Fibocom Wireless Inc. Announces Temporary Utilization of Idle H Share Proceeds for Working Capital

Key Highlights

• Fibocom Wireless Inc. (Stock Code: 00638) has resolved to temporarily utilize up to RMB500 million of idle proceeds from its H Share Global Offering to replenish working capital.
• This arrangement is for a period not exceeding 12 months and is in response to a sharp rise in memory chip prices and ongoing supply shortages.
• The funds to be used were originally scheduled for deployment in 2028 and 2029, and the company assures that this will not impact the original use of proceeds or the implementation timetable.

Details of the H Share Global Offering and Proceeds Utilization

Fibocom Wireless Inc. completed a successful H Share Global Offering with its shares listed on the Hong Kong Stock Exchange on 22 October 2025. The gross proceeds raised amounted to approximately HK\$2.90 billion (roughly RMB2.65 billion), with net proceeds after deducting issuance expenses at approximately HK\$2.81 billion (RMB2.56 billion).

As of 31 March 2026, the company had utilized approximately HK\$566.7 million (RMB513.87 million) of the net proceeds. Unutilized proceeds have been placed in short-term, interest-bearing accounts with licensed banks or authorized financial institutions.

Original Allocation of Net Proceeds

• 55% (approx. RMB1.41 billion): Research and development, mainly for AI and robotics-related technology and product development.
• 15% (approx. RMB384 million): Construction of a manufacturing facility in Shenzhen for module and terminal product production.
• 10% (approx. RMB256 million): Repayment of interest-bearing bank borrowings.
• 10% (approx. RMB256 million): Strategic investments and/or acquisitions.
• 10% (approx. RMB256 million): Working capital and other general corporate purposes.

The company planned to use the proceeds between 2025 and 2029, as outlined in its prospectus and implementation timetable.

Current Utilization Status (as of 31 March 2026)

• R&D: RMB59.18 million utilized, RMB1,350.37 million remaining.
• Shenzhen Facility: RMB36.36 million utilized, RMB348.06 million remaining.
• Repayment of Bank Borrowings: RMB155.97 million utilized, RMB100.31 million remaining.
• Strategic Investments/Acquisitions: RMB20 million utilized, RMB236.28 million remaining.
• Working Capital/Other Purposes: RMB242.35 million utilized, RMB13.93 million remaining.

Temporary Reallocation of Proceeds: Key Details for Investors

Why this matters: Due to a sharp increase in memory chip prices and ongoing supply shortages, Fibocom needs to increase inventory levels to ensure stable supply and timely customer deliveries. This operational decision is directly responsive to market conditions and aims to avoid the higher costs and risks associated with external short-term financing.

The Board resolved on 23 April 2026 to temporarily reallocate up to RMB500 million from the idle proceeds (originally scheduled for deployment in 2028 and 2029) to working capital, for up to 12 months. This move is intended to optimize capital allocation, reduce financial costs, and support ongoing business operations.

• The temporary use of funds will not affect the company’s ability to execute its planned projects as scheduled. If any designated project requires funding ahead of schedule, the company will promptly reallocate the necessary funds.
• The company assures that all temporarily utilized funds will be returned to their designated purposes before the expiration of the 12-month period.
• No impact is anticipated on the normal operation of the daily business or on the future implementation timetable for the intended use of proceeds.

Potential Price-Sensitive Information

• This announcement signals proactive financial management in a challenging supply environment, potentially mitigating risks of production delays and avoiding higher financing costs. This could be viewed positively by the market as it demonstrates prudent capital allocation and responsiveness to supply chain risks.
• However, shareholders should monitor for any future changes in the implementation of planned projects if market conditions further deteriorate or if the inventory situation does not improve as expected.
• The company’s commitment to return the funds to their original purposes may reassure investors concerned about the long-term strategic plan and use of IPO proceeds.

Conclusion

Fibocom’s decision to temporarily utilize idle proceeds from its H Share Global Offering for working capital demonstrates sound financial and operational prudence during a period of supply chain uncertainty. This move is unlikely to disrupt the company’s long-term strategic plans and may reduce immediate financial risks, which could be supportive of shareholder value in the near term.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should consider their own circumstances and consult with professional advisors before making any investment decisions. The information herein is based on company disclosures as of 23 April 2026 and may be subject to change without notice.

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