Hitting the right trends twice! New Ease Optoelectronics' market cap surpasses 500 billion, but the actual controller was penalized for illegal share reductions

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On April 10, New Ease Optoelectronics' stock price surged by 6.63%, closing at 522.5 yuan per share, with a market value of 519.37 billion yuan. This surpassed Luzhou Laojiao's market cap record of 480 billion yuan set in February 2021, making it the second-highest valued listed company in Sichuan’s history. It also became the third privately-owned listed company in central and western China to reach a 500-billion-yuan market cap. On April 14, New Ease Optoelectronics closed at 520 yuan per share, maintaining its total market value at 516.9 billion yuan.

Eoptolink has not yet released its 2025 annual report, but according to its forecast, the net profit attributable to shareholders of the listed company in 2025 will be 9.4 billion to 9.9 billion yuan, representing a year-on-year increase of 231.24%-248.86%.

However, beneath the spotlight, penalties for violations by the actual controller and insufficient R&D investment compared to competitors have cast a shadow over Eoptolink's development. Can Eoptolink continue to maintain its rapid business growth?

Betting on 5G commercialization

In the development process of Eoptolink (300502.SZ), it has caught two major industry trends.

In 1998, Gao Guangrong, who had worked at the optical communication branch of Leshan Wireless Factory for nearly a decade, resigned to start his own business. He co-founded Chengdu Guangtong Electronics Co., Ltd., mainly responsible for the agency sales of optical communication products, including fiber optics, cables, and optical modules. In 2002, Gao Guangrong co-founded Chengdu Guangsheng Communication Technology Co., Ltd., starting to independently develop optical communication products.

In 2008, Guangsheng Communication, founded by Gao Guangrong, reached an agreement with its competitor Chengdu Yijielong Technology Co., Ltd., founded by Hu Xuemin. Both parties merged to form Chengdu Eoptolink Technology Co., Ltd.

In February 2016, Eoptolink was listed on the Growth Enterprise Market. According to the prospectus, it is a high-tech enterprise focusing on transmission and access technologies in the field of optical communications, specializing in the research and development and manufacturing of optical modules.

Of the funds raised during the IPO, 260 million yuan was used for the construction of optical module production lines, with a construction period of 1.5 years. The project added 48 optical module production lines in total, including 11 lines for 4.25G optical modules, 30 lines for 10G optical modules, and 7 lines for 40G/100G optical modules. Supporting this were three TOSA production lines, three ROSA production lines, and three BOSA production lines. After completion, the project added an annual production capacity of 2.2953 million optical modules.

These are the foundations for 5G development. In 2019, 5G officially began commercial use domestically. That year, Eoptolink reported revenue of 1.165 billion yuan, a year-on-year increase of 53.28%; net profit attributable to shareholders of the listed company was 213 million yuan, a year-on-year increase of 568.68%.

In the 2019 annual report, Eoptolink stated that its high-speed optical module, 5G-related optical module, and optoelectronic device-related R&D projects achieved multiple breakthroughs, with a significant increase in the proportion of high-speed product sales. The company is one of the few domestic enterprises capable of mass-producing 100G optical modules, 400G optical modules, and mastering high-speed optoelectronic chip packaging and optoelectronic device packaging. It successfully provided samples of the industry's lowest power consumption 400G series optical module products, assisting in the upgrade of ultra-large data centers and cloud networks.

In the following years, Eoptolink's performance continued to grow, but the growth rate slowed significantly. In 2020-2022, Eoptolink's revenues were 1.998 billion yuan, 2.908 billion yuan, and 3.311 billion yuan respectively, representing year-on-year growth of 71.52%, 45.47%, and 13.83%. Net profits attributable to shareholders of the listed company were 492 million yuan, 662 million yuan, and 904 million yuan respectively, representing year-on-year increases of 131.03%, 34.6%, and 36.51%.

In 2023, Eoptolink's performance declined – revenue decreased by 6.43% year-on-year to 3.098 billion yuan; net profit attributable to shareholders of the listed company fell by 23.82% year-on-year to 688 million yuan.

