Dongshan Precision: The AI Ascent of a Small Workshop

What price did Dongshan Precision pay to gain Apple’s entry ticket? The price was 'serving a sovereign is like serving a tiger.' To cut costs, Apple continuously pressures suppliers to lower prices. Dongshan Precision’s revenue surged from RMB 20 billion to RMB 30 billion, yet the gross margin of its PCB business plummeted from over 20% in earlier years to around 15%. Revenue rose while profits shrank—a classic case of 'revenue growth without profit growth.' Even more painful was the massive capital investment required to upgrade production lines annually to keep pace with Apple’s product iterations. When market demand softened, these rigid expenditures turned directly into profit-eating black holes. Data from 2024 shows that over 80% of Dongshan Precision’s revenue comes from overseas markets, with an extremely high concentration on a single core U.S. customer. This heavy dependence leaves the company virtually powerless in negotiations amid geopolitical risks. Meanwhile, the company’s large-scale investments—starting around 2018—in LED fine-pitch displays and touch panels have become bleeding wounds. Across the industry, frenzied capacity expansion triggered a brutal LED price war, driving prices down to levels where products were sold at a loss—dragging down annual profits by hundreds of millions of yuan. Touch panels, too, have been marginalized by the rise of OLED technology, becoming little more than a token line item in financial reports. The first half of 2024 marked the peak of this pain: revenue continued growing, yet net profit declined year-on-year by 32%. Investors delivered a biting verdict: a 'bloated' company—large in revenue, exhausting in effort, earning only sweat-equity profits. 'Acquired scale without underlying core technologies is like a skyscraper built without steel reinforcement—imposing in appearance, but collapsing at the first tremor.' The Third High-Stakes Bet: Optical Chips In 2025, Dongshan Precision made its third all-or-nothing decision—acquiring full control of Source Photonics. The previous two acquisitions targeted 'boards'—printed circuit boards and other circuit boards. This time, however, it acquired something entirely different: light. Source Photonics manufactures optical modules—the critical components enabling data transmission between AI servers. Crucially, Source Photonics is no ordinary assembly plant—it possesses in-house R&D capabilities for optical chips (EML). Just as an engine powers a car, an optical chip powers an optical module. Without optical chips, you’re merely a parts-assembler workshop; with them, you become a true technology player. In October 2025, Source Photonics was formally consolidated into Dongshan Precision’s financial statements. Its 2025 annual report revealed an optical module gross margin of 36.74%—far exceeding Dongshan Precision’s traditional PCB business margin of approximately 15%. One sells boards; the other sells light. Board margins stand at 15%; light margins reach 37%. Anyone can do that math. In the same year, Dongshan Precision also successfully integrated the overseas automotive business of French GMD Group—acquired earlier—and secured entry into the supply chains of top European automakers including Volkswagen and Stellantis. Through bundled supply of 'precision structural components + automotive FPCs,' the company’s per-vehicle value at Tesla reached an all-time high. Also in 2025, the company decisively divested its persistently loss-making LED business—performing radical surgery to save itself. 'In 2016, it bet on boards; in 2018, it doubled down on boards; in 2025, it bet on light. Three bets—each costlier than the last, each more precise than the prior.'

Behind the Surge in ST Stocks: Speculation Outweighs Investment Value

As stocks subject to other risk warnings or delisting risk warnings (collectively referred to as ST stocks), their overall market capitalizations tend to be relatively small. Statistics show that among the current 118 ST stocks, the average market cap stands at RMB 3.624 billion; 81 of them have market caps below RMB 3 billion, while companies such as ST Meiquan, ST Bushen, ST Shentian, and *ST Yuebo all have market caps under RMB 1 billion. In terms of industry distribution, ST stocks span multiple sectors—including pharmaceuticals and biotechnology, telecommunications, social services, commerce and retail, agriculture, forestry, animal husbandry and fishery, construction and decoration, computer science, textile and apparel, electronics, and power equipment. Weng Zichi, Senior Investment Advisor at Jufeng Investment Consulting, analyzed: 'Market speculation in ST stocks is driven primarily by two factors. First, recent market liquidity has been scarce, and the relatively small size of the ST sector makes it an attractive refuge for speculative capital. Second, issues surrounding margin trading and quantitative funds have recently dominated headlines; since ST stocks are excluded from margin financing and short-selling, and are largely ignored by quantitative funds, they have become prime targets for short-term speculative plays.' Wave of Restructurings Looming for ST Stocks Long-term investment value remains unobvious Compared with non-ST stocks, ST stocks face stronger demands for restructuring and asset reorganization. A closer look reveals that many of the ST stocks exhibiting strong recent gains are precisely those undergoing or preparing for restructuring or asset reorganization. According to incomplete statistics, leading gainers such as *ST Xifa, ST Zhouji, *ST Rongtai, *ST Zhongjie, and *ST Fanhai all feature active restructuring or related developments. Since September, *ST Xifa has surged nearly 60%. The company recently issued a stock trading volatility notice and risk alert, stating it is currently in a pre-restructuring phase, with uncertainty remaining over whether formal restructuring proceedings will commence. ST Zhouji recently disclosed that a court has ruled to accept its restructuring application and appointed a bankruptcy administrator. Other ST companies have announced acquisition-related developments. For example, ST Tongpu has seen its share price surge with multiple consecutive daily trading limits since September. According to its published acquisition report, the acquirer sees promising future prospects for the listed company and intends to increase its stake through this acquisition. *ST Zhongqi recently released a draft report on its asset sale and absorption merger transaction. Additionally, numerous ST companies have recently announced share repurchase or share增持 plans. For instance, *ST Fanhai announced in its public filing that its controlling shareholder plans to acquire shares via centralized bidding on the secondary market over a four-month period starting from September 5, 2023 (inclusive), with a planned purchase amount ranging from RMB 100 million to RMB 200 million.

Activist Starboard Value Builds Stake in Solstice, Says Report

Oct 19, 2026

Starboard Value built a stake in Solstice Advanced Materials, pushing for cost cuts and a focus on core refrigerants and nuclear operations after a $14.5 billion merger collapsed. Shares fell 32% since June as the firm seeks share price improvements.

bloomberg

2026-08-27

Solstice, Element Terminate $14.5 Billion Merger Deal After Shareholder Feedback

2026-08-28

Solstice and Element Solutions Terminate $14.5 Billion Acquisition Agreement

2026-08-28

Solstice, Element Terminate $14.5B Acquisition

2026-09-01

Business Watch: Solstice, Element cancel deal; FDA approves daraxonrasib for pancreatic cancer

2026-10-19

Activist Starboard Value Builds Stake in Solstice, Says Report