Hengtong Optic Electric Co Ltd

On the evening of September 24, multiple listed companies on the Shanghai and Shenzhen stock exchanges issued major announcements. Sanan Optoelectronics announced that it had received notice from the family of its actual controller Lin Xiucheng that Lin had been criminally detained by public security authorities on suspicion of embezzlement of his position and misappropriation of funds. Lin has not held any position in the company since July 10, 2017, and the company said the matter is unrelated to the company and will not have a material impact on production and operations. Hengtong Optoelectronics plans to issue shares to specific investors to raise no more than 6.636 billion yuan, for projects including research and production of next-generation optical fiber, construction of high-end optical new materials in Inner Mongolia, and research and development of advanced CPO packaging. Guanghuan Xinwang plans to make an additional investment of no more than 1.265 billion yuan in the Helinger intelligent computing center project, bringing total project investment to approximately 2.5 billion yuan and raising IT load capacity from 60 to 100 megawatts to 90 to 120 megawatts. China Life Insurance plans to subscribe for capital contributions of no more than 4.5 billion yuan in a partnership with total subscriptions of no more than 6 billion yuan, focusing on high-quality unlisted equity in the artificial intelligence and semiconductor sectors. Shandong Gold Mining has adjusted its 2026 gold production plan from no less than 49 tonnes to between 36 and 38 tonnes. The company's mined gold output in 2025 was 48.89 tonnes, and net profit attributable to the parent is expected to decline year on year in 2026. In addition, Zhongji Innolight completed a buyback of 5.6531 million shares for 4.997 billion yuan, Jifeng Auto Parts' controlling subsidiary received a nomination for a passenger car seat assembly project with an estimated total life-cycle value of 9.2 billion yuan, and EVE Energy plans to transfer a 45 percent stake in Hubei Enjie New Materials for 1.15 billion yuan.

Hengtong Optic-Electric released its 2026 interim report. Total operating revenue was 42.026 billion yuan, and net profit attributable to the parent company was 3.12 billion yuan. Net cash flow from operating activities was negative 865 million yuan, a decrease of 870 million yuan compared with the same period last year, down 17,700 percent year on year. The company's latest asset-liability ratio was 52.39 percent, gross margin was 16.77 percent, return on equity was 9.26 percent, and diluted earnings per share was 1.29 yuan. The number of shareholders was 590,600, and the top ten shareholders held 37.62 percent of total share capital.

On August 27, the A-share CPO concept climbed steadily during the session. Sai MicroElectronics hit a 20-centimeter limit up, Qingshan Paper and Yangtze Optical Fibre and Cable sealed limit up, while Changxin Bochuang, Focuslight Technologies, and Kingshine Electronic rose more than 10 percent. Changyingtong, Hengtong Optic-Electric, and several other stocks also strengthened. On the news front, after the U.S. market close on August 26 Eastern Time, Nvidia reported better-than-expected earnings. Revenue for the second quarter of fiscal 2027 reached 96.2 billion dollars, up 106 percent year on year and above the market estimate of 92.38 billion dollars. Adjusted earnings per share came in at 2.22 dollars, up 120 percent year on year. Data center revenue was 89 billion dollars, also beating market expectations. On guidance, Nvidia expects third-quarter fiscal revenue to reach a midpoint of 108 billion dollars, up nearly 90 percent year on year and above the analyst estimate of 105.15 billion dollars. Adjusted gross margin is expected to be between 73.5 percent and 74.5 percent. The earnings call also revealed that Nvidia will work with Amazon Web Services to deploy an additional 2 million GPUs across AWS global infrastructure from 2027 to 2028, and expects fiscal 2028 revenue to grow about 70 percent. In addition, Nvidia announced full mass production of its Spectrum-X Ethernet photonics switching platform, marking the move of CPO solutions from technology validation to large-scale manufacturing. Overseas supply chain companies Lumentum and Coherent also disclosed shipment plans for CPO products. Several brokerages gave an optimistic outlook on China's optical communications sector, believing that investment sentiment in AI infrastructure continues to rise.

Hengtong Optic-Electric has pre-won a 1.831 billion yuan domestic and overseas marine energy project, which is one of several marine energy projects the company has recently undertaken. Today, all three major A-share indices rose, with market turnover of about 1.82 trillion yuan, down more than 20 billion yuan from the previous trading day. More than 2,900 stocks closed higher, including 56 at the daily limit. On the sector front, zinc and lead concepts led gains, while CRO, MLCC, and lab-grown diamond concepts led declines. In institutional research, 201 buy-type rating records were issued today, covering 162 stocks. Luzhou Laojiao received five buy ratings, and Betaini had the highest upside potential at 63.41 percent. On the Dragon and Tiger list, Guoyi Company topped net institutional buying at 64.2646 million yuan, while Zhongji United topped net institutional selling at 194 million yuan.

