Hisense Group's subsidiary Nazhen Technology, formerly known as Hisense Broadband, officially passed the Hong Kong Stock Exchange main board listing hearing on August 30, with Citigroup and CITIC Securities serving as joint sponsors. Based on global optical module revenue in 2025, Nazhen Technology holds a 4.0% market share, ranking fifth among professional manufacturers worldwide and third in China. The company generated RMB 8.355 billion in revenue for 2025 with a net profit of RMB 873 million, of which approximately RMB 353 million came from a one-time gain on the disposal of a joint venture. If successfully listed, Nazhen Technology will become the sixth listed company within the Hisense Group ecosystem.

A 23-Year Journey to Listing for a 'Slow-Moving' Company

Nazhen Technology's path to the public market is itself a story of deliberate patience. The company's roots trace back to Ligent Tech, founded in the U.S. in 2002 by Hisense Group and Huang Weiping, followed by Qingdao Broadband, a joint venture established in Qingdao in 2003. Huang Weiping, now 68, is a professor at Shandong University's School of Information Science and Engineering and holds a Ph.D. from MIT. He was named to Stanford University's top 2% of scientists list in 2024. The company was incorporated in the Cayman Islands in 2009, with its domestic operating entity being Qingdao Hisense Broadband Multimedia Technology Co., Ltd., employing a round-trip investment structure of "Cayman listing with domestic operations," a structure that became a regulatory focal point during subsequent listing reviews.

In terms of shareholding, Hisense Group Holdings, through direct ownership and indirect holdings via subsidiary Century Jinlong, collectively holds approximately 48.61% of shares, making it the controlling shareholder. Founder Huang Weiping holds 23.22% through his controlled entity TransLight. Spring Capital's Global Optical holds a 16.48% stake. In July 2025, Xiamen state-owned capital invested RMB 330 million for approximately 3.06% of shares, corresponding to a post-investment valuation of around RMB 10.784 billion. The financing pace has also been notably slow. Since its inception, the company has raised approximately RMB 1.045 billion in cumulative funding, with major external capital coming from Spring Capital, Archcom LLC, and the Xiamen State-owned Assets Supervision and Administration Commission. After completing early-stage financing in 2011, no new funding round was conducted for 14 years until the Pre-IPO round in July 2025, priced at HK$15.37 per share, implying a post-investment valuation of approximately HK$12.5 billion.

The listing process has been fraught with setbacks. The first filing to the Hong Kong Stock Exchange in August 2025 lapsed after six months; a second filing in March 2026 secured the CSRC's overseas issuance and listing filing in August, followed by the formal passage of the hearing on August 30. During the IPO filing phase, the CSRC issued supplementary material requirements, directly questioning the compliance of "establishing offshore structures and round-trip acquisitions" in the company's historical development, the impact of a key lawsuit on the listing, and also requiring clarification on shareholder penetration and whether all historical equity changes in the domestic operating entity were lawful and compliant. The company also admitted to underpaying social insurance and housing provident fund contributions from 2023 to 2025, amounting to approximately RMB 9.6 million, RMB 10.9 million, and RMB 12.6 million respectively, with a cumulative remediation exposure of approximately RMB 37.8 million over three years, indicating that workforce compliance still requires improvement amid rapid expansion.

Moving from the 'Carrier Cafeteria' to the 'AI Cafeteria'

Nazhen Technology's core business spans three segments: optical modules, optical chips, and optical network terminals. Three years ago, telecom optical modules and optical network terminals served as the company's cash cows; today, data center optical modules have come to represent the majority of its revenue. In 2023, data center optical modules accounted for only 24.9% of revenue, surging to 65.5% by 2025 and further to 69.4% in the first half of 2026. Correspondingly, telecom optical modules have been compressed from 39.7% to 9.9%. In essence, the company has transitioned from the "carrier cafeteria" to the "AI cafeteria."

On the technology front, Nazhen Technology has mass-produced 800G and 1.6T optical modules, delivered 3.2T NPO optical engine samples for customer validation, and is co-developing 6.4T NPO optical engines with customers while advancing next-generation technologies such as LPO and LRO. In optical chips, the company is among China's first manufacturers to successfully develop and mass-produce 10G EML laser chips, having commercialized 75mW and 100mW CW-DFB laser chips, with 200G EML and 400G indium phosphide laser chips under development. However, optical chips currently function more as a "showcase" than a "breadwinner." From 2023 to 2025, external sales of optical chips plummeted from RMB 112 million to RMB 23.79 million, before marginally increasing to RMB 28.93 million, while their share of total revenue fell from 2.6% to 0.3%. The gross margin for the optical chip segment was -121% in 2025, and although it recovered to 40.7% in the first half of 2026 due to the ramp-up of 75mW CW-DFB chips, it still represents only 1.6% of revenue. The domestic substitution story for optical chips remains in its infancy.

