HENGHUI Technology Corporation Limited

HENGHUI Technology Corporation Limited, established in December 2017, is an integrated circuit enterprise listed on the ChiNext board of the Shenzhen Stock Exchange. The company specializes in research and development, production, sales, and packaging testing services for chip packaging materials. Recognized as a National High-tech Enterprise and a leader in its field, HENGHUI focuses on providing innovative solutions in the electronics manufacturing sector. The company's primary business lines include smart card production, etched leadframes, and Internet of Things (IoT) eSIM chip packaging and testing. HENGHUI's smart card business integrates key packaging materials with module packaging and testing services, leveraging its advanced technology and strong customer relationships. The company has invested significantly in developing core technologies for etched leadframes and IoT eSIM chip packaging, achieving mass production capabilities. With a commitment to independent R&D and a robust technological foundation, HENGHUI aims to maintain its competitive edge in the integrated circuit packaging materials market.

The Company is a leading integrated circuit enterprise in China, specializing in the R&D, production, sales, and packaging testing services for chip packaging materials. (1) Smart Card Business The Company’s advantages in the smart card business are primarily reflected in its integrated business model that combines key packaging materials with packaging and testing services, core technology advantages, high-quality customer resources, and stable, mature process technologies. The specific advantages are as follows: ① Business model that integrates key packaging materials and packaging and testing services.In the smart card business, the Company not only provides flexible leadframe products to customers but also offers smart card module packaging and testing services using self-produced flexible leadframes. This satisfies the diverse needs of different customers. Additionally, the integrated business model ensures a low-cost, high-quality supply of key packaging materials and enhances the delivery capability of products. It also boosts the profitability of the smart card module packaging business. The company’s integrated operation model reduces external dependencies in R&D and manufacturing, achieving independence and control. In terms of product quality, it enables the Company to quickly adjust and optimize upstream production processes and technical parameters based on downstream product requirements. This ensures excellent product quality and allows efficient production organization, reducing production cycles and meeting customer deadlines. ② Core Technology Advantages The production of flexible leadframes involves complex processes, including exposure, development, etching, electroplating, and coating, with many steps requiring chemical treatments. Due to the high technical barrier, only a few companies worldwide have mastered these core technologies and can provide stable mass production. Through continuous R&D and technical accumulation, the Company has mastered high-precision metal surface patterning technology and metal surface treatment technologies required for smart card flexible leadframe production, which provide a strong competitive advantage for its products. ③ High-Quality Customer Resources With its excellent product quality and strong technological innovation capabilities, the Company has accumulated a strong market reputation, gaining recognition from many top-tier customers and establishing long-term partnerships with them. This contributes significantly to the company's sustainable long-term development.. The Company has established long-term relationships with several well-known security chip design manufacturers and domestic and international smart card manufacturers. Its products are widely used in telecommunications, finance, transportation, and identity recognition field. ④ Process Technology Advantages The Company insists on independent R&D and continuous technological and process innovations, developing core technologies and processes that match its business needs. These include punching, copper lamination, baking curing, pre-treatment, dry film lamination, exposure, developing, etching, electroplating, slitting, and AVI processes. For example, the Company has independently developed selective electroplating technology. This technique allows for “zoned” selective electroplating, where only the functional areas of the product are electroplated with target thickness, while the non-functional areas (especially precious metal coatings) are shielded, thus achieving performance requirements while reducing production costs. (2) Etched Leadframe and IoT eSIM Chip Packaging Business In the areas of etched leadframes and IoT eSIM chip packaging, the Company’s main advantages include a high starting point, rapid development, and core technological strengths: ① High Starting Point and Rapid Development The etched leadframe and IoT eSIM chip packaging businesses are extensions of the Company's original business. For instance, etched leadframes are evolved from flexible leadframe technology, and the two processes share many similarities in key procedures and core technologies. Additionally, the packaging of IoT eSIM chips is similar to the packaging of mobile SIM chips used in smart cards, with overlapping customer bases. Given the Company’s mature experience in flexible leadframe and smart card module business, accumulated over several years, the Company has a high starting point for the development of etched leadframes and IoT eSIM chip packaging. In the IoT eSIM chip packaging field, the Company has successfully mastered several core technologies and, leveraging its advantages in the traditional SIM card packaging market and self-produced etched leadframes, has established a specialized workshop for IoT eSIM chip packaging. The Company has introduced new products and services such as QFN/DFN packaging and MP2 packaging, which are gradually becoming new revenue growth points. ② Core Technology Advantages The Company has independently developed core technologies such as roll-to-roll mask-less laser direct-write exposure, roll-to-roll continuous etching, and high-precision selective electroplating. These technologies are effectively applied in the production process, significantly improving product quality and production efficiency. （3）Industry Development and Opportunities for the Company The integrated circuit packaging and testing industry is a key sub-sector of the integrated circuit industry, which is strongly supported by the national government. Emerging technologies and fields such as 5G and artificial intelligence are continually driving demand in the integrated circuit market, which in turn boosts the overall demand for packaging materials and services. In the future,as the domestic substitution trend progresses and the self-sufficiency rate of integrated circuits improves, new development opportunities will emerge for China’s integrated circuit packaging industry. The Company is positioned in the integrated circuit packaging materials market, where domestic demand is high, opportunities for domestic substitution are significant, and technological barriers are high. Although the Company started later , it has already mastered relevant core technologies and holds competitive advantages. The Company will seize the opportunity presented by China’s intensified focus on developing the IC industry, aiming to explore products and markets with broader prospects and attract top global talent. Through relentless efforts, the Company is expected to become a well-known integrated circuit materials enterprise both domestically and internationally, deepen cooperation with domestic and foreign suppliers, increase the domestic sourcing of raw materials, and strive to become an industry leader, contributing to the growth of China’s integrated circuit industry.