Guangdong Hec Technology Holding Co.,Ltd. (600673.SH) held a temporary shareholders' meeting today to review proposals regarding joint capital injection with related parties into a joint venture company for acquiring 100% equity of Qinhuai Data China, among other related transaction matters.
The transaction price for Qinhuai Data China is set at 28 billion yuan. Data shows that Qinhuai Data China generated operating revenue of 6.048 billion yuan in 2024 and 2.608 billion yuan in the first five months of 2025. Among its clients, the largest customer "Customer One" accounted for 80.23% of tax-exclusive sales revenue in 2024, rising to 83.54% in the first five months of 2025.
Regarding market concerns about whether "Customer One" is ByteDance and the impact of this acquisition on operational continuity, the company has provided responses to these questions.
**Is "Customer One" ByteDance?**
Qinhuai Data China primarily operates wholesale IDC business, specifically targeting large internet companies, cloud computing service providers, telecommunications operators, and other large-scale clients. The company provides customized technical solutions and equipment selection for data center services, using data center modules or data center parks as minimum rental units to meet clients' large-scale server hosting needs.
Qinhuai Data China's predecessor belonged to the previously NASDAQ-listed Qinhuai Data (Nasdaq: CD), which later completed privatization and delisting. According to Qinhuai Data's previous annual reports, revenue from ByteDance accounted for 81.7%, 83.2%, and 86.3% respectively from 2020 to 2022.
In 2023, a consortium controlled by Bain Capital acquired 100% equity of Qinhuai Data through privatization. According to public disclosure information, the consortium issued a preliminary non-binding proposal on June 6, 2023, with the privatization covering both Qinhuai Data's domestic Chinese business and its non-Chinese operations.
The current transaction involving Guangdong Hec Technology concerns the acquisition of Qinhuai Data's Chinese operations. In 2024 and the first five months of 2025, Qinhuai Data China recorded operating revenue of 6.048 billion yuan and 2.608 billion yuan respectively, with net profits of 1.309 billion yuan and 745 million yuan. During the same periods, the largest customer was consistently "Customer One," with tax-exclusive sales amounts of 4.852 billion yuan and 2.178 billion yuan respectively, representing approximately 80.23% and 83.54% of revenue.
Regarding whether Qinhuai Data China's largest customer is ByteDance, Guangdong Hec Technology stated that based on confidentiality clauses in commercial cooperation agreements and compliance requirements for listed company information disclosure, specific customer names of Qinhuai Data China constitute confidential information.
Notably, as an important major customer during Qinhuai Data's listing period, ByteDance has begun building its own computing power centers.
Earlier this year, information from the Shanxi Government Service Platform indicated that the construction land planning permit for Phase II of the Volcano Cloud Taihang Computing Power Center project had been approved. Located in Guangling County, the project's construction entity is Volcano Cloud (Datong) Technology Co., Ltd., a subsidiary of ByteDance (Douyin Group), with a total investment of 4.5 billion yuan. The Phase II project covers 307.5 acres and plans to deploy 15,604 12kW server cabinets and 510 network cabinets, with completion expected by May 2026.
Also earlier this year, the Administrative Approval Bureau of Wuhu Area Management Committee of Anhui Free Trade Zone issued a public notice regarding the environmental impact assessment report for the Volcano Engine Yangtze River Delta Computing Power Center project by Wuhu Jiangdong Mingyi Technology Co., Ltd. Wuhu Jiangdong Mingyi Technology Co., Ltd. is a wholly-owned subsidiary of ByteDance. The Volcano Engine Yangtze River Delta Computing Power Center project has a total investment of 8 billion yuan, including components such as Computing Centers 7-1 and 7-2.
Regarding ByteDance's self-built computing power centers, Guangdong Hec Technology stated that the company has noticed recent announcements by some internet companies about plans to build their own computing power centers, which represents normal industry dynamics amid the explosion of AI computing power demand. From the perspective of professional industry division of labor, investment efficiency, and long-term trends, third-party professional service providers and internet companies maintain a complementary and mutually beneficial relationship rather than simple substitution. To reduce risks from high customer concentration, the target company will actively implement multiple measures, including but not limited to: signing long-term cooperation agreements with existing core customers, providing more comprehensive services to enhance customer loyalty; leveraging experience serving existing leading internet companies to actively expand other major internet industry clients; utilizing this transaction opportunity to become a domestically-controlled enterprise and actively expand government and financial sector clients; fully leveraging advantages in forward-looking resource deployment to deeply cultivate advantageous regions.
