Keboda responds to inquiry letter regarding 1.49 billion yuan convertible bond issuance, focusing on capacity expansion and technological upgrades

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Keboda Technology Co., Ltd. (hereinafter referred to as “Keboda”) recently released an announcement in response to the inquiry letter from the Shanghai Stock Exchange regarding its application documents for issuing convertible corporate bonds to unspecified targets. The company intends to raise no more than 149,074.00 million yuan for several automotive electronics product capacity expansion and research and development IT construction projects.

Funding projects focus on existing mature businesses with generally high capacity utilization rates

According to the response, Keboda’s fundraising projects include “Keboda Intelligent Technology (Anhui) Co., Ltd. Central Vehicle Computing Platform and Intelligent Driving Domain Control Product Capacity Expansion Project,” “Keboda (Anhui) Automotive Electronics Co., Ltd. Base Construction (Phase II) and Automotive Electronics Product Capacity Expansion Project,” “Zhejiang Keboda Industrial Co., Ltd. Automotive Electronics Product Capacity Expansion Project,” “Keboda Technology Co., Ltd. Headquarters Technology R&D and IT Construction Project,” and supplementary working capital.

The company emphasizes that the products involved in this fundraising project are all existing mature products, without product upgrades or new products. During the reporting period, the revenue scale and capacity utilization rates of related products showed steady growth. Among them, the capacity utilization rates of lighting control systems, motor control systems, energy management systems, and automotive electrical and electronic products remained at a high level, reaching 90.84%, 90.28%, 90.32%, and 86.96% respectively from January to September 2025, with capacity bottlenecks gradually emerging. Although the central computing platform and intelligent driving domain control products are in the capacity ramp-up stage, their capacity utilization rate has increased from 30.40% in 2024 to 37.86% from January to September 2025, showing a rapid upward trend.

Domain control project technology sourced independently, already designated by multiple major automakers

Regarding the “domain control project,” Keboda stated that the central computing platform and intelligent driving domain control products involved in this project are the core of the intelligent vehicle “central computing + regional control” architecture, equivalent to the vehicle’s “super brain.” AI technology is mainly applied in this project for environmental perception and decision control by integrating high-performance chips to provide computational support, optimizing underlying software to create a low-latency algorithm operating environment, and building gateways and Ethernet to achieve a full-process data closed loop.

The technological sources of the project products are independently developed by the company. As of December 31, 2025, 165 relevant R&D personnel have been involved, accounting for 54.46% of the total employees of Shanghai Zhike and Anhui Zhike. Currently, the product has already been designated by several mainstream domestic and foreign automakers, including NIO, SAIC General Motors, Volkswagen, and BMW Group, with expected sales ramp-up occurring from September 2024 to July 2027.

Capacity digestion is assured, and the matching degree of new capacity with orders is high

Keboda disclosed in its response that the related products of this fundraising project have received ample customer order support. Among them, the total lifecycle sales of the designated central computing platform and intelligent driving domain control projects amount to approximately 20 billion yuan, while the total lifecycle sales of other automotive electronics designated projects are approximately 23 billion yuan. Sensitivity calculations on peak year sales based on 30% and 40% estimates indicate that the sales revenue from existing designated projects can adequately cover the expected sales scale for the peak production year of this fundraising project.

The production and sales rate of the company’s main products remains at a high level. From January to September 2025, the production and sales rates of the four major product lines—lighting control systems, motor control systems, energy management systems, and automotive electrical and electronic products—each exceeded 100%, while the production and sales rate of the central computing platform and intelligent driving domain control products was 93.68%, indicating strong market demand.

Acquisition of Shanghai Zhike priced fairly, performance commitments are assured

Regarding the acquisition of 60% equity of Shanghai Zhike from related parties, Keboda stated that the transaction price was determined through negotiation based on the evaluation results, set at 34.5 million yuan, which is fair. The seller has promised that the target company will achieve a cumulative net profit of no less than 630 million yuan during the performance commitment period (August-December 2025, 2026-2030). The compensation will be in cash, with a phased payment mechanism linked to the performance commitment period, ensuring effective and reasonable safeguards.

The company also explained that the implementation entity of the domain control project, Anhui Zhike, is a jointly invested company by the issuer’s controlling shareholder, actual controllers, directors, and senior management personnel, which is necessary and reasonable. The decision-making process for related transactions and information disclosure complies with relevant regulations.

Benefit calculations are prudent and reasonable, financing scale matches funding needs

Keboda provided a detailed explanation of the benefit calculations for this fundraising project. The domain control project is expected to generate an annual revenue of 574,270.02 million yuan after reaching production, with a post-tax internal rate of return of 17.11%; the Anhui expansion project is expected to generate an annual revenue of 81,345.89 million yuan after reaching production, with a post-tax internal rate of return of 16.89%; the Zhejiang expansion project is expected to generate an annual revenue of 436,045.49 million yuan after reaching production, with a post-tax internal rate of return of 18.01%. The basis for selecting each parameter is sufficient, with no significant differences compared to the company’s historical data and comparable companies in the industry.

Considering the company’s current cash balance, future cash inflows and outflows, and various capital expenditures, the company estimates a funding gap of approximately 204,254.96 million yuan over the next three years. The proposed fundraising of 149,074.00 million yuan has a reasonable financing scale and can meet the funding needs for the company’s business development.

The risk of continuous decline in gross profit margin is controllable, inventory and accounts receivable management is prudent

In response to the inquiry letter’s concern about the continuous decline in gross profit margin, Keboda explained that it is primarily due to intensified market competition, changes in product structure, rising prices of some raw materials, and adjustments in accounting policies. The company stated that although these factors are expected to have a certain persistent impact on the gross profit margin, the overall risk is controllable, and the company relies on core advantages such as customer resources, technological reserves, product quality, and supply chain management to ensure profitability.

In terms of inventory management, the company’s large inventory balance is reasonable, with inventory over one year accounting for more than 90%, a high order coverage rate, and a write-off ratio exceeding 95% after the period, with sufficient provisions for inventory impairment. The growth of accounts receivable matches revenue growth, with good collection situations for both domestic and foreign businesses, and the bad debt provision policy is prudent, at a reasonable level compared to comparable companies in the industry.

Keboda stated that the funds raised from this issuance will be fully invested in the main business, which is conducive to the company’s capacity expansion, improvement of research and development capabilities, and optimization of product structure, aligning with the company’s long-term development strategy. The company will strictly comply with relevant laws and regulations regarding the use and management of raised funds to ensure the smooth implementation of the projects.

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Editor: Xiaolang News Report