Hongfa Technology redeems convertible bonds early, controlling shareholder stake diluted

Hongfa Technology's controlling shareholder, Youge Venture Capital Co., Ltd., saw its equity stake decrease from 27.67% to 26.94% between November 3, 2020, and November 19, 2025. This 0.73% dilution, caused by large-block trades and an increase in total share capital due to "Hongfa Convertible Bonds" conversion and a capital reserve to share capital increase plan, triggered a 1% threshold disclosure.

The company also announced the early redemption of "Hongfa Convertible Bonds" following a board meeting on November 20, 2025. This was triggered because the company's stock closing price had been at or above 130% of the current conversion price (RMB 22.72/share), reaching RMB 29.536/share, for 15 trading days between October 31, 2025, and November 20, 2025.

The convertible bond's original issue was for 20 million shares at a face value of RMB 100 per share, totaling RMB 2 billion, with a maturity of six years. The initial conversion price was RMB 72.28 per share, which was subsequently adjusted to RMB 22.72 per share due to various equity distributions and a downward revision.