Xuguang Electronics plans to raise no more than 1 billion yuan, with nearly 40% of the funds allocated to high-voltage vacuum arc extinguishing chambers, seizing the opportunity in power grid expansion

Xuguang Electronics (SH600353, stock price 18.35 RMB, market value 15.23 billion RMB) disclosed a private placement plan on the evening of February 3. The company intends to issue shares to no more than 35 specific investors, raising a total of no more than 1 billion RMB, for projects including capacity expansion of high-voltage (72.5kV and above) vacuum circuit breakers, plasma heating high-power emitter tubes, gyrotrons, and transient energy management switches, as well as for working capital supplementation.

According to the announcement, the proposed private placement has been unanimously approved by Xuguang Electronics’ 11th Board of Directors at the meeting held on the same day, but it still requires approval from the shareholders’ meeting, submission to the Shanghai Stock Exchange for review, and approval from the China Securities Regulatory Commission before implementation. Additionally, the proportion of Xuguang Electronics股份 controlled by Zhang Jian and others will decrease, but he remains the actual controller of the listed company. Therefore, this private placement will not lead to a change in the company’s control.

The announcement also states that as of the date of this plan’s announcement, the specific investors for this issuance have not yet been determined, so it is not possible to confirm whether this issuance constitutes a related-party transaction.

Main Use of Funds: Capacity Expansion of High-Voltage Vacuum Circuit Breakers

The “Daily Economic News” reporter noted that the behind-the-scenes driver for Xuguang Electronics’ expansion is driven by increased investment in the power grid and environmental protection substitution. The announcement shows that on January 15, 2026, State Grid announced that during the 14th Five-Year Plan, fixed asset investment is expected to reach 4 trillion RMB, a 40% increase over the 14th Five-Year Plan, which will promote the development of the upstream and downstream of the industry chain. Furthermore, the company revealed in the announcement that its independently developed 252kV environmentally friendly vacuum circuit breaker and vacuum circuit breaker have passed type tests, making Xuguang Electronics the second company in the world to successfully develop vacuum circuit breakers of this voltage level.

According to Xuguang Electronics’ announcement, the purpose of this private placement includes breaking through capacity bottlenecks, accelerating the localization of high-voltage vacuum circuit breakers, seizing frontier opportunities, and accelerating the industrialization of technological achievements.

The announcement indicates that the number of shares issued to specific investors will be determined by dividing the total amount of funds raised by the issuance price, and will not exceed 30% of the company’s total share capital before this issuance, i.e., no more than approximately 249 million shares (including this number). The shares issued in this round cannot be transferred within 6 months from the date of issuance.

According to the private placement plan, Xuguang Electronics will raise no more than 1 billion RMB (including this amount) through this issuance to be used entirely for capacity expansion of high-voltage (72.5kV and above) vacuum circuit breakers, plasma heating high-power emitter tubes, gyrotrons, and transient energy management switches, as well as for working capital supplementation and industrialization projects.

Among these, the capacity expansion project for high-voltage (72.5kV and above) vacuum circuit breakers is the main project funded by this private placement, with a total investment of about 559 million RMB. It is planned to use 370 million RMB of the raised funds (37% of the total funds raised).

Image Source: Xuguang Electronics Announcement; the company has conducted two private placements after listing

The announcement shows that the construction site for the capacity expansion of high-voltage (72.5kV and above) vacuum circuit breakers is located in Chengdu, with a construction period of three years. The project aims to achieve large-scale production of high-voltage vacuum circuit breakers by renovating existing facilities, purchasing advanced manufacturing equipment, R&D and testing equipment, and other supporting facilities.

The construction sites for the plasma heating high-power emitter tubes, gyrotrons, and transient energy management switches are also located in Chengdu, with a construction period of 2–4 years. The project will involve renovating existing facilities, purchasing advanced production, R&D, and testing equipment, and other supporting facilities to accelerate the industrialization of fast control switches, achieve large-scale production of plasma heating high-power emitter tubes and transient energy management switches, and deepen research and development and industrialization of gyrotrons.

Additionally, Xuguang Electronics plans to use 300 million RMB of the raised funds to supplement working capital, to meet the capital needs brought by continuous business growth and improve the company’s financial structure.

Regarding the impact of this private placement on the company’s business, Xuguang Electronics states: “Through the implementation of the projects funded by this fundraising, the profitability of the main business will be further enhanced, the scale will be further expanded, and market competitiveness will be further demonstrated.”

However, this private placement still faces multiple uncertainties, including approval risks (shareholders’ approval, Shanghai Stock Exchange review, etc.), issuance risks, and dilution of immediate returns risks.

Founded in 1994, Xuguang Electronics was listed on the Shanghai Stock Exchange Main Board in 2002. Data shows that the company’s A-shares raised 234 million RMB in its initial public offering, and then in April 2011 and September 2022, the company completed two additional private placements raising approximately 313 million RMB and 550 million RMB respectively. In other words, since its initial public offering, Xuguang Electronics has raised nearly 1.1 billion RMB through three rounds of direct financing.

If this private placement of no more than 1 billion RMB proceeds smoothly, it will be the third private placement since the company’s A-share listing.