Hi Sun Technology (China) Limited Announces RMB1 Billion Asset-Backed Securities Scheme

Hi Sun Technology (China) Limited (Stock Code: 818) has made a voluntary announcement regarding a significant corporate development: the issuance of asset-backed securities (ABS) through its subsidiary, Ronghui Zhida Factoring. This move is aimed at strengthening the Group’s financial position and expanding its fundraising channels.

Key Highlights of the ABS Scheme

• Approval and Structure: Ronghui Zhida Factoring has approved the Ronghui Zhida-Xingyue No. 2 Credit Supply Chain Financial Asset-backed Special Scheme (the “ABS Scheme”) for the issuance of asset-backed securities in the People’s Republic of China (PRC). The ABS are backed by creditor’s rights under specified loan trusts.
• Maximum Issue Size: The Shanghai Stock Exchange has issued a no-objection letter permitting a maximum issue size of RMB1,000,000,000. The ABS can be issued in multiple tranches within 24 months from approval, up until 30 July 2027.
• Phase 1 Launch: On 12 March 2026, the first phase of the ABS Scheme was established with a total issue size of RMB150,000,000.
• Tranche Details:
  • Priority Tranche: RMB142,000,000, rated AAA^sf by an independent credit rating agency, with an expected maturity date of 26 February 2027 and a coupon rate of 2.2%.
  • Subordinated Tranche: RMB8,000,000, unrated, with an expected maturity date of 26 February 2027. Coupon rate not specified.
• Trading: The priority tranche will be traded on the Shanghai Stock Exchange and is issued to qualified institutional investors in the PRC. The subordinated tranche is issued to Ronghui Zhida Factoring or its designated affiliates.

Implications for Shareholders

• Use of Proceeds: The funds raised through the ABS issuance will be used as general working capital for the Group’s fintech services business segment. This is intended to support operating activities and investments, and improve the Company’s financing structure.
• Financial Impact: The Board states that the issuance will not cause any material adverse financial impact on the Group, nor will it negatively affect the interests of shareholders.
• Fundraising Channels: The ABS Scheme is expected to widen the Group’s access to low-cost capital, potentially boosting future growth and profitability.
• Risk Management: If any underlying assets become ineligible for inclusion during the ABS Scheme’s term, Ronghui Zhida Factoring is required to redeem such assets, thereby managing risk exposure.
• Credit Ratings: The AAA^sf rating for the priority tranche is for information purposes only and does not constitute a recommendation for investment.
• Board Composition: The Board consists of five executive directors and three independent non-executive directors, reflecting a diverse leadership team.

Potential Price Sensitivity

While the Board believes the ABS issuance is not price-sensitive, investors should note its potential to:

• Strengthen the Group’s capital structure and enhance liquidity
• Support continued growth in fintech services, a key business segment
• Attract new institutional investors through the priority tranche traded on the Shanghai Stock Exchange

However, shareholders and potential investors are advised to exercise caution and not rely solely on this announcement for investment decisions.

Full Definitions and Parties Involved

• Company: Hi Sun Technology (China) Limited, Bermuda-incorporated, listed on HKEX
• Ronghui Zhida Factoring: Beijing Ronghui Zhida Commercial Factoring Co., Ltd., a wholly owned subsidiary of Jiexing Digital
• Jiexing Digital: Beijing Jiexing Digital Technology Co., Ltd., 80.04% owned subsidiary of the Company
• ABS: Asset-backed securities issued under the ABS Scheme
• PRC: People’s Republic of China, excluding Hong Kong, Macau, and Taiwan for this announcement

Investor Considerations

Investors should monitor the progress of additional tranches under the ABS Scheme up to RMB1 billion by July 2027. The successful launch of the first phase, with a strong credit rating and competitive coupon rate, may signal increased institutional confidence in the Group’s financial stability and could influence future share price movements. However, the Board emphasizes that there is no material adverse impact on the Group’s finances or shareholder interests from this issuance.

Disclaimer

This article is for informational purposes only and does not constitute investment advice or a recommendation to buy, sell, or hold any securities. Shareholders and potential investors should exercise caution and consult their own professional or financial advisors before making any investment decisions.

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