The decline in performance was due to industry changes.LightCounting, a well-known market research firm in the optical communications industry, stated that demand for optical connections began to decline in the second half of 2022, leading to excess inventory across the entire supply chain.Six months ago, the market outlook for 2023 was very bleak. The financial reports of mainstream optical module and device manufacturers at the beginning of 2023 reflected a sharp drop in revenue. The outlook for the second half of 2023 and even 2024 will remain less optimistic.

Riding the AI wave

With the explosive popularity of AI, market demand for optical modules has increased.

According to LightCounting data, the global 800G optical module market size will reach 8.6 billion US dollars in 2024 and will grow to 12 billion US dollars in 2025, a year-on-year increase of 40%. By 2028, the overall market size of 800G and 1.6T optical modules will exceed 32 billion US dollars, with an annual compound growth rate of over 25%.

In the 2024 annual report, Eoptolink stated that the company has successfully launched 800G single-wavelength 200G optical module products. At the same time, its 800G and 400G optical module product portfolio now includes 800G and 400G optical modules based on silicon photonics solutions, 400G ZR/ZR+ coherent optical modules, as well as 800G optical modules based on LPO solutions.

This year, Eoptolink's revenue reached 8.647 billion yuan, a year-on-year increase of 179.15%; net profit attributable to shareholders of the listed company was 2.838 billion yuan, a year-on-year increase of 312.26%.

Entering 2025, Eoptolink has launched a new 1.6T/800G single-wavelength 200G optical module product, becoming one of the few domestic companies with the capability to deliver 100G, 400G, 800G, and 1.6T optical modules in bulk. The company also possesses advanced packaging technology for high-speed optical device chips and optical devices.Huarong Securities noted in a research report that Phase I of Eoptolink's Thailand factory has been operating efficiently since it began operations in the first half of 2023. Phase II officially commenced production at the beginning of 2025, quickly ramping up capacity with a focus on mass production of 1.6T modules. The company is currently in the continuous expansion phase. Progress on the 1.6T product has been smooth, with volume expected to pick up gradually in the second half of 2025.

Eoptolink's ability to rapidly roll out the next generation of optical module products is not only due to its independent R&D but also stems from previous acquisitions. In 2022, Eoptolink acquired Alpine Optoelectronics, a U.S.-based company specializing in silicon photonic modules, coherent optical modules, and silicon photonic chip technology.

Data shows that Alpine is a U.S.-based enterprise focusing on silicon photonic modules, coherent optical modules, and silicon photonic chip technology. Its core team comes from international giants such as Intel and Broadcom, holding over 50 silicon photonics patents. Through the acquisition of Alpine, Eoptolink gained core patents and an R&D team in silicon photonics technology, breaking through key barriers in high-speed optical modules. Additionally, the company established an integrated supply chain covering 'optical device chip manufacturing - optical device chip packaging - optical module manufacturing,' thereby reducing production costs for optical modules.。

During the 2022 earnings briefing, an investor asked, 'Does Alpine, the overseas company acquired by your firm, currently have the production capacity for high-speed optical chips corresponding to 800G optical modules? What percentage of your optical chips are externally sourced, and what proportion is independently developed and produced?'

Eoptolink responded that its overseas subsidiary, Alpine, provides technical support and reliable supply chain assurance in the areas of silicon photonic modules, coherent optical modules, and silicon photonic chip technology. The sourcing of optical chips is internal information and cannot be disclosed publicly.

Eoptolink has also started to explore CPO technology. During the 2025 mid-year earnings briefing, the company stated that it has already made strategic investments in the CPO technology field. When the CPO ecosystem matures in the future, the company is confident about securing a competitive position in CPO-related products. Data indicates that CPO is an integrated technology for optical devices and chip packaging, directly mounting optical components (such as lasers, modulators, and photodetectors) onto chips, enabling closer interconnection and collaboration between optical and electronic components.

