Net profit skyrockets 264%! Optical module leader Zhongji Xuchuang continues to deliver on its performance.

Companies standing in the "light" have all been rewarded by the market.

Benefiting from the comprehensive explosion of the AI industry, Zhongji Innolight (Zhongji Xuchuang) has crossed the trillion-yuan market capitalization threshold, and Eoptolink's market value has also surpassed 600 billion yuan. Although recent market values have seen some pullback, the over tenfold increase in one year is a full affirmation by the market of the prosperity of the optical module sector.

Different from pure AI application concept hype, the stock price increases of leading optical module companies are entirely based on solid performance delivery.

Recently, the leading optical module company Zhongji Innolight released its Q1 2026 financial report. The report shows: the company achieved revenue of 19.496 billion yuan in Q1, a year-on-year increase of 192.12%; realized net profit of 5.735 billion yuan, a year-on-year increase of 262.28%; and realized non-GAAP net profit of 5.718 billion yuan, a year-on-year increase of 264.56%.

The company's gross profit margin also rose from 24.40% in mid-2021 to 46.06% in Q1 2026. The significant increase in gross profit margin stems from the strong investment by global end customers in computing power infrastructure; the comprehensive explosion in demand not only gave birth to a trillion-yuan market cap leader in optical modules but also pushed Zhongji Innolight's valuation and stock price to historical highs.

Information shows that Zhongji Innolight's main business is the R&D, production, and sales of high-end optical communication transceiver modules, serving domestic and international customers in fields such as cloud computing data centers, data communication, 5G wireless networks, telecommunications transmission, and fixed network access.

Zhongji Innolight stated that the company primarily provides cloud data center customers with 100G, 200G, 400G, 800G, and 1.6T high-speed optical modules; provides telecom equipment manufacturers with 5G fronthaul, midhaul, and backhaul optical modules, while also supplying optical modules for metropolitan area networks, backbone networks, and core network transmission, as well as high-end overall solutions like optical components adapted for fixed network FTTX fiber access.

From a business structure perspective, Zhongji Innolight's revenue almost entirely comes from optical communication transceiver modules. By the end of 2025, the company's optical communication transceiver module revenue reached 37.457 billion yuan, accounting for 97.95% of total revenue. From the perspective of revenue geographical distribution, over 90% of Zhongji Innolight's revenue comes from overseas markets.

The market then raised two core questions: Can Zhongji Innolight currently match a trillion-yuan market cap? Has the explosive growth in performance over the past two years overdrawn future performance expectations?

First, from the perspective of the global AI industry development landscape, unlike other industries, global leading tech companies' considerations for supply chain manufacturers like optical modules and PCBs are never limited to product price; stable production capacity and ultra-high yield rates are the core assessment criteria.

Precisely because of this, leading companies in the industry like Zhongji Innolight, Eoptolink, and Shenghong Technology possess core advantages that are difficult for small and medium-sized manufacturers to replace. Overseas leading tech companies are also willing to pay higher premiums and prioritize cooperation with such leaders to ensure stable supply chain capacity delivery.

Judging from the capital expenditure plans of global leading AI companies like Google, $NVIDIA(NVDA.US), Meta, and Microsoft, the pace of investment in AI infrastructure will continue in the short term. Against this backdrop, the performance of Zhongji Innolight and Eoptolink has a foundation for continuous delivery.

In addition, although the basic technical barriers for optical modules and PCB categories are not extremely high, it is extremely difficult to enter the core supply chain of global tech giants. This is also the core reason why there are very few cross-border entrants in this round of the AI infrastructure boom.

It is worth noting that alongside the rapid performance growth, R&D investment by optical module leaders like Zhongji Innolight has also increased simultaneously. Statistics show that from 2021 to 2025, Zhongji Innolight's cumulative R&D expenses reached 4.906 billion yuan; in Q1 2026, the company's single-quarter R&D expenses reached 645 million yuan, a significant year-on-year increase of 122.05%.

It is reported that the company maintains high-intensity R&D investment, mainly used for 800G and 1.6T high-end optical module product iteration and the R&D reserve of next-generation cutting-edge technologies.

The continuously delivered outstanding performance, combined with the scarcity of the sector, has made Zhongji Innolight highly favored by institutional funds. According to Tianxiang Investment Consulting statistics, Zhongji Innolight remains the largest heavyweight stock held by public funds. By the end of Q1, a total of 1,163 funds held the stock heavily, with a total holding value of 73.896 billion yuan, a total shareholding of 130 million shares, accounting for 11.74% of the company's circulating shares.

From the overall style of public fund holdings in Q1, the technology sector remains the core theme of fund allocation. Zhongji Innolight continues to be the number one heavyweight stock for public funds, with high-quality performance funds collectively focusing on the direction of technology growth, and multiple core technology targets receiving increased holdings from public funds.

Several public fund managers clearly stated in their Q1 reports: Artificial intelligence is still the most important structural theme in current asset pricing. Whether it's the prosperity of overseas computing power supply chains or the release of domestic AI demand, the high-growth logic of the technology sector is still highly regarded by the market.

Kan Jian Finance believes that entering a trillion-yuan market cap is not the end for Zhongji Innolight. As global tech giants' capital expenditures continue to expand, the market's demand for AI infrastructure hardware will also remain high. In the long run, we are optimistic about the continuous performance delivery of leading optical module companies like Zhongji Innolight.