The passive buying by ETFs coincides with significant shareholder减持 at Zhongji Innolight. On the evening of November 28, public information revealed that Zhongji Innolight (300308.SZ), a leading optical module manufacturer that recently hit record highs, has been added to the CSI A50 Index, effective after the market close on December 12. However, the company has recently faced large-scale减持 by major shareholders and executives, raising concerns over whether ETFs tracking the CSI A50 Index will be forced to absorb these减持 at elevated prices. Similar doubts arose in late 2021 when CATL (300750.SZ) was included in the CSI 300 Index.
Industry experts note that, fundamentally, the rapid expansion of optical module production raises questions about whether future product prices and earnings can sustain growth. Major shareholders and executives are likely well aware of the company's underlying conditions. Additionally, historical cases suggest that even after high-profile companies are added to major indices, their short-term performance may not necessarily be strong. Long-term prospects depend on whether fundamentals continue to improve and drive stock prices higher.
**ETF Funds vs. Shareholder减持** On November 28, China Securities Index Co. announced adjustments to several index components, including the CSI 300, CSI 500, CSI 1000, CSI A50, CSI A100, and CSI A500. The changes, part of a regular rebalancing, will take effect after December 12’s close. Zhongji Innolight is among four new additions to the CSI A50, alongside Huagong Tech, Guangqi Technology, and Shenghong Tech.
However, Zhongji Innolight is simultaneously facing substantial减持 by major shareholders. On November 24, the company disclosed that Wang Xiaodong, an executive director and senior vice president, had sold 708,600 shares (0.06% of total shares), retaining 2.1677 million shares (0.195%). Earlier, on October 30, Zhongji Innolight reported Q3 revenue of RMB 10.216 billion (up 56.83% YoY) and net profit of RMB 3.137 billion (up 124.98% YoY).
Public records show that Wang Xiaodong sold nearly 500,000 shares between August 27 and September 11 at around RMB 400 per share, cashing out approximately RMB 200 million. On September 26, Zhongji Innolight announced that its controlling shareholder, Innolight Investment, planned to减持 up to 5.5 million shares (0.49% of total shares) via block trades within three months. Innolight Investment holds 127 million shares (11.42%) and pledged not to减持 further for 12 months post-completion.
Another major shareholder, Suzhou Yixingfu Enterprise Management Center,减持 4.6341 million shares from July 1 to September 17, reducing its stake from 9.417% to 8.9999%. Tianyancha data indicates that Liu Sheng, Zhongji Innolight’s chairman and CEO, is a key controller of Yixingfu. These减持 transactions may exceed RMB 2 billion, coinciding with the stock’s meteoric rise.
Since June 2025, Zhongji Innolight’s shares have surged from around RMB 100 to over RMB 500, driven by booming AI computing demand. Yu Fenghui, an advisor at HK100 Research Center, noted that while the inclusion in CSI A50 raises concerns about ETFs buying at peaks, passive funds follow index rules rather than individual stock valuations or sentiment. He emphasized that减持 by insiders doesn’t necessarily reflect company prospects and may stem from personal financial planning.
**Will ETFs Become the "Bag Holders"?** Some market participants argue that Zhongji Innolight’s valuation, with a TTM P/E of 66x and P/B of 21x, already prices in future growth, sparking debate. Data from the "Index Express" app shows 16 CSI A50-tracking ETFs with a combined AUM exceeding RMB 18.3 billion, including Ping An CSI A50 ETF (RMB 5.712 billion), Da Cheng CSI A50 ETF (RMB 2.692 billion), and JPMorgan CSI A50 ETF (RMB 2.161 billion).
A fund manager noted that most index funds will likely被动买入 Zhongji Innolight on December 11–12. Long-term investors should focus on fundamentals, as index additions typically feature higher ROE. However, they must assess whether indices themselves are overvalued.
Li Qian, an investment advisor at Huiyan Zhitou, stated that while ETFs’ bulk purchases align with index rebalancing, executives’减持 locks in profits—a common wealth management practice. ETFs prioritize long-term index investing, and Zhongji Innolight, as a GPU leader in AI computing, retains growth potential despite short-term volatility.
A Guangzhou-based私募 investor highlighted that while optical modules remain a high-growth sector, industry barriers are low, with many smaller firms expanding aggressively. This casts uncertainty over sustained pricing power and earnings. Despite solid fundamentals, investors should monitor减持 risks.
In December 2021, CATL’s inclusion in the CSI 300 amid shareholder减持 led to a 50%股价 drop within six months. However, by 2025, CATL rebounded to new highs, supported by fundamentals and its Hong Kong listing. Yu Fenghui cited this as evidence that long-term growth can outweigh short-term volatility, suggesting Zhongji Innolight may follow a similar path if fundamentals remain robust.
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