According to Eoptolink's 2025 annual earnings forecast, the company expects net profits attributable to shareholders to range between 9.4 billion and 9.9 billion yuan, representing a year-on-year increase of 231.24%-248.86%. The company attributed this growth to continued investment in computing power, which has driven rapid demand for high-speed products, resulting in a significant increase in both sales revenue and net profit compared to the same period last year.

R&D investment falls short of competitors

Amidst strong demand for AI computing power, concerns remain regarding Eoptolink's future prospects.

One aspect is Eoptolink's relatively low R&D investment. From 2022 to 2024, Eoptolink's R&D expenditures were 187 million yuan, 134 million yuan, and 403 million yuan respectively, accounting for 5.66%, 4.32%, and 4.66% of the annual revenue. In the first three quarters of 2025, Eoptolink's R&D expenses reached 501 million yuan, representing 3.04% of its revenue.

In comparison, another giant in the optical module sector, Zhongji Xuchuang, invested 792 million yuan, 809 million yuan, and 1.333 billion yuan in R&D from 2022 to 2024, accounting for 8.22%, 7.55%, and 5.58% of its annual revenue respectively. In 2025, Zhongji Xuchuang's R&D expenditure was 1.676 billion yuan, or 4.38% of its revenue.

Both the scale of Eoptolink’s R&D spending and its proportion of total revenue are lower than those of its competitor, Zhongji Xuchuang. This raises concerns about whether Eoptolink can continue to lead the industry in technological iteration and whether it might fall further behind Zhongji Xuchuang.

Another issue is financial concerns. In the first three quarters of 2025, Eoptolink reported an asset impairment loss of 203 million yuan, an increase of 883.08% year-on-year, mainly due to increased inventory write-downs. As of September 30, 2025, Eoptolink had inventory worth 6.603 billion yuan, a year-on-year increase of 117.79%. The company stated that this was primarily due to revenue growth, with consideration given to current and expected orders and the procurement cycle, resulting in increased stockpiling during the reporting period. However, there are external concerns about potential inventory write-down risks amid already rising inventory levels.

Moreover, major shareholders of Eoptolink have repeatedly reduced their stakes. After listing in 2016, Gao Guangrong (chairman), Hu Xuemin (director), Huang Xiaolei (director and general manager), and Han Yulan became the controlling shareholders and actual controllers of the company. Notably, Han Yulan is Huang Xiaolei’s mother-in-law. Gao Guangrong holds 14.09% of the company’s shares, Hu Xuemin holds 13.31%, Huang Xiaolei holds 7.83%, and Han Yulan holds 3.65%.

In December 2020, Gao Guangrong, Hu Xuemin, Huang Xiaolei, and Han Yulan terminated their concerted action agreement, and the company’s actual controllers and acting-in-concert parties changed to Gao Guangrong and Huang Xiaolei. At that time, Gao Guangrong held 9.98% of the shares, Huang Xiaolei held 7.12%, Hu Xuemin held 8.29%, and Han Yulan held 3.29%. Compared to their shareholdings in 2016, all four individuals had reduced their stakes through sales. By the end of the third quarter of 2025, Gao Guangrong’s stake had decreased to 7.39%, a reduction of 2.59% since December 2020.

Notably, in January 2026, the China Securities Regulatory Commission (CSRC) launched an investigation into Gao Guangrong for suspected violations of restricted stock transfer regulations; in February, he was subject to administrative penalties. For violating restricted stock transfer rules, Gao Guangrong was ordered to rectify his actions, received a warning, had illegal gains of 9.4986 million yuan confiscated, and was fined 20 million yuan. Additionally, for information disclosure violations, he was ordered to rectify, received a warning, and was fined 2 million yuan.

From 5G to AI, seizing two major industry opportunities allowed Eoptolink to become one of the giants in the optical module sector. However, concerns over relatively lower R&D investments, increasing inventory-related impairment risks, and governance issues exposed by repeated reductions and even violations by major shareholders have raised doubts about Eoptolink’s sustainable development in the future. With a market capitalization surpassing 500 billion yuan, Eoptolink will face even more severe challenges ahead.

Author | Wu Ren

Source | Zhengtan Finance (ID: teccj6)

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