New Stock Interpretation | From A-share Star to"A+H" Dual Platform: Zhongji Innolight's Globalization Ambition

Driven by the global artificial intelligence (AI) wave, data centers are undergoing unprecedented transformation. With the explosive growth of large language models and generative AI applications, the scale and complexity of computing clusters are exponentially increasing, leading to a new height in demand for high-speed, low-latency data transmission. In this arms race for computing power, optical interconnect technology, as the "neural network" connecting core devices such as servers and switches, is becoming increasingly prominent. Zhongji Innolight Co., Ltd. (hereinafter referred to as "Zhongji Innolight") is the global leader in this critical track. According to data from Choise Insight, the company has been the world's largest revenue-scale optical interconnect solution provider for five consecutive years since 2021. This company, with outstanding performance in the A-share market, officially launched its IPO process on the Main Board of the Hong Kong Stock Exchange today, with the stock code 03308, and is expected to be listed on the Main Board of the Hong Kong Exchange on July 30th. The IPO plans to globally issue 54,500,000 shares at a price range of HK$1010 per share, with an expected total fundraising amount of approximately HK$54.513 billion. Explosive revenue growth, financial data interpreting the AI dividend Zhongji Innolight's core business is to provide high-speed optical interconnect solutions to leading cloud service providers and AI computing solution providers around the world, with its main product being optical modules. The company has established a strong moat in an industry with extremely rapid technological advancements based on its three core operational principles of "fast market introduction, fast mass production, fast cost reduction." The company was the first to launch the world's first 400G, 800G, and 1.6T optical modules, all of which were mass-produced and shipped about half a year ahead of its closest competitors, making it the preferred partner for the majority of global top-tier customers. This technological leadership translates directly into impressive financial performance. The prospectus data shows that the company's revenue has achieved exponential growth in recent years. In 2023, the company's total revenue was RMB 10.718 billion; by 2024, this number had doubled to RMB 23.862 billion; and by 2025, revenue further surged to RMB 38.240 billion. In the first quarter of 2026, revenue reached RMB 19.496 billion, a growth of over 190% compared to the same period in 2025, which was RMB 6.674 billion. In terms of profitability, the company has also performed outstandingly. Gross profit increased from RMB 3.384 billion in 2023 to RMB 15.876 billion in 2025. What is more eye-catching is its profit level, with net profits for the year of 2023, 2024, and 2025 at RMB 2.208 billion, RMB 5.372 billion, and RMB 11.580 billion respectively. In the first quarter of 2026, the company achieved a net profit of RMB 6.317 billion, indicating a continuous strengthening of profitability. Adjusted net profit margin has steadily increased from 22.1% in 2023 to 31.0% in 2025, and reached 33.9% in the first quarter of 2026, showing that while expanding its scale, the company is also continuously optimizing cost control and operational efficiency. From the revenue structure perspective, high-speed optical modules (400G and above) are the absolute performance engines. In 2025, revenue from high-speed optical modules accounted for 89.2% of the company's total revenue, and by the first quarter of 2026, this proportion had increased to 94.6%. This clearly indicates that the company's growth is primarily driven by the strong demand for high-end products such as 800G and 1.6T in AI infrastructure. Facing the trillion-dollar market, opportunities and challenges coexist In view, Zhongji Innolight's rise is closely tied to the structural growth of the global optical interconnect market. According to Choise Insight forecasts, the global optical interconnect market size is expected to increase from $24.8 billion in 2025 to $111 billion in 2030, with a compound annual growth rate of 31.6% from 2026 to 2030. This growth is mainly driven by the surge in demand in the industry, particularly in AI data centers. The proliferation of AI training and inference workloads has directly led to explosive demand for high-speed optical modules such as 800G and 1.6T. In this high-growth track, Zhongji Innolight has established a significant competitive advantage. In 2025, the company's share in the global optical interconnect solution market reached 21.2%, and in the higher barrier-to-entry high-speed data communications optical interconnect solution market, its share was as high as 28.1%. The company is not only a leader in market size but also a leader in technology. In the field of Silicon Photonics (SiPh) widely considered as the mainstream technology of the next generation, Zhongji Innolight is also a global leader, ranking as the world's largest provider of Silicon Photonics optical modules in terms of revenue in 2025. Within the three months ended March 31, 2026, about 70% of its high-speed product series revenue came from products using Silicon Photonics technology. What is worth noting is that in new standards such as XPO and Open CPX established at the 2026 OFC (Optical Fiber Communications Conference), Zhongji Innolight is a founding member. This indicates that Chinese companies have begun to participate in the formulation of industry rules, moving from mere product manufacturers to industry game changers. However, behind the glory lie hidden risks. The first and foremost is the risk of customer concentration. From 2023 to 2025, revenue from the top five customers collectively accounted for over 75%, indicating a very high reliance on a few global tech giants. Any fluctuations in the demand of major customers or changes in cooperation relationships could have a significant impact on the company's business performance. Secondly, geopolitical and international trade policies are another major uncertainty. From 2023 to 2025, revenue from the United States accounted for 75.9%, 60.5%, and 57.3% respectively, showing a deep tie to top U.S. cloud service providers. However, tensions in trade relations between the U.S. and China, tariff policies, export control measures (such as the U.S. Department of Commerce's Entity List), as well as the U.S. Department of Defense's "List of Chinese Military Companies," could have adverse effects on the company's supply chain, market access, and reputation. Although the company emphasizes that its products are for civilian commercial purposes, and being listed in the "List of Chinese Military Companies" itself does not constitute economic sanctions, it undoubtedly adds complexity to future operations. Moreover, the optical interconnect industry is characterized by rapid technological iterations, short product lifecycles, and intense competition. The company must continue to invest significant amounts in R&D to maintain its technological edge. From 2023 to 2025, the company's R&D expenses were RMB 739 million, RMB 1.244 billion, and RMB 1.615 billion respectively. Although the proportion of R&D expenses to revenue has decreased due to rapid revenue growth, the absolute investment remains huge. If there is misjudgment in future technology roadmap or if R&D progress is slower than expected, its market position could be challenged. For Zhongji Innolight, this H-share listing is not only a fundraising effort but also a key step in its internationalization strategy. By establishing an "A+H" dual financing platform, the company can better connect with global capital and support capacity expansion in regions such as Southeast Asia. The company currently has five major production bases globally, with an annualized optical module production capacity of 39.6 million units in the first quarter of 2026, and an overseas capacity utilization rate reaching 87.3%. The H-share listing will further strengthen its global delivery capabilities to meet the diversified regional supply chain needs of top customers in North America. Looking ahead, the evolution of AI from "training" to "inference" and "intelligent agents" will bring new growth opportunities for the optical interconnect industry. As AI applications evolve from question-answering tools to autonomous digital companions, the global token call volume has increased from 30 trillion at the end of 2023 to 100 trillion in 2025, with an expected 800 trillion by 2030. Each token generation and transmission requires real-time response from computing clusters, and also implies a deep penetration of optical modules from "scale-out" to "scale-up." In this high-growth track, Zhongji Innolight, with its early advantages and customer stickiness, is expected to continue leading. But facing an increasingly challenging competitive landscape and potential disruption to its overseas business due to geopolitical issues, how to maintain its early advantages and meet growth expectations continuously is the core issue that the market is most concerned about regarding Zhongji Innolight's long-term value. At the trillion-dollar market value threshold, market expectations for this leading company are no longer limited to current performance realization but also extend to the imagination of the next-generation optical interconnection technology blueprint.