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With the continuous rise in demand for high-performance precision metal connecting wires in the global technology industry, a leading company in a niche field from Guangdong, China is accelerating its move towards the international capital market. Guangdong Tongya Technology Co., Ltd. (hereinafter referred to as "Tongya Technology") recently submitted an application for listing on the Hong Kong Stock Exchange, intending to list on the main board in Hong Kong with Orient International as the exclusive sponsor. It is understood that Tongya Technology focuses on the research, development, production, and sales of precision cable conductors and precision metal wire ropes. Its ultra-fine cable conductor products have accounted for 15.5% of the global market share by revenue in 2025, ranking third globally and first in China. This Chinese company, which has been focusing on precision cable conductors for over sixteen years, what are the odds of success for its foray into the Hong Kong Stock Exchange? Let's first look at its fundamentals. From precision wires to AI computing power Since its establishment in 2010, Tongya Technology has been deeply involved in the field of high-performance precision metal connecting wires, with its product line typically ranging from 0.008mm to 0.5mm, covering three categories: conventional, ultra-fine, and super ultra-fine. Among these, the ultra-fine products with a diameter of less than 0.03mm are the company's core business with the highest technological barrier. According to the prospectus, the company is one of the few in the world that has mastered the technology for mass-producing ultra-fine cable conductors at the 0.008mm level. This capability enables it to meet the stringent requirements for miniaturization and lightweight of smart terminal devices, while also providing key components for cutting-edge applications such as high-end medical devices, low-altitude economic drones, Siasun Robot & Automation tendon rope drive systems, and high-speed copper cables for artificial intelligence data centers. In terms of revenue structure, precision cable conductors have been the main products contributing to 95.9%, 95.8%, and 93.1% of total revenue in 2023, 2024, and 2025, respectively. It is worth noting that the company started producing precision metal wire ropes in 2023, including tendons for surgical Siasun Robot & Automation and humanoid Siasun Robot & Automation, and medical guide wires, which are currently in the capacity climbing stage. Although this business accounted for only 0.4% of total revenue in 2025, its growth potential is closely related to the commercialization process of the Siasun Robot & Automation industry. In terms of application scenarios, the smart terminal field contributed approximately 55% to 56% of the company's revenue in the past three years, while precision medical equipment has remained stable between 28% and 33%. The revenue shares of emerging areas such as low-altitude economic drones and Siasun Robot & Automation, as well as computing centers, were only 5.7% and 3.4% in 2025 respectively, but their growth rates were significant. It is understood that the revenue from low-altitude economic drones and Siasun Robot & Automation business increased from 7.1 million yuan in 2023 to 17.38 million yuan in 2025, while the computing center business more than doubled in 2025, reaching 10.42 million yuan, reflecting the rapid release of demand for high-speed copper cable conductors in the construction of artificial intelligence infrastructure. Structural concerns behind growth In terms of revenue performance, Tongya Technology has achieved rapid expansion during the reporting period. Revenue increased from 172 million yuan in 2023 to 303 million yuan in 2025, with a compound annual growth rate of 32.8%; during the same period, net profit increased from 31.96 million yuan to 47.10 million yuan, with a compound annual growth rate of 21.4%. Excluding non-cash items such as share-based payments and IPO expenses, adjusted net profit further increased from 32.38 million yuan to 51.05 million yuan, and the compound annual growth rate increased to 25.6%. The gross profit margin was 29.4% in 2023 and 30.4% in 2024, but dropped to 25.1% in 2025. The main reason was the significant increase in market prices for raw materials such as copper, silver, and tin in that year, and some products priced under fixed contracts could not fully pass on the cost fluctuations to customers in a timely manner. This reflects the company's high sensitivity to raw material prices in terms of profitability. It is noted that direct material costs accounted for 82.6%, 78.2%, and 78.1% of sales costs in 2023, 2024, and 2025, respectively, with copper being the most significant factor. To address this risk, the company expanded the application scope of dynamic pricing models in the second half of 2025, which means determining product prices by referencing the current market prices of relevant raw materials plus predetermined processing fees at the time of placing an order, allowing cost fluctuations of raw materials to be more immediately reflected in revenue. However, whether this adjustment can fully offset the impact of future price fluctuations remains to be tested by the market. Furthermore, although the concentration of customers has shown a decreasing trend year by year, the absolute level is still not low. In 2023, 2024, and 2025, the top five customers accounted for 63.6%, 54.0%, and 51.0% of total revenue, with the largest customer representing 35.1%, 17.3%, and 15.8%, respectively. While this dependence structure has improved somewhat, fluctuations in the orders from any major customer could still significantly impact the company's performance. At the same time, the company's dependence on upstream suppliers is also relatively concentrated, with the proportion of purchases from the top five suppliers accounting for 57.3%, 55.9%, and 55.8% of total purchases during the same period, with the largest supplier accounting for approximately 18% to 20%. This dual concentration feature may compress the company's bargaining power and profit margin in the event of supply chain disruptions or intensifying price bargaining upstream or downstream. Rapid expansion of the global super-fine market According to a Frost & Sullivan report, the global market for super-fine cable conductors is experiencing explosive growth. The market size has increased from $36.3 million in 2019 to $89.8 million in 2025, with a compound annual growth rate of 16.3%. It is estimated to reach $400 million by 2030 and further increase to $2.3 billion by 2035, with compound annual growth rates of 36.9% from 2025 to 2030 and 44.9% from 2030 to 2035. This growth is primarily driven by the continuous demand for miniaturization and high-reliability connection solutions in industries such as smart terminals, high-end medical devices, low-altitude economics, and new energy vehicles. For example, each pair of smart glasses typically requires 6 to 12 super-fine cable conductors, and with the rapid increase in shipments of AR/VR devices, this sub-sector alone could generate demand for approximately 400 million to 800 million conductors by 2030. In terms of competitive landscape, the global market for super-fine cable conductors exhibits a highly concentrated oligopoly. Based on revenue in 2025, the top three players collectively hold about 79.5% of the market share, with the top-ranked company accounting for 47% and the second-ranked company accounting for 17%, while Tongya Technology ranks third globally and first in China with a 15.5% share. This situation indicates a high technological barrier in this race track - not only does it require mastery of complex processes such as precision drawing, electroplating, and twisting, but also needs independent development of core production equipment to achieve scale production and cost control. It is worth mentioning that the number of equipment purchases required for producing super-fine cable conductors is much higher than that for fine products, and it requires long-term accumulation of process knowledge and "artisan-type" technical talents, making it difficult for new entrants to break through in the short term. Overall, Tongya Technology is in a race track with high growth potential and high technological barriers, and has established a leading position in the niche field of super-fine cable conductors. This is the core investment highlight for the company. However, the growth quality concerns revealed in its financial performance - such as sensitivity to raw material costs and high customer concentration - cannot be ignored. Against the backdrop of the increasingly rational valuation of the manufacturing industry in the Hong Kong stock market, whether Tongya Technology can win the market's trust with stable profitability and clear execution capabilities, let us continue to pay attention.