Regarding the potential impact of ByteDance's self-built computing power centers on suppliers, renowned tax and auditing expert Liu Zhigeng analyzed that the main effects appear in two aspects: short-term performance pressure and business structure adjustment; and deep impact on industry competitive landscape, including transformation pressure on wholesale IDC models and potential risks from technological generation gaps. For specific suppliers, impacts need multi-dimensional assessment: in business cooperation, including short-term demand supplementation, technological collaboration upgrades, and deepened cooperation models; in market competition, including industry standard improvements and market share differentiation; in financial and risk aspects, including revenue stability and investment return cycles.
Liu Zhigeng noted that overall, ByteDance's self-built computing power centers impact suppliers with "short-term pressure, long-term differentiation" characteristics. Companies with stronger technical capabilities and deeper customer cooperation are more likely to achieve win-win outcomes through collaborative innovation.
**Financing Costs in Confidential Stage**
According to the announcement, Guangdong Hec Technology and controlling shareholder Shenzhen Dongyang Optics Industry plan to inject 3.5 billion yuan and 4 billion yuan respectively into Yichang Eastern Data No.1 Investment Co., Ltd. ("Eastern Data No.1"), totaling 7.5 billion yuan in capital injection. After completion, they will hold 46.67% and 53.33% equity respectively in Eastern Data No.1. Subsequently, Eastern Data No.1 will acquire 100% equity of the target company for 28 billion yuan through its wholly-owned subsidiary Yichang Eastern Data No.3 Investment Co., Ltd. ("Eastern Data No.3"). Upon transaction completion, Guangdong Hec Technology will indirectly hold stakes in Qinhuai Data China.
The specific transaction steps are as follows:
First, Guangdong Hec Technology and Shenzhen Dongyang Optics Industry will jointly inject 7.5 billion yuan into Eastern Data No.1. The announcement shows that Eastern Data No.1 commits to further introducing other investors to raise funds for this acquisition, ensuring Guangdong Hec Technology's equity ratio in Eastern Data No.1 does not exceed 30% upon acquisition completion.
According to announcement information, Eastern Data No.1 currently has low registered capital of only 200,000 yuan. With Guangdong Hec Technology's 3.5 billion yuan injection and shareholding not exceeding 30%, if other investors inject at the same price, Eastern Data No.1's total equity fundraising could reach over 11.667 billion yuan, meaning other investors need to inject over 4.167 billion yuan.
Regarding other investors' identities, Guangdong Hec Technology stated in its September 24 reply announcement that it would introduce diversified quality joint investors including state-owned investment funds, insurance capital, and industrial capital.
Notably, media reported on September 11 that the acquisition buyer team includes Yidu State Investment.
However, as of September 29, related announcements from Guangdong Hec Technology have not mentioned Yidu State Investment, and the company has not yet responded to this question as of press time.
Second, Eastern Data No.1 will contribute the aforementioned capital injection to its wholly-owned subsidiary Shanghai Eastern Innovation Future Data Co., Ltd. ("Eastern Innovation Future"). Currently, Eastern Innovation Future has signed a syndicated acquisition loan contract with a banking consortium, and subsequently plans to further contribute relevant loan funds and Eastern Data No.1's investment to its wholly-owned subsidiary Eastern Data No.3.
Regarding the syndicated acquisition loan contract interest rate, Guangdong Hec Technology representatives stated that according to current confidentiality requirements, this interest rate information has not been publicly announced and remains confidential, with further announcements to be made once determined.
A representative from a prominent bank's emerging industries division explained that acquisition loan rates are not fixed across banks and need comprehensive determination considering target asset conditions, market LPR levels, and individual banks' risk reserves. While there are floor rates for acquisition loans, floating margins are not fixed and require negotiation.
Third, Eastern Data No.3 will serve as the final transaction entity to acquire 100% equity of the target company for 28 billion yuan.
From the data perspective, as of June 30, 2025, although Guangdong Hec Technology had monetary funds of 6.416 billion yuan, 2.671 billion yuan was restricted due to guarantee deposits. Additionally, according to Guangdong Hec Technology's September 20 announcement, Shenzhen Dongyang Optics Industry has cumulatively pledged 542 million shares, representing 87.37% of its holdings; Shenzhen Dongyang Optics Industry and its acting-in-concert parties have cumulatively pledged 1.22 billion shares, representing 76.74% of their combined holdings.
Regarding the impact of this acquisition on operational continuity, Guangdong Hec Technology stated that after confirmation with Shenzhen Dongyang Optics Industry, this equity investment proceeds under the premise of fully reserving working capital for production and operations and ensuring timely debt repayment. This investment will not cause significant adverse effects on the controlling shareholder's or listed company's main business operations and operational debt servicing, nor will it significantly impact the controlling shareholder's or listed company's debt servicing stability and operational continuity.
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