According to a September 11 disclosure to the Stock Exchange of Hong Kong, Zhejiang Hexia Technology Co., Ltd. (Hexia Technology) has submitted its listing application to the HKEX GEM board, with Bright China Enterprise Finance Limited acting as its sole sponsor. This marks the company's second filing attempt, following its initial submission on February 10.

The company has established itself as an automotive testing solutions provider in Zhejiang Province, collaborating with leading domestic and international automakers and automotive component manufacturers during its track record period. These partnerships include Byd Company Limited (China's largest new energy vehicle manufacturer) and Customer B, one of the world's largest engine manufacturers and a leading power solutions provider. The Chinese automotive testing services market is fiercely competitive with moderate concentration, featuring over 1,500 participants. According to a Frost & Sullivan report, the company held a 0.9% market share among all automotive testing solutions providers in China based on 2025 revenue.

The company's automotive testing solutions comprise three business segments: (i) automotive testing services, (ii) testing facility solutions, and (iii) automotive component sales. As of the latest practicable date, the company operates more than 480 principal testing machines and equipment, primarily utilized for providing automotive testing services.

Financial Highlights

Revenue for the six-month periods ended June 30 in 2024, 2025, and 2026 reached approximately RMB 138 million, RMB 205 million, and RMB 92.858 million, respectively. Gross profit for the same periods stood at approximately RMB 44.628 million, RMB 51.592 million, and RMB 24.406 million, respectively. Net profit for these periods recorded losses of RMB 23.727 million and RMB 19.847 million for 2024 and 2025, respectively, before achieving a profit of RMB 3.613 million in 2026, marking a turnaround to profitability.

Industry Landscape

China's automotive sales expanded from 25.3 million units in 2020 to 34.4 million units in 2025, representing a compound annual growth rate of 6.3%, solidifying its position as the world's largest automotive market. The market recovered during 2021 and 2022 with sales of 26.3 million and 26.9 million units, respectively. This recovery continued into 2023, supported by robust policy measures such as purchase tax exemptions and the rapid rise of new energy vehicles, with sales reaching 30.1 million units and further climbing to a record 31.4 million units in 2024.

Between 2026 and 2030, automotive sales growth is expected to moderate due to the high base effect, with a projected compound annual growth rate of 3.4%, reaching 40.2 million units by 2030. Throughout this decade, new energy vehicles will serve as the primary growth driver. By 2030, China's automotive market is expected to have substantially completed its transition toward new energy vehicle dominance.

New energy vehicle sales in China surged from 1.4 million units in 2020 to 16.6 million units in 2025, achieving a compound annual growth rate of 64.0% during this period. In 2026, NEV sales reached 18.5 million units, with penetration surpassing 52.6% for the first time—a historic milestone marking NEVs overtaking traditional internal combustion engine vehicles. Growth is expected to moderate but remain robust, with sales projected to reach 32.8 million units by 2030, at which point NEVs are anticipated to account for approximately 81.6% of all new vehicles in China. This surging NEV demand is fueled by substantial government subsidies, tax exemptions, trade-in programs, no-quota special license plates in major cities, and mandatory NEV credit systems that effectively push automakers toward electrification.

China's automotive testing services market has demonstrated steady growth, expanding from RMB 14.8 billion in 2020 to RMB 22.9 billion in 2025, representing a compound annual growth rate of 9.1%. This expansion has been driven by increasing vehicle complexity, more stringent safety and emissions regulatory standards, and growing R&D investment in new energy vehicles. Market growth from 2020 to 2021 was notably propelled by an uptick in new model launches within the traditional internal combustion engine segment. Looking forward, the market is expected to continue its growth trajectory, expanding from RMB 25.1 billion in 2026 to RMB 36.3 billion by 2030, with the compound annual growth rate accelerating to 9.7% during the forecast period.

Board Composition

The board currently comprises nine directors in total, including four executive directors, two non-executive directors, and three independent non-executive directors. The board holds general authority over the company's management and operations. In accordance with the articles of association, executive directors, non-executive directors, and independent non-executive directors will retire by rotation and be eligible for re-election at the company's annual general meetings.

Shareholding Structure

As of the latest practicable date, Mr. Xia serves as the general partner of Changxing Lingguan and Changxing Hexia. Consequently, under the Securities and Futures Ordinance, Mr. Xia is deemed to hold interests in the shares held by Changxing Lingguan and Changxing Hexia. The controlling shareholders include (i) Mr. Xia, Mr. He, Mr. Xia Quanhui, Ms. Chen Yan, and Mr. Zhao Bo (collectively the "Concert Party"); (ii) Mr. Xia Zhipeng; (iii) Changxing Lingguan and Changxing Hexia; and (iv) Changxing Junying. As of the latest practicable date, the Concert Party collectively holds approximately 70.1% of the total issued share capital. Additionally, Mr. Xia Zhipeng is Mr. Xia's younger brother and is therefore deemed to be acting in concert with Mr. Xia under the Takeovers Code. As of the latest practicable date, Mr. Xia Zhipeng holds approximately 3.2% of the total issued share capital.

Advisory Team

The sole sponsor is Bright China Enterprise Finance Limited. Legal advisors include Llp, Shanghai Tongli Law Firm. The sole sponsor's and compiler's legal advisors are Cheung & Partners in association with Beijing Tongshang Law Firm, and Beijing Tongshang Law Firm. The auditor and reporting accountant is KPMG. The industry consultant is Frost & Sullivan (Beijing) Consulting Co., Ltd. Shanghai Branch. The compliance advisor is Bright China Enterprise Finance Limited.