HEC Technology responds to query on data center acquisition

Guangdong HEC Technology Holding (HEC) has addressed the Shanghai Stock Exchange's concerns regarding its joint capital increase and acquisition of assets. The company is acquiring a stake in a data center operator, referred to as the "Target Company," which specializes in wholesale IDC services for large internet and cloud service providers. The Target Company's operational data centers boast a total IT capacity of 782MW as of May 31, 2025, with an additional 137MW under construction. It reported an annual revenue of yuan 60.48 bn in 2024, with a net profit of yuan 13.09 bn.

The acquisition price of yuan 28.0 bn for 100% equity in the Target Company was determined based on an appraisal, valuing the Target Company's total shareholder equity at yuan 29.093 bn. This valuation, using the income approach, is supported by a robust financial analysis and compared favorably to market and industry benchmarks. HEC’s liquidity and solvency are robust, with a projected current asset base of yuan 129.43 bn by June 30, 2025, and ample credit lines to cover short-term liabilities and operational needs.

The investment aims to leverage synergies in liquid cooling technology, electronic components, and clean energy to enhance HEC's position as a "green power-hardware-computing power-AI" full-chain digital infrastructure provider. HEC anticipates stable returns and a strengthening of its balance sheet, aligning with its strategic transformation and the national "Eastern Data, Western Computing" initiative.