The explosive growth of the artificial intelligence (AI) industry in recent years has placed unprecedented demands on communication networks in terms of bandwidth, density, and energy efficiency. Driven by the accelerated construction of global AI data centers and technological advancements, the optical module sector has experienced rapid expansion, attracting numerous companies to enter the market. Against this backdrop, Haiguang Xinzheng Technology Co., Ltd. ("Haiguang Xinzheng"), a provider of optoelectronic interconnect products, submitted its listing application to the Hong Kong Stock Exchange on October 31, with Huatai International acting as the sole sponsor.
The company plans to allocate approximately 51% of the IPO proceeds to capacity expansion and automation upgrades, 37% to R&D for new products and technologies, 2% to business promotion and overseas market expansion, and 10% to working capital and general corporate purposes. These efforts aim to strengthen its competitive edge in silicon photonics-based optical modules and capitalize on AI-driven industry opportunities.
**Global Top 10 Optical Module Provider** According to its prospectus, Haiguang Xinzheng traces its origins to Suzhou Haiguang Xinchuang Optoelectronics Technology Co., Ltd., established in November 2011. After completing its股份制改制 in December 2020, it adopted its current name. Specializing in optoelectronic interconnect products, the company’s offerings include optical modules, active optical cables (AOCs), and related components, primarily deployed in AI data centers to support high-speed, high-density, and energy-efficient data transmission.
Frost & Sullivan data ranks Haiguang Xinzheng as the world’s 10th-largest professional optical module provider by 2024 revenue, with a 0.7% market share. Notably, it was the fastest-growing firm among the top 10 players from 2022 to 2024. In the global and Chinese AI optical module markets, it holds the sixth and fifth positions, respectively, with a 1.8% global share.
Optical modules constitute its core revenue stream, accounting for 68%, 70.6%, 68.5%, and 69.3% of total revenue from 2022 to H1 2025. AOCs contributed 12.5%–26.3%, peaking at 26.2% in H1 2025, while other products (e.g., optoelectronic components and raw materials) remained marginal at 4.5% in H1 2025.
**Competitive Strengths** Haiguang Xinzheng’s advantages lie in three key areas: 1. **Technology Barriers**: Its silicon photonics-based end-to-end capabilities—spanning chip design to module manufacturing—differentiate its product portfolio, which covers 100G–800G transmission rates and complies with industry-standard form factors. All 400G+ single-mode modules utilize silicon photonics, while AOCs complement its offerings for short-distance interconnects. 2. **Premium Clients**: Through joint design manufacturing (JDM) partnerships, it has secured deep ties with leading Chinese internet and cloud service providers, with products widely deployed in top-tier AI data centers. 3. **Cost Efficiency**: Its "Less Change CMOS" design for silicon photonic chips leverages 12-inch wafer production lines, reducing overseas foundry costs by 30%–40% and undercutting rivals’ module costs by 20%–30%.
**Future Roadmap** The company is focusing on three technological frontiers: - Next-gen high-speed (1.6T/3.2T+) optoelectronic products to meet rising AI data throughput demands. - Advanced near-packaged optics (NPO) and co-packaged optics (CPO) to enhance energy efficiency. - PCIe AEC/AOC products for high-speed server-accelerator interconnects.
**Revenue Surge, Profitability Lag** Buoyed by AI-driven demand, Haiguang Xinzheng’s revenue grew exponentially—from RMB103 million in 2022 to RMB698 million in H1 2025, with a 189.6% CAGR (2022–2024) and 164.4% YoY growth in H1 2025. However, net losses totaled RMB60.2 million (2022), RMB109 million (2023), RMB18.2 million (2024), and RMB34.9 million (H1 2025), cumulatively exceeding RMB200 million over 3.5 years.
Low gross margins—peaking at 11.8% in 2024 before slipping to 6.1% in H1 2025 due to product mix shifts and competition—and negative operating cash flows (RMB90.7 million in 2022 to RMB179.7 million in H1 2025) reflect ongoing challenges. Nonetheless, financing activities bolstered cash reserves to RMB348 million by mid-2025.
**Growth Prospects** The global optoelectronic interconnect market, valued at RMB46.2 billion in 2024 (82.3% CAGR since 2020), is projected to reach RMB212.2 billion by 2029 (35.7% CAGR). AI optical modules, a key segment, are expected to grow at 30.1% CAGR to RMB1.59 trillion by 2029. In China, spurred by national data center initiatives, the AI module market could expand at a 42.3% CAGR to RMB40.4 billion by 2029, with silicon photonics modules (59.7% CAGR) hitting RMB23 billion.
Haiguang Xinzheng’s alignment with industry trends—high-speed modules, NPO/CPO adoption, and silicon photonics—positions it well. Its ongoing R&D in 1.6T modules and 3.2T/6.4T chips for NPO/CPO applications underscores its technical readiness.
**Investment Considerations** While the company’s silicon photonics expertise and revenue growth are compelling, investors must weigh risks like delayed profitability, supply chain concentration, and technological obsolescence. Its IPO could catalyze scale-driven margin improvements, but execution remains critical.
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