Riding the wave of accelerated AI data center construction overseas, Zhongji Innolight Co.,Ltd. (SZSE: 300308) has delivered blockbuster first-half results, driven by surging demand for high-speed optical modules. The company's premium 1.6T products have entered mass production, with international markets serving as the primary growth engine, propelling both revenue and net profit to record highs.
For the first half of 2026, the company reported total revenue of RMB 41.778 billion, a year-on-year increase of 182.49%. Net profit attributable to shareholders surged 241.70% to RMB 13.651 billion. Excluding non-recurring gains and losses, net profit climbed 229.32% to RMB 13.092 billion, underscoring the strength of its core operations.
Breaking down the figures, the second quarter stood out markedly. Based on calculations from the half-year minus first-quarter data, Q2 revenue reached RMB 22.282 billion, up 14.3% quarter-over-quarter, while attributable net profit hit RMB 7.917 billion, a 38.0% sequential increase. This demonstrates that profit growth significantly outpaced revenue, with the momentum gap widening notably.
Geographically, overseas markets remain the cornerstone of growth. International revenue hit RMB 39.615 billion in H1, up 209.9% year-on-year, accounting for over 94% of total revenue. As global cloud service providers and AI computing solution vendors ramp up capital expenditure on compute infrastructure, demand for 800G and 1.6T high-speed optical modules continues to rise. Zhongji Innolight Co.,Ltd. (SZSE: 300308) has further solidified its supply share among key clients.
Profitability metrics also improved in tandem. Operating profit grew 253.30% year-on-year, outpacing revenue growth, while the weighted average return on equity jumped to 37.62% from 18.84% in the same period last year. The company also boosted R&D spending by 96.9% to approximately RMB 1.153 billion, focusing on silicon photonics and coherent technology platforms.
Notably, the semi-annual report reveals that Zhang Jianping has entered as the ninth-largest shareholder, holding 5.9348 million shares, representing 0.53% of total share capital.
Overseas Revenue Soars as AI Infrastructure Demand Unleashes
The overseas segment, which constitutes the bulk of Zhongji Innolight Co.,Ltd. (SZSE: 300308)'s business, generated RMB 39.615 billion in H1, up roughly 210% from RMB 12.781 billion a year earlier, accounting for over 90% of total revenue. This surge is primarily attributed to AI data center construction.
With leading cloud providers continuously expanding AI training and inference infrastructure, demand for high-speed optical modules required for GPU cluster interconnection has intensified. Leveraging superior product performance, reliable delivery capabilities, and established partnerships, the company has maintained a high supply share while also attracting incremental contributions from new customers.
The domestic market also sustained growth momentum. As internet companies accelerate AI application deployment and increase compute investments, the company's 400G and 800G product deliveries have steadily expanded in China, supported by the mass production and delivery capabilities of its Chengdu Zhihue facility.
1.6T Enters Volume Ramp-Up, Next-Gen Technologies Under Development
On the product front, 1.6T silicon photonics modules have begun scaling up, with shipment volumes rising quarter by quarter, emerging as a fresh growth catalyst. While 800G continues to ramp, the company is advancing higher-speed products and next-generation optical interconnect solutions.
During OFC 2026, Zhongji Innolight Co.,Ltd. (SZSE: 300308) showcased its 12.8T 8xDR8 XPO module, 6.4T 4xDR8 NPO module, 1.6T OSFP 2xLR4 module based on TFLN MZM technology, and an 800G LR2 lightweight coherent optical module.
Currently, the company is pursuing custom development and refinement across next-gen optical interconnect technologies including XPO, NPO, CPO, and OCS, with a product roadmap spanning current mass-produced items and future iterations.
R&D investment has also risen sharply, with H1 R&D expenses reaching approximately RMB 1.153 billion, up 96.9% year-on-year, as the company intensifies efforts in silicon photonics and coherent technologies to support high-speed module product evolution.
Profit Growth Outpaces Revenue as Product Mix Optimizes
Operating profit grew 253.30% year-on-year in H1, significantly outpacing revenue growth, reflecting enhanced profitability. According to company disclosures, continuous product solution optimization and improved operational efficiency are key drivers. As the share of high-rate 800G and 1.6T products increases, the product mix has improved; meanwhile, ongoing automation upgrades in production processes are yielding economies of scale.
The company currently operates manufacturing bases in Suzhou, Tongling, Chengdu, Taiwan (China), and Thailand, with capacity expansion and production efficiency improvements advancing in parallel.
The weighted average ROE stood at 37.62% for H1, up 18.78 percentage points from 18.84% a year earlier. Additionally, the company declared a cash dividend of RMB 12 per 10 shares for the first half.
However, operating cash flow declined, with net cash from operating activities at RMB 1.8 billion in H1, down 44.08% year-on-year. Amid rapid business expansion, increased inventory buildup and capacity expansion have raised working capital requirements.
By the end of the period, total liabilities stood at RMB 24.875 billion, up 82% from RMB 13.664 billion at the end of last year, pushing the debt-to-asset ratio to 36.08%. As business scale and production capacity continue to grow, capital absorption and rising debt levels warrant close monitoring.
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