast iron components and precision machined parts, specifically rotors for air compressors and vacuum pumps and hydraulic system components. Its client list includes Atlas Copco, Bosch Rexroth, Danfoss, and Haitian Group. This business has stable customer relationships, but the challenge lies in limited pricing power. Scale has grown in recent years, yet profitability has declined. Revenue climbed from 883 million yuan in 2023 to 1.101 billion yuan in 2025, but gross margin fell from 25.63% to 21.48% in the first half of 2026. Operating costs grew 43.18% year-on-year in the first half, outpacing the 37.37% revenue growth. Inventory impairment pressure persists, with asset impairment losses of 63.08 million yuan in 2025, mostly write-downs, and another 38.38 million yuan accrued in the first half of 2026, eating up 33.1% of total profits for the half-year period.
Yet the income statement for the same period looks quite strong: revenue of 724 million yuan, up 37.37% year-on-year; attributable net profit of 104 million yuan, up 57.03%; and non-GAAP profit growth even higher at 82.35%. The answer lies elsewhere in the financials: investment income of 88.75 million yuan in the first half, accounting for 76.55% of total profits, with 88.24 million yuan coming from equity-method recognition of the Qingdao Anpeng Embodied Intelligent Vehicle Fund. Strip that out, and the core business generated only 27.19 million yuan in total profits for the half. Looking further into this fund reveals the origin of the company's robot story. The fund invests not elsewhere but in embodied intelligent companies like Zhiyuan Innovation, Galaxy General, and Pasini Perception. To break into a completely unfamiliar industry, first deploying money as financial investment is a low-cost way to gain track awareness.
The robot strategy of Hengong Precision Equipment Co.,Ltd. started from here, advancing in three steps. The first step came in March 2024: co-establishing the Qingdao Anpeng Embodied Intelligent Vehicle Fund with BAIC Capital and others, with the company subscribing 60 million yuan for a 60% stake, indirectly holding shares in Zhiyuan Innovation, Galaxy General, and Pasini Perception—essentially buying a ticket with financial investment in exchange for track knowledge. The second step was in November 2025: wholly-owned subsidiary Hengong Weichuang partnered with Zhiyuan Innovation (Shanghai) Technology Co., Ltd., an affiliate of Zhiyuan Robotics, to establish Hengyuan Zhiqi, holding 90% and 10% respectively. Hengong contributes precision manufacturing and cost control capabilities, while Zhiyuan provides body technology, algorithms, and brand. The third step came in 2026: the Jinan Tianqiao industrial base opened in April with a public goal of shipping over 20,000 units cumulatively within three years; in July, the fourth workshop in Handan was converted into a complete machine production line with annual capacity of about 1,000 units; and seven new subsidiaries were added in the first half, extending reach to Singapore and Thailand.
Revenue is already materializing. In the first half of 2026, robot key components, complete machine manufacturing, and scenario deployment generated revenue of 79.38 million yuan, accounting for 10.97% of total revenue, up 745% year-on-year, with a gross margin of 26.79%, notably higher than the 21.48% overall margin. But the company has acknowledged its shortcomings, with the feasibility report stating verbatim: "In the core technology aspects of embodied intelligent robot body R&D, further investment in research and development is still required." Another layer of uncertainty lies in the equity structure: Zhiyuan Innovation holds only 10% of Hengyuan Zhiqi, making this collaboration more of a convenient capacity arrangement for Zhiyuan Innovation than a deep partnership.
So the transition requires capital, and cash is precisely the tightest constraint for Hengong Precision Equipment Co.,Ltd. right now. Since listing, cumulative attributable net profit is approximately 389 million yuan, but cumulative operating cash flow over the same period is negative 3.86 million yuan, with a net outflow of 59.64 million yuan in the first half of 2026. Cash is tied up in two places: notes receivable and accounts receivable plus receivables financing total nearly 600 million yuan, equivalent to 82% of half-year revenue; and inventory stands at 286 million yuan. Liabilities are also rising: short-term borrowings have rebounded to 428 million yuan, interest-bearing debt is about 567 million yuan, while monetary funds plus trading financial assets total only 281 million yuan, leaving a gap of about 147 million yuan. With one side needing to spend heavily on transformation and the other facing operating cash flow pressure, the combination of both is the driver behind issuing convertible bonds.
Reviewing the IPO Investment Scorecard: Audit Focus Amid Project Divergence
In July 2023, Hengong Precision Equipment Co.,Ltd. listed on the ChiNext board, raising total proceeds of 811 million yuan, with net proceeds of 721 million yuan after issuance costs. As of the end of June 2026, 664 million yuan of this had been used, representing 92.1% of the net amount, nearly fully deployed, with 66.44 million yuan of unspent funds including 65 million yuan in unmatured wealth management products. Heavy usage does not equal good usage; breaking it down reveals three distinct outcomes. First, the fluid equipment core components expansion project invested 162 million yuan, generating cumulative benefits of 39.38 million yuan, exceeding the committed 24.08 million yuan. Second, the largest investment, the fluid equipment components manufacturing project, tells a different story: actual investment of 358 million yuan, concluded in June 2025, with capacity utilization at 72.57% and cumulative benefits of negative 28.56 million yuan against a commitment of positive 29.06 million yuan. The company attributes this to equipment and team still in the磨合 phase, with human-machine collaboration efficiency below design levels. Third, the most striking case: the technology R&D center, committed at 63.41 million yuan, received only 75,000 yuan in actual investment, with completion at 0.12%.
This scorecard will likely become a mandatory question during review. Following refinancing review practices, the actual benefits, changes, and conclusions of previous fundraising projects are all subject to scrutiny. The R&D center item is particularly unavoidable: this time, 50 million yuan is planned for an embodied intelligent robot pilot base and R&D center in Shanghai, requiring an explanation for why the previous similar project was not implemented. Market attention on this robot capital expenditure focuses mainly on three areas. First, implementation conditions: three physical projects rely on leased sites, filing and environmental assessment procedures are pending, and benefit calculations lack quantitative indicators. The Jinan base claims shipping over 20,000 units within three years, while the existing Handan line has annual capacity of about 1,000 units—the gap between them is not factory space but orders. When asked at the earnings call whether Q3 orders were growing, the company responded with "please refer to periodic reports." Second, financial flexibility: the 810 million yuan sits against the 50% red line, with total investment exceeding by 136 million yuan requiring self-funding, leaving no buffer, while the company continues paying dividends. Third, the other side of the convertible bond: full conversion would dilute share capital by about 6.75%; if the stock price remains depressed long-term and put-back triggers in the final two years, the company would face redemption pressure of up to 810 million yuan in principal.
But the other side of the facts must also be put on the table. The robot business's high growth and high margins are real; the expansion of the core business is not entirely trend-chasing, as the company states its continuous casting line capacity utilization remains high and has constrained its ability to take large orders. The Jinan base is a tripartite collaboration among Hengong, Zhiyuan, and local state capital. The choice of instrument is not aggressive either: if the convertible bonds convert smoothly, the debt-to-asset ratio would fall rather than rise, fitting the current cash situation better than pure debt financing. This convertible bond issuance is essentially using six-year long-term capital to complete the transformation from a fluid equipment component maker to an embodied intelligent player spanning materials, components, complete machines, and scenarios. Fundraising is only the first step; the real test lies in subsequent order fulfillment, technology synergy realization, and whether the new business can truly generate positive operating cash flow. The temporary shareholder meeting on October 9 will vote on this issuance plan, and the subsequent exchange inquiry and registration process will be the first major examination of this cross-border transformation.