The financial data reveals a classic "slow start, rapid surge" trajectory. From 2023 to 2025, revenue jumped from RMB 4.239 billion to RMB 5.087 billion, then to RMB 8.355 billion, representing a three-year compound annual growth rate of approximately 40%. Net profit, however, has been volatile, swinging from RMB 216 million to RMB 89 million, before surging to RMB 873 million. Gross margins stood at 20.6%, 17.4%, and 20.0% respectively, crossing 24.2% for the first time in the first half of 2026. Of the RMB 873 million net profit, RMB 353 million came from the gain on disposal of equity in joint venture Qingdao Xinghang, accounting for approximately 40.4%. Excluding this one-time gain, operating net profit for the year was approximately RMB 520 million, with a net margin of about 6.2%.

More concerning is the persistent margin pressure. The gross margin for data center optical modules has steadily declined from 31.2% in 2022 to 22.6% in the first half of 2025, a drop of 8.6 percentage points over three and a half years. The gap with leading peers is significant, with Zhongji Innolight achieving a gross margin of approximately 42% and Eoptolink around 47%. The company attributes this to two factors: competitive pricing to capture domestic market share, and slower absorption of fixed costs such as depreciation during the capacity ramp-up of high-end, high-speed products. Customer concentration is also rising, with the top five customers accounting for 55.8% of revenue in 2023, climbing to 71.8% in the first half of 2026. Supplier and customer overlap is substantial, with seven suppliers in 2023 also serving as customers, contributing 50.6% of revenue; by 2025, five such entities remained, contributing 49.3%. Hisense Group, as both the controlling shareholder and a former significant supplier and customer, will continue to face market scrutiny over the impact of these transactional structures on the listed entity's independence.

A Good Track Doesn't Guarantee a Good Company

Nazhen Technology is riding a wave of industry prosperity. Frost & Sullivan projects the global optical module market to grow from RMB 162.4 billion in 2025 to RMB 707.6 billion by 2030, representing a compound annual growth rate of 34%, with data center optical modules growing even faster at 40.5%. LightCounting forecasts the global Ethernet optical module market to reach $26 billion in 2026, with the combined market for 800G and 1.6T modules potentially reaching $14.6 billion, accounting for approximately 64% of the total. Domestic Chinese manufacturers already occupy seven of the top ten global positions, with the top five firms holding a combined market share of 61.4%, highlighting the intensifying concentration trend in the industry.

However, the competitive landscape presents challenges for Nazhen Technology. Zhongji Innolight retains its global leadership with a 114% revenue growth rate and $3.3 billion in revenue, commanding an approximate 23% global market share; Eoptolink follows at around 15%, with the two combined approaching 40%. Nazhen Technology's 4% global share suggests significant room for improvement, but it also faces dual risks of price wars and technological obsolescence. From a valuation perspective, A-share optical module leaders dwarf Nazhen Technology in scale. As of early September 2026, Zhongji Innolight's market capitalization stood at approximately RMB 963.9 billion, Eoptolink at RMB 531 billion, and Accelink Technologies at RMB 142.3 billion. Based on Nazhen Technology's 2025 revenue of RMB 8.355 billion and post-investment valuation of approximately RMB 10.8 billion, its price-to-sales ratio is approximately 1.3 times, while Zhongji Innolight, with 2025 revenue of approximately RMB 24 billion (estimated at $3.3 billion), commands a P/S ratio of around 40 times. Nazhen Technology's valuation is notably lower within the optical module sector, reflecting both its margin and profitability gaps versus industry leaders, and also implying potential valuation recovery if high-end capacity is successfully deployed.

Nazhen Technology's overseas revenue share remains low, with U.S. revenue comprising only 14.9% of total in 2025, compared to Zhongji Innolight's 88% overseas share and Eoptolink's 95%. Listing on China's A-share market has proven challenging for optical module companies. Since 2025, several optical communications firms have encountered obstacles in their A-share IPO pursuits. Youxun Co.'s STAR Market IPO was temporarily deferred for review, with the listing committee requesting clarification on whether share-based payment accounting treatment complies with accounting standards, before later passing review in October 2025. A-share companies such as HGTech and T&S Communications have opted for Hong Kong listings, with the CSRC requiring supplementary explanations on overseas investment compliance and export control compliance. For Nazhen Technology, choosing Hong Kong over the A-share market reflects both Hisense Group's strategic considerations for spinning off the subsidiary and a way to circumvent the A-share market's more stringent review requirements regarding round-trip structures and historical development.

For Hisense Group, Nazhen Technology represents the sixth IPO; but for Nazhen Technology itself, this is merely the first ticket in the marathon of AI computing power. With gross margins trailing industry leaders, approximately 40% of profits derived from asset sales, high customer concentration, and complex related-party transactions, the immediate priority is not continuing to tell stories but rather scaling up high-end capacity for 800G, 1.6T, and even 3.2T products, transforming optical chips from a "showcase" into a "breadwinner." Whether this ticket can be converted into a long-term meal card will become evident over the next three years.