Stock Connect Welcomes a Scarce AI Computing Power Target: The Revaluation Logic of Lightelligence (1879.HK)

On September 7, a new round of adjustments to the Stock Connect program officially took effect, with Lightelligence, which listed on the Hong Kong Stock Exchange in April this year, approved for inclusion.

Inclusion in the Stock Connect does not alter a company's fundamentals, but it does change a critical dynamic: which capital flows are permitted to invest, and which institutions are willing to conduct long-term research on the stock.

For the capital markets, the special significance of Stock Connect inclusion lies in bringing an asset that is extremely scarce in both the A-share and Hong Kong markets before southbound capital—a provider of full-optical, system-level computing power solutions. $XIZHI TECH-P (01879.HK)$

I. Stock Connect Inclusion Brings Threefold Incremental Capital Market Benefits

First is the improvement in liquidity.

Liquidity in the Hong Kong stock market is highly fragmented. Some newly listed tech companies, despite possessing unique technologies and strategic industry positions, may suffer from a liquidity discount due to limited participating capital and insufficient trading activity.

MiniMax's performance provides a clear case study. After being included in the Stock Connect on August 6, MiniMax quickly attracted attention from southbound capital. In August 2026, mainland investors purchased approximately HK$10.6 billion worth of MiniMax shares through the Stock Connect, exceeding the buying volume for both Alibaba and Tencent during the same period. Since its inclusion, MiniMax's share price has cumulatively risen by over 50%.

Stock Connect inclusion offers Lightelligence more than just an additional trading channel; it also brings the potential for improved liquidity discounts and a rediscovery of market value.

Secondly, there is a shift in the investor structure.

Domestic institutional investors, including public mutual funds, private equity funds, and insurance companies, have long tracked domestic GPU, server, optical module, and computing power infrastructure sectors. They have accumulated deep research insights into industrial logics such as domestic super-nodes and "network-compensated computing." Although Lightelligence is listed on the Hong Kong Stock Exchange, its customers, supply chain, and application scenarios are closely tied to China's AI computing infrastructure development.

Inclusion in the Stock Connect program acts as a bridge between the company and this pool of capital that is more familiar with the Chinese market, helping to reduce the information asymmetry regarding its technological positioning and business model among investors.

Thirdly, the scarcity value of the asset is becoming apparent.

Currently, southbound capital can already invest in many internet, semiconductor, and AI hardware companies, but there remains a lack of independent, pure-play listed targets in the Scale-up segment. Lightelligence's inclusion fills this gap.

Stock Connect inclusion allows Lightelligence's existing industrial value to be seen and understood by a broader range of capital.

II. The Scale-out sector is already substantial, while the Scale-up sector still lacks pure-play targets

The optical module companies currently well-known in the capital market primarily benefit from the Scale-out market, which involves connectivity between servers, racks, and data centers. Representative companies such as Zhongji Innolight and Eoptolink have grown into market-leading stocks widely followed by investors, riding the wave of AI data center construction.

Scale-up addresses a different challenge: enabling high-speed connectivity among a large number of computing chips, such as GPUs, within a single super-node. As AI cluster scales expand, computing efficiency is determined not only by the number of chips but also by the speed of data exchange between them. If connection speeds and bandwidth cannot keep pace, even a vast number of chips will struggle to deliver their full performance potential.

There are also significant differences in the development stages of these two markets. As of the close on September 4, the combined market capitalization of only four companies—Zhongji Innolight, Eoptolink, Dongshan Precision, and Accelink Technologies—exceeded RMB 1.9 trillion, whereas Lightelligence's market capitalization on the Hong Kong Stock Exchange was approximately HKD 35 billion. These figures are not intended for a simple valuation comparison between the two types of companies, but they illustrate that the Scale-out sector has already produced a cohort of mature listed companies, while the Scale-up direction still lacks independent listed targets.

Several brokerages had previously assigned Lightelligence a target price exceeding HKD 600, with some even raising their ratings following the release of its recent semi-annual results. This reflects institutional confidence in Lightelligence's future growth potential, as the company gradually meets market expectations alongside its performance growth.

Shenwan Hongyuan pointed out that there is no other listed company in either the A-share or Hong Kong stock markets that simultaneously focuses on optical interconnects and optical computing as core businesses while possessing original chip-level design capabilities. This highlights Lightelligence's uniqueness. Its business model also differs from asset-heavy module assemblers; Lightelligence is an asset-light chip design company, with its value centered on underlying optoelectronic chips, proprietary IP, system architecture, and solution design.

Traditional optical module manufacturers rely primarily on component integration, module assembly, cost control, and scaled delivery. In contrast, Lightelligence builds upon its self-developed optoelectronic chips to provide customers with comprehensive solutions covering hardware components, software management, system design, link adaptation, and deployment. Its core competitiveness lies not in the number of factories or production lines it owns, but in its mastery of underlying chip technology and system architecture.

3. Optical Interconnects Drive Near-Term Growth, While Optical Computing Opens Up Long-Term Potential

Recent growth has been primarily driven by optical interconnects. The company has launched products such as Scale-up EPS and OCS for intra-supernode connectivity and continues to advance the validation and industrialization of NPO and CPO products. In the first half of 2026, the company generated revenue of RMB 79.78 million, a year-on-year increase of 284%; of this, optical interconnect revenue amounted to RMB 60.7 million, accounting for approximately three-quarters of total revenue, making it the current main pillar of commercialization.

Longer-term potential stems from optical computing. Traditional chips rely mainly on electrons for computation, whereas optical computing leverages the physical properties of light to handle certain matrix operations. It is not intended to immediately replace GPUs but rather to work in synergy with them, enhancing computational speed and energy efficiency for suitable tasks.

Lightelligence's PACE2 has been shipping continuously, expanding from low-latency inference scenarios to practical applications in vertical fields such as edge computing. Tape-outs for both the optical and electrical chips of the next-generation PACE3 have been completed, positioning it to further address large model inference and multi-card scaling in the future.

Compared to optical interconnects, optical computing is at an earlier stage of industrialization and has a longer realization cycle. However, if optical computing can gradually expand from specific applications to broader AI inference scenarios, its application boundaries and addressable market are expected to grow accordingly.

These two business lines are not isolated. Lightelligence's expertise in optical interconnects stems from nearly a decade of R&D and refinement in optical computing products, giving it stronger technical barriers and customer collaboration capabilities compared to other market players focused on optical interconnect concepts. As the Scale-up interconnect market becomes more certain, optical interconnects have helped the company gain early entry into the supply chains of GPUs, servers, and computing centers, generating product revenue. Meanwhile, optical computing explores next-generation computing architectures based on the same optoelectronic chip technology and customer ecosystem. The former addresses how the company grows in the near term, while the latter determines how far the company can go in the long run.

IV. Conclusion

For Lightelligence, the core significance of being included in the Stock Connect program can be summarized in three points: improving liquidity, opening access to mainland institutional capital, and allowing this scarce Scale-up target in the Hong Kong market to enter a broader process of value discovery.

The company's fundamentals have not changed due to its inclusion in the Stock Connect; what has changed is the investor base and market pricing dynamics. As southbound capital begins to seek the next category of AI computing assets beyond optical modules, Lightelligence, with its foundation in original optoelectronic chips and system architecture and its dual focus on optical interconnects and optical computing, stands poised for a revaluation.

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