On the evening of August 26, multiple listed companies on the Shanghai and Shenzhen stock exchanges released announcements covering half-year results, major contracts, and buybacks. Jiama Electric said its nuclear power business is now at full capacity. Kingwon Electronics expects to make more progress with cloud server vendors by 2027. Hengtong Optic-Electric has been preliminarily selected for a 1.831 billion yuan marine energy project. Dapu Micro signed a 515 million US dollar enterprise-grade PCIe SSD sales order. On the earnings front, Northern Copper reported first-half net profit of 1.396 billion yuan, up 186.61 percent year on year. Hengtong Optic-Electric posted net profit of 3.12 billion yuan, up 93.38 percent. Hua Hong Hongli reported net profit of 399 million yuan, up 436.69 percent. Lianxun Instruments posted net profit of 567 million yuan, up 903 percent. New China Life reported net profit of 22.793 billion yuan, up 54 percent. Shennan Circuits posted net profit of 2.251 billion yuan, up 65.55 percent. Tsingtao Brewery reported net profit of 3.92 billion yuan, up 0.4 percent. Yili Group posted net profit of 5.759 billion yuan, down 20.02 percent. China CITIC Bank reported net profit of 37.602 billion yuan, up 3.08 percent. Conch Cement posted net profit of 2.527 billion yuan, down 42.76 percent. In addition, Yili Group plans to buy back shares worth between 1 billion and 2 billion yuan for cancellation.

On the evening of August 26, multiple listed companies released positive announcements. Jiamusi Electric Machine said its nuclear power business is currently at full production, and the new multifunctional high-temperature high-pressure nuclear main pump full-flow test bench project, with an investment of 381 million yuan, has been completed, with comprehensive testing capability leading in China. Kinwong Electronic expects to make more positive progress with North American hyperscale cloud provider customers by 2027. Hengtong Optic-Electric's net profit in the first half of the year rose 93.38% year on year, and revenue from its optical communications business grew more than 130% year on year. Hua Hong Semiconductor's net profit in the first half of the year rose 436.69% year on year, with shipments hitting a record high. Lianxun Instruments' net profit in the first half of the year rose 903% year on year, and it plans to transfer 4.8 shares for every 10 shares from capital reserve. New China Life Insurance's net profit in the first half of the year rose 54% year on year, and it plans to pay a cash dividend of 0.73 yuan per share. Shennan Circuits' net profit in the first half of the year was 2.251 billion yuan, up 65.55% year on year. Yili Group plans to buy back shares for no less than 1 billion yuan and no more than 2 billion yuan. Leaderdrive's net profit in the first half of the year rose 31.25% year on year, and its embodied intelligent robot business grew substantially in scale. Northern Copper's net profit in the first half of the year was 1.396 billion yuan, up 186.61% year on year. Dapu Microelectronics signed a sales order for enterprise-grade PCIe SSDs worth 515 million US dollars, accounting for 152.70% of its 2025 main business revenue. COSCO Shipping Specialized Carriers' net profit in the first half of the year was 1.371 billion yuan, up 66.24% year on year.

Hengtong Optic-Electric announced that the company purchased 1,851,300 shares in the secondary market through the special account of the Huaneng Trust Hengtong Optic-Electric Employee Incentive Service Trust, accounting for approximately 0.08% of the company's total share capital, at an average price of 58.24 yuan per share, using a total of 108 million yuan. The purchase of shares for the 2025 annual reward fund has been completed. Previously, the shareholders' meeting approved the withdrawal of 105 million yuan from the 2025 annual reward fund to buy company shares, serving as the shares for the fourth phase of the 2023 to 2027 reward fund. The company expects a net profit attributable to the parent company of 3.016 billion yuan to 3.568 billion yuan for the first half of 2026, a year-on-year increase of 86.94% to 121.2%, mainly benefiting from the growth in optical communication demand and rising prices driven by the development of artificial intelligence and increased capital expenditure in data centers. Hengtong Optic-Electric's share price has pulled back from its historical high of 124.86 yuan per share on June 23, with the latest closing price at 55.12 yuan per share. Today's decline was 8.07%, and the cumulative drop from the peak is 55.85%. The latest market capitalization is 135.9 billion yuan.

