Interpretation of IPOs | From A-share Stars to “A+H” Dual Platforms: Zhongji Xuchuang (03308)'s Global Ambition

Driven by the global wave of artificial intelligence (AI), data centers are undergoing unprecedented transformation. With the explosive growth of big language models and generative AI applications, the scale and complexity of computing clusters have increased exponentially, and the demand for high-speed, low-latency data transmission has reached new heights. In this arms race for computing power, optical interconnection technology is becoming more and more prominent as a “neural network” connecting core devices such as servers and switches.

Zhongji Xuchuang Co., Ltd. (hereinafter referred to as “Zhongji Xuchuang”) is the global leader in this key circuit. According to Insight Consulting's data, the company has been the world's most profitable optical interconnect solution provider for five consecutive years since 2021. This company, which has performed well in the A-share market, officially launched the listing process on the main board of the Hong Kong Stock Exchange today. The stock code is 03308, and it is expected to be listed on the main board of the Hong Kong Stock Exchange on July 30. The current IPO plans to sell 54,500,000 shares globally. The sale price range is HK$1,010 per share, and the total amount of capital raised is about HK$54.513 billion.

Explosive growth in performance, financial data explains AI dividends

Zhongji Xuchuang's core business is to provide high-speed optical interconnection solutions for the world's leading cloud service providers and AI computing solution providers. Its main products are optical modules. With the three core operating principles of “rapid launch, rapid mass production, and rapid cost reduction”, the company has established a deep moat in an industry with extremely rapid technological iteration. The company pioneered the launch of 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 their closest peers, making them the preferred partner for most leading customers around the world.

This technological leadership translates directly into impressive financial results. According to prospectus data, the company's revenue has grown by leaps and bounds in the past few years. In 2023, the company's total revenue was RMB 10.718 billion (RMB, same below); in 2024, this figure doubled to RMB 23.862 billion; by 2025, revenue had further soared to RMB 38.240 billion. Entering 2026, the growth momentum is still strong. Revenue for the first quarter alone reached 19.496 billion yuan, compared with 6.674 billion yuan in the same period in 2025, an increase of more than 190% over the previous year.

The company also excelled in terms of profitability. Gross profit increased from 3.384 billion yuan in 2023 to 15.876 billion yuan in 2025. What is even more impressive is its profit level. The profit for the period 2023, 2024, and 2025 was 2,208 billion yuan, 5.372 billion yuan, and 11.58 billion yuan, respectively. In the first quarter of 2026, the company achieved profit of 6.317 billion yuan during the period, and its profitability continued to increase. The adjusted net profit margin also increased steadily from 22.1% in 2023 to 31.0% in 2025, and reached 33.9% in the first quarter of 2026, showing that while the company's scale is expanding, cost control and operational efficiency are also being continuously optimized.

In terms of revenue composition, high-speed optical modules (400G and above) are an absolute performance engine. In 2025, high-speed optical module revenue accounted for 89.2% of the company's total revenue, and by the first quarter of 2026, this ratio had increased to 94.6%. This clearly shows that the company's growth is mainly driven by strong AI infrastructure demand for high-end products such as 800G and 1.6T.

In the face of a trillion dollar market, opportunities and challenges coexist

According to the Zhitong Finance App, the rise of Zhongji Xuchuang is inseparable from the structural growth of the global optical interconnection market. According to Insight Consulting's forecast, the global optical interconnection market will grow from US$24.8 billion in 2025 to US$111 billion in 2030, with a compound annual growth rate of 31.6% from 2026 to 2030. This growth is mainly driven by a surge in demand in the digital communications sector, particularly AI data centers. The popularity of AI training and inference workloads has directly spawned explosive demand for high-speed optical modules such as 800G and 1.6T.

In this rapidly growing racetrack, Zhongji Xuchuang has established a significant leading edge. In 2025, the company's share of the global optical interconnection solutions market reached 21.2%, and in the high-speed digital optical interconnect solutions market with higher technical barriers, its share was as high as 28.1%. The company is not only a leader in market size, but also a leader in technology routes. In the field of silicon light (SiPh), which is widely regarded as the next mainstream technology, Zhongji Innochuang is also a global leader. In terms of revenue, it will be the world's largest supplier of silicon optical modules in 2025. In the three months ending March 31, 2026, products using silicon light technology already accounted for about 70% of the revenue of its high-speed product line.

What is more noteworthy is that in new standards such as XPO and Open CPX established by the 2026 OFC (Optical Fiber Communications Conference), Zhongji Xuchuang is a founding member. This shows that Chinese companies have begun to participate in the formulation of the rules of the industry's game as simple product manufacturers.

However, there are also risks hidden behind the scenery. First and foremost is the risk of customer concentration. From 2023 to 2025, the company's five major customers all accounted for more than 75% of total revenue, and its dependence on a few global tech giants was extremely high. Fluctuations in demand or changes in partnerships with any major customer may have a significant impact on the company's operating results.

Second, geopolitics and international trade policy are another major uncertainty. From 2023 to 2025, revenue from the US accounted for 75.9%, 60.5%, and 57.3%, respectively, showing the company's deep ties with leading US cloud service providers. However, trade tensions between China and the US, tariff policies, export control measures (such as the US Department of Commerce's list of entities), and the US Department of Defense's “list of Chinese military enterprises” may adversely affect the company's supply chain, market access, and reputation. Although the company emphasizes that its products are commercial technology for civilian use, and being included in the “List of Chinese Military-Related Enterprises” does not in itself constitute economic sanctions, this has undoubtedly increased the complexity of future operations.

Furthermore, the optical interconnection industry is rapidly iterating on technology, short product lifecycles, and extremely competitive. The company must continue to invest heavily in R&D to maintain technological leadership. From 2023 to 2025, the company's R&D expenses were 739 million yuan, 1,244 million yuan and 1,615 million yuan respectively. Although the share of revenue declined due to rapid revenue growth, the investment was definitely huge. If future technology routes are misjudged or R&D progress falls short of expectations, its market position may be challenged.

For Zhongji Xuchuang, this H-share listing is not only to raise capital, but also a key step in its internationalization strategy. By building an “A+H” dual financing platform, the company can better connect with global capital and support capacity expansion in Southeast Asia and other places. At present, the company has five major production bases around the world. The annual production capacity of optical modules reached 39.6 million in the first quarter of 2026, of which the overseas production capacity utilization rate was as high as 87.3%. The H-share listing will further strengthen its global delivery capabilities to meet the needs of leading North American customers for geographical diversification of the supply chain.

Looking forward to the future, the evolution of AI from “training” to “inference” and “intelligence” will bring new growth poles to the optical interconnection industry. As AI applications evolve from question-and-answer tools to self-executing digital partners, the number of global token calls has grown from $3 trillion at the end of 2023 to 100 trillion in 2025, and is expected to reach $8,000 trillion by 2030. Every token generation and transmission requires a real-time response from the underlying computing power cluster, which also means that the usage of optical modules will penetrate deeply from “scale-out” (horizontal expansion) to “scale-up” (vertical interconnection).

In this rapidly growing circuit, Zhongji Xuchuang is expected to continue leading the way with its first-mover advantage and customer stickiness. However, in the face of an increasingly severe competitive landscape and potential geopolitical disruptions to overseas business, how to maintain a first-mover advantage and continue to fulfill growth expectations is the core issue that the market is most concerned about the long-term value of Zhongji Xuchuang. At the trillion-dollar market capitalization mark, the market's expectations for this leader are not only limited to the implementation of current performance, but also imagination for the next generation of optical interconnection technology.