Hengwei Technology: Due to negotiations progress, audit assessment status, and other factors, the issuance of shares to purchase assets has been terminated. The plan to proceed with a cash purchase continues to be discussed.

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Reporter from Daily Economic News | Wen Duo Editor from Daily Economic News | Yang Jun

Reporters from Daily Economic News noted that on March 26, after the market closed, Hengwei Technology (SH603496, stock price 28.24 yuan, market value 9.043 billion yuan) announced that it would terminate the previously planned issuance of shares, cash payment for asset acquisition, and fundraising matters.

According to the announcement, the company decided to terminate the original plan for the issuance of shares to purchase assets, but will continue to negotiate with the transaction counterparties on the possibility of purchasing assets in cash. This marks a significant adjustment in the company’s method of acquiring 75% of Shanghai Shuhang Information Technology Co., Ltd. (hereinafter referred to as Shuhang Technology).

Hengwei Technology released the “Issuance of Shares and Payment of Cash for Asset Acquisition and Fundraising Plan” on September 30, 2025. According to this plan, the company intends to acquire 75% of Shuhang Technology’s shares through the issuance of shares and cash payments.

As disclosed, Shuhang Technology has a registered capital of 32.25 million yuan, and its legal representative is Zhang Jisheng. It is an “enterprise full-chain AI (artificial intelligence) application service company that covers everything from basic models to practical applications.”

According to previous announcements, Shuhang Technology’s underlying technology is compatible with various open-source large models on the market, providing customers with multi-model combination service strategies based on different scenarios and needs. Furthermore, many members of Shuhang Technology’s core team have experience working in leading technology companies or have entrepreneurial experience in related fields.

More practically, Shuhang Technology has been consistently profitable in the past two years (2023, 2024, and the first eight months of 2025). For example, the target company’s operating revenue in 2024 is 148 million yuan, with a net profit of 22.5322 million yuan, and in the first eight months of 2025, the operating revenue is 143 million yuan, with a net profit of 17.8655 million yuan.

Moreover, the founder of the target company, as the performance commitment party for this cash acquisition, guarantees that the net profit (the “net profit”) actually achieved by the target company in the fiscal years 2026, 2027, and 2028 (the “performance commitment period”) shall cumulatively not be less than 28.2 million yuan, and the performance assessment will be based on the cumulative net profit achieved in each year of the performance commitment period, with the results of the performance assessment being subject to the “Special Audit Report” issued by an accounting firm commissioned by the listed company that complies with relevant securities law regulations.

According to previously disclosed information, the original transaction plan involved purchasing the total of 75% of Shuhang Technology’s shares from seven counterparties, including Zhang Jisheng, Xie Xinyu, Zhu Linyun, Lu Yuan, Shanghai Hangzhong Enterprise Management Partnership (Limited Partnership), Shanghai Huihang Enterprise Management Partnership (Limited Partnership), and Hangzhou Rongteng No. 2 Venture Capital Partnership (Limited Partnership). According to the original plan, the transaction price would be paid in a combination of shares and cash, where Zhang Jisheng, Xie Xinyu, Zhu Linyun, and Lu Yuan would receive both shares and cash, while the aforementioned three partnerships would only receive shares.

To achieve the acquisition, Hengwei Technology intends to issue shares to raise matching funds from no more than 35 specific investors, with the issue price set at 25.00 yuan/share. The amount of matching funds raised shall not exceed 100% of the asset purchase transaction price, and the number of shares issued shall not exceed 30% of the total share capital of the listed company after the transaction is completed.

The target company appears to have significant value, and Hengwei Technology’s acquisition process has been quite tumultuous.

On September 16, 2025, Hengwei Technology disclosed that the company’s stock would be suspended from trading starting September 17, 2025, with an expected suspension period not exceeding 10 trading days. On September 29, 2025, Hengwei Technology held the tenth meeting of the fourth board of directors, where it reviewed and approved the acquisition-related proposals, resuming trading on September 30, 2025.

On February 28, 2026, Hengwei Technology released a progress announcement regarding the issuance of shares and payment of cash for asset acquisition and fundraising matters, stating that the audit and evaluation work was still being conducted in an orderly manner and had not been completed. The company also indicated that it would not rule out adjustments to the acquisition plan based on changes in the market environment and progress in negotiations with counterparties.

Now, after nearly half a year of planning, Hengwei Technology has decided to terminate the issuance of shares to purchase assets plan but will continue to negotiate for the cash purchase of equity and capital increase to gain control of the target company. However, whether an agreement can be reached and a formal agreement signed remains uncertain.

The reason for this adjustment is related to progress, as the listed company stated that it was made “in light of the current negotiation progress, the pace of audit and evaluation work, and other work circumstances.” The purpose of the adjustment is to “improve transaction efficiency, reduce transaction costs, and better promote the completion of the acquisition.”

Cover image source: Zhu Yu