Several co-packaged optics companies have reported sharp first-half earnings growth. DSBJ expects net profit of 2.9 billion to 3 billion yuan for the first half of 2026, up 282.58 percent to 295.78 percent year on year. Its traditional businesses in consumer electronics and auto parts remain solid, the integration of its optical module business is showing results, and data center related investments are gradually generating returns. Yangtze Optical Fibre and Cable expects net profit of 2.4 billion to 3 billion yuan, up 711 percent to 914 percent, driven by demand for optical fibre and cable from computing power data center construction. Accelink Technologies expects net profit of 559 million to 615 million yuan, up 50 percent to 65.15 percent, as the AI computing power investment wave drives rapid growth in demand for datacom optical modules. Tongfu Microelectronics has entered the supply chain through advanced CPO packaging technology and expects net profit of 1.6 billion to 1.8 billion yuan, up 288.26 percent to 336.80 percent, with strong growth in the semiconductor industry and rising revenue from mid-to-high-end products boosting performance. ZTT expects net profit of 2.352 billion to 2.508 billion yuan, up 50 percent to 60 percent, as the accelerated rollout of AI computing power and new digital infrastructure improves the profitability of optical communication products. Earlier, Hengtong Optic-Electric, SDGI, and Yongding also disclosed positive profit forecasts. Brokerages believe the AI computing power boom is driving the optical communication industry into a new growth cycle. CICC expects the global optical module market to achieve a compound annual growth rate of 28 percent from 2024 to 2027, with 800G and 1.6T optical modules ramping up rapidly in 2026, bringing both volume and price increases. However, attention should be paid to uncertainties such as fluctuations in downstream capital expenditure and technology iteration.

Yangtze Optical Fibre has issued a preliminary earnings announcement for the first half of 2026, projecting net profit attributable to shareholders of the listed company at approximately 2.4 billion to 3 billion yuan, representing year-on-year growth of 711% to 914%. Deducted non-recurring net profit is expected to be around 2 billion to 2.6 billion yuan, a surge of 1,349% to 1,784%. The company said the profit growth was mainly driven by the accelerated construction of computing data centres, sustained growth in demand for new types of optical fibre and cable products both at home and abroad, and its efforts to seize international market opportunities and expand computing data centre-related businesses, leading to core customer expansion, product mix optimisation, and improved profitability. On the same day, Zhongtian Technology also issued a positive profit alert, forecasting first-half net profit attributable to shareholders of the listed company at 2.352 billion to 2.508 billion yuan, up 50% to 60% year on year, citing the accelerated rollout of AI computing power and new digital infrastructure, an improved supply-demand balance in the optical fibre and cable industry, and rising volumes and prices. A day earlier, Hengtong Optic-Electric projected first-half net profit attributable to shareholders of the listed company at 3.016 billion to 3.568 billion yuan, an increase of 86.94% to 121.20%, benefiting from rapid AI development and higher data centre capital expenditure. Fibre-optic sector companies are collectively reporting good news, with the profit growth forecast of industry leader Yangtze Optical Fibre particularly outstanding.

The State Council has issued the 15th Five‑Year Carbon Peaking Action Plan, laying out plans to speed up the construction of ultra‑high‑voltage long‑distance transmission corridors and adding more than 80 gigawatts of west‑to‑east power transmission capacity. The plan calls for enhancing the power system’s ability to absorb new energy, supporting direct green electricity supply models, and promoting the integrated development of generation, grid, load, and storage. China Galaxy Securities believes that strengthening investment in ultra‑high‑voltage and main grids is a key task for State Grid during the 15th Five‑Year Plan period. State Grid aims to bring 15 planned ultra‑high‑voltage direct‑current projects into operation as soon as possible, boosting inter‑provincial and inter‑regional transmission capacity by 35 percent. Among related companies, Hengtong Optic‑Electric continues to increase research and development investment in ultra‑high‑voltage transmission equipment, while Xinfengguang’s SVG products can significantly improve power distribution quality. In other news, the maiden flight window for the Long March 10B reusable rocket has been set for July 10 to 13. It will verify the world‑first offshore net‑capture recovery technology. If successful, China will become the second country to master large‑payload reusable rocket technology, potentially reducing per‑launch costs by more than 40 percent. Huawei, together with China Mobile Research Institute and over 20 industry chain partners, has launched the OPEN NPO project, initiating China’s first NPO optical interconnect multi‑source agreement to advance near‑package optics standard systems. On the earnings front, GigaDevice estimates its first‑half 2026 net profit at approximately 6.9 billion yuan, a year‑on‑year increase of around 1,099 percent. Foxconn Industrial Internet expects net profit between 23.4 billion and 24.4 billion yuan, up 93 to 101 percent. Western Mining forecasts net profit of 4 billion to 4.3 billion yuan, a rise of 114 to 130 percent.