Behind Zhongji Innolight's $600B+ Market Cap: A High-Stakes "David vs. Goliath" Tech Bet

Deep News12-17

The A-share market recently coined the term "Yi-Zhong-Tian" for a trillion-yuan market cap club—referring to New Essex, Zhongji Innolight, and TFC Optical Communication, three optical module stocks. Among them, Zhongji Innolight leads in revenue and market capitalization.

As of December 17, Zhongji Innolight's stock closed at ¥589.98, surging 381% year-to-date, with a market cap of ¥655.5 billion at historic highs.

The company's trajectory hinges on founder Wang Weixiu's audacious "David vs. Goliath" crossover gamble. This bet transformed its fate: Over nine years, annual revenue grew 180-fold to ¥23.86 billion, while net profit skyrocketed over 500-fold to ¥5.17 billion. The move also made Wang, now Shandong Yantai's richest person, a billionaire.

**The All-In Gamble at 66** In 2016, facing plummeting earnings (Q1 revenue down 46% YoY to ¥10.33 million, net loss of ¥6.5 million), 66-year-old Wang orchestrated a ¥2.8 billion acquisition of Suzhou Xunrui Tech—a firm 4.4x larger than his motor equipment company's total assets. Wang personally invested ¥284 million, staking most of his wealth. Post-merger, Zhongji shed its traditional business to focus on optical modules, with Xunrui's founder Liu Sheng taking operational helm.

**From Chance to Champion** Liu Sheng's 2008 startup Xunrui survived early losses by betting on 10G+ high-speed modules when peers stuck to 2.5G/10G. A breakthrough came in 2011 when Xunrui became Google's first certified 40G module supplier after a last-minute hardware fix during testing. This cemented its tech credibility, later landing NVIDIA as a key client.

**Tech Dominance** Zhongji now leads in: - **Product cycles**: Launched 800G modules during the industry's 400G transition, with 1.6T solutions underway. - **Core tech**: Self-developed 12nm silicon photonics chips (90%+ yield) and CPO tech certified by NVIDIA. - **Global footprint**: Thailand factory ensures stable North America deliveries, complementing Chinese plants.

Currently, Zhongji supplies 50%+ of Google's 800G modules, 30-40% of Amazon's, and is Meta/Microsoft's primary 400G vendor. Its 1.6T modules are seeing rising orders, with mass adoption expected by 2026-2027.

This $650B+ market cap story exemplifies how strategic daring and tech precision can propel Chinese manufacturing into global high-tech leadership.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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