The explosive growth of the optical module business has propelled Suzhou Dongshan Precision Manufacturing Co., Ltd. (ASX: 002384) to a qualitative leap in performance, with third-quarter net profit surging more than fourfold year-on-year, while net profit for the first three quarters also grew more than threefold compared to the same period last year. Meanwhile, the company completed its H-share listing in Hong Kong during the reporting period, further accelerating its capital market activities.
Suzhou Dongshan Precision Manufacturing Co., Ltd. announced that its 2026 third-quarter operating revenue reached 17.582 billion yuan, up 73.81% year-on-year; net profit attributable to shareholders of the listed company was 2.332 billion yuan, up 401.18% year-on-year; and non-GAAP net profit was 2.099 billion yuan, up 406.69% year-on-year. On a quarter-on-quarter basis, third-quarter operating revenue rose 19.93%, net profit attributable to shareholders increased 26.26%, and non-GAAP net profit grew 47.82%.
For the first three quarters of 2026, operating revenue was 45.379 billion yuan, up 67.63% year-on-year; net profit attributable to shareholders of the listed company was 5.289 billion yuan, up 332.34% year-on-year; and non-GAAP net profit was 4.579 billion yuan, up 327.48% year-on-year.
The strong growth in performance was primarily driven by the newly added optical module business following the consolidation of Source Photonics, combined with steady improvements in the company's traditional business segments. During the reporting period, fair value change gains reached 778 million yuan, a substantial increase from the same period last year, also contributing positively to net profit. At the same time, financial expenses surged more than tenfold year-on-year to 824 million yuan, with rapidly rising financing costs becoming a potential pressure that cannot be ignored beneath the earnings growth.
Dual Drivers of Optical Modules and AI PCB Propel Rapid Revenue Expansion
The significant jump in Suzhou Dongshan Precision Manufacturing Co., Ltd.'s revenue this period was primarily driven by the explosive growth of its optical module business. In explaining the reasons for changes in financial data, the company explicitly stated that the reporting period saw the addition of Source Photonics and GMD Group into the consolidation scope compared to the same period last year, the optical module business achieved explosive growth, and the company maintained stable growth in its traditional businesses.
Total operating revenue for the first three quarters reached 45.379 billion yuan, an increase of approximately 18.3 billion yuan from 27.071 billion yuan in the same period last year. Meanwhile, operating costs were 35.721 billion yuan, up 53.06% year-on-year. Revenue growth significantly outpaced cost growth, driving a notable improvement in overall profitability.
R&D investment also increased accordingly. R&D expenses for the first three quarters reached 1.365 billion yuan, up 47.05% year-on-year. The company stated it will continue to increase R&D efforts around next-generation high-speed optical chips, optical modules, and AI PCBs. The period-end balance of construction in progress grew 133.04% from the beginning of the year to 5.467 billion yuan, while other non-current assets rose 85.46%, both pointing to sustained large-scale capital investment in optical module and AI PCB capacity expansion projects.
M&A Expansion Drives Up Financing Scale, Tenfold Increase in Financial Expenses Draws Attention
Along with strategic acquisitions and capacity expansion, Suzhou Dongshan Precision Manufacturing Co., Ltd.'s debt scale expanded rapidly in tandem, with financial cost pressures rising significantly.
Financial expenses for the first three quarters reached 824 million yuan, up more than 1,034% year-on-year. The company explained that this was mainly due to the strategic acquisitions of Source Photonics and GMD Group, active capacity expansion in the optical module and AI PCB product areas, an enlarged financing scale that increased financial interest expenses, and increased exchange losses from currency fluctuations during the period.
On the balance sheet side, as of the end of September 2026, short-term borrowings grew 44.92% from the beginning of the year to 11.610 billion yuan, long-term borrowings rose 71.09% to 10.907 billion yuan, and accounts payable increased 31.66% to 17.173 billion yuan. Total assets grew 25.62% from the beginning of the year to 75.686 billion yuan, while total liabilities reached 49.227 billion yuan, an increase of approximately 10.7 billion yuan from 38.549 billion yuan at the beginning of the year.
Regarding inventory, the period-end balance reached 12.367 billion yuan, up 38.50% from the beginning of the year, mainly due to increased stockpiling driven by Source Photonics' sales growth. In addition, exchange rate fluctuations also had a notable impact on the financial statements. The period-end balance of other comprehensive income turned to -688 million yuan, further deteriorating from -241 million yuan at the beginning of the year, primarily due to changes in foreign currency translation differences.
Successful H-Share Listing on Hong Kong Stock Exchange Broadens Financing Channels
During the reporting period, Suzhou Dongshan Precision Manufacturing Co., Ltd. completed its H-share listing in Hong Kong, opening a new overseas financing channel for the company.
According to the announcement, on October 26, 2026, the company determined the final offering price of its H-shares at HK$86.80 per share. On October 28, with approval from the Hong Kong Stock Exchange, the company's 113,783,200 H-shares (before exercise of the over-allotment option) were listed and commenced trading on the Main Board of the Hong Kong Stock Exchange, with the Chinese stock short name "东山精密" and the English short name "DSBJ."
Prior to this, the company obtained a filing notice for overseas issuance and listing from the China Securities Regulatory Commission in September 2026, and passed the listing committee hearing of the Hong Kong Stock Exchange on October 8. The H-share listing helps the company further broaden its financing channels while accelerating the expansion of its optical module and AI PCB businesses, alleviating funding pressure from continuously rising capital expenditures.
Cash Flow Remains Positive, Operating Stability Provides Support
Despite large-scale cash outflows from investing and financing activities, the company's operating cash flow remained positive, providing some fundamental support.
Net cash flow from operating activities for the first three quarters was 3.515 billion yuan, up 19.32% year-on-year, indicating that the core business's cash generation capability remains solid. The period-end balance of cash and cash equivalents was 6.325 billion yuan, slightly up from 6.105 billion yuan at the beginning of the period. The company stated this was due to proactively strengthening cash reserves to meet expanding working capital needs.
On the investing side, capital expenditures expanded significantly in the first three quarters, with expenditures on the purchase and construction of fixed assets, intangible assets, and other long-term assets alone reaching 8.818 billion yuan, more than 1.6 times the 3.378 billion yuan in the same period last year, resulting in a net cash outflow from investing activities of 9.084 billion yuan. Net cash inflow from financing activities was 6.061 billion yuan, providing part of the funding for investment expenditures. Overall, the company is currently in a high-speed expansion cycle, and the scale of capital expenditure and financing needs will remain elevated for a considerable period.
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