Huawei and China Mobile bet big! Just before Changjin Photonics' IPO, valuation drops by $9 million, fiber optic prices cut to capture market share

After filing in August 2025, Changjin Photon will face a crucial battle for its IPO.

On March 20, the Shanghai Stock Exchange disclosed that Wuhan Changjin Photon Technology Co., Ltd. (hereinafter referred to as Changjin Photon) is about to participate in the 12th listing review committee meeting for 2026, which will determine whether the company can continue to advance to the Sci-Tech Innovation Board of the Shanghai Stock Exchange.

As a manufacturer of specialty optical fibers, Changjin Photon primarily produces a variety of specialty optical fibers, with its core product being rare-earth-doped fibers. Devices made from rare-earth-doped fibers can be widely applied in advanced manufacturing, optical communications, national defense, and military industries.

However, before its IPO, Changjin Photon’s valuation has begun to decline. In March 2025, China Mobile Fund invested at a price of 27.05 yuan per share, valuing the company at 1.8 billion yuan at that time. Three months later, Huagong Mingde transferred its equity stake, reducing the price to 24.34 yuan per share, corresponding to a valuation of 1.71 billion yuan.

Behind the decline in valuation, Changjin Photon is extremely dependent on large customers. From 2023 to 2025, the top five customers contributed over 66% of the company’s revenue each year. Even so, the company’s revenue and profit growth rates slowed during this period.

In this context, how can Changjin Photon tell a story of sustained growth to the capital market?

1

Performance growth slows, price cuts to seize the market?

Established in July 2012, Changjin Photon has long focused on the optical fiber field.

Optical fiber, or light-guiding fiber, primarily transmits optical signals. Optical fibers that only have the function of transmitting optical signals are called conventional communication fibers, widely used in optical communications, while specialty optical fibers have unique materials and structures, giving them special properties and uses.

Currently, Changjin Photon mainly focuses on specialty optical fibers, with its products including ytterbium-doped fibers, erbium-doped fibers, thulium-doped fibers, as well as power transmission fibers and other specialty fibers and devices. Among them, rare-earth-doped fibers account for over 80% of the revenue each year, making them the company’s core product.

Due to the wide application of specialty optical fibers in advanced manufacturing, optical communications, national defense, military industries, measurement, and sensing, the market demand is vast. According to a report by the Head Leopard Research Institute, the domestic market for specialty optical fibers is expected to reach 13.1 billion yuan by 2028, with the market size for rare-earth-doped fibers projected to grow from 2.6 billion yuan in 2023 to 4.7 billion yuan by 2028.

In this expansive market, Changjin Photon’s current market share is not particularly high. According to their statement, in 2024, the market share of their ytterbium-doped fibers was about 8%, making them the second-largest producer of ytterbium-doped fibers in China; the market share for power transmission fibers was approximately 4%.

In the fiercely competitive industry, perhaps to capture more market share, Changjin Photon has attempted to “exchange price for volume,” leading to price reductions for many products.

For example, in 2024 and 2025, the sales price of power transmission fibers decreased by 19.76% and 17.70% year-on-year, respectively; in 2025, the sales price of other specialty fibers and devices dropped dramatically by 33.52% year-on-year.

During the reporting period (2023 to 2025), although the unit price of rare-earth-doped fibers overall maintained growth, the core product, ytterbium-doped fibers, which contributed over 40% of revenue each year, saw a price drop.

In 2024 and 2025, the sales price of ytterbium-doped fibers decreased by 9.77% and 9.18% year-on-year, gradually falling below 20 yuan per meter.

The Shanghai Stock Exchange also requested Changjin Photon to explain the reasons and sustainability of the significant price drop in power transmission fibers, as well as the commercial rationale for expanding the market share through price reductions.

From the data, even though some products have already seen price reductions, Changjin Photon’s performance growth continues to slow.

From 2023 to 2025, the company achieved revenues of 145 million yuan, 192 million yuan, and 247 million yuan, with growth rates of 33.56%, 32.58%, and 28.79%, respectively, declining steadily.

During the same period, its net profit attributable to shareholders was 54.66 million yuan, 75.76 million yuan, and 95.64 million yuan, with growth rates dropping from 48.60% to 26.25%, nearly halving.

Changjin Photon admits that the company faces operational pressure due to declining product prices and slowing revenue growth, which exacerbates growth risks.

Therefore, “Entrepreneur’s Frontline” also attempted to understand from Changjin Photon what the company’s core competitive advantage in the industry is—whether it relies on products or low prices? Is it only able to rely on price cuts to seize market share? Why, after price reductions, does the company’s revenue and profit growth still continue to slow? However, no response was received by the time of publication.

2

Large customers become shareholders, executives hold overlapping positions

Even with this performance, it is still supported by large customers.

During the reporting period, the top five customers contributed a total of 82.26%, 73.19%, and 66.20% of Changjin Photon’s revenue, indicating a high concentration of customers.

In this regard, Changjin Photon explained that this is due to the high concentration of the downstream optical fiber laser market corresponding to its main products. According to the China Laser Industry Development Report, Ruike Laser, Chuangxin Laser, and Jieput occupy over 50% of the domestic market share, and these companies are all among Changjin Photon’s top five customers.

Deep binding with large customers is a “double-edged sword.” On the one hand, large customers can bring scale effects that drive rapid short-term expansion; on the other hand, to achieve long-term cooperation, companies need to cede some bargaining power, lowering their negotiating strength and extending payment cycles.

From 2023 to 2025, Changjin Photon’s accounts receivable balance was 59.11 million yuan, 77.60 million yuan, and 117 million yuan, accounting for 40.89%, 40.49%, and 47.48% of operating income, respectively. This means that over 40% of the company’s revenue is “paper wealth.”

Among the top five customers in accounts receivable, Chuangxin Laser and the wholly-owned subsidiary of Jieput, Huizhou Jieput, are also on the list. Notably, the relationship between Jieput and Changjin Photon has drawn significant attention.

During the reporting period, the sales revenue from Jieput was 14.95 million yuan, 17.79 million yuan, and 23.64 million yuan, accounting for 10.34%, 9.28%, and 9.58% of the operating income during that period, making it one of the company’s top five customers.

However, the relationship goes beyond that.

In 2019, Changjin Photon initiated technical docking and reached a cooperation intention with the fiber laser manufacturer Jieput, entering Jieput’s qualified supplier system in October of that year and achieving bulk sales.

In the second half of 2019, both parties began to negotiate investment matters, signing an investment agreement in January 2020 and completing the registration of the capital increase in May of the same year. At that time, Changjin Photon’s pre-investment valuation was only 40 million yuan, with the investment price at 8.89 yuan per registered capital.

Eight months later (January 2021), Changjin Photon’s pre-investment valuation had risen to 140 million yuan, with the investment price at 24.89 yuan per registered capital. This means that in just eight months, Jieput’s shares appreciated nearly 180%.

Before the IPO, Jieput still held 12.24% of Changjin Photon’s equity, making it the company’s second-largest shareholder and the largest external investment institution. As an important shareholder, Jieput appointed Wu Jianke, the company’s vice president and board secretary, to serve as a director at Changjin Photon.

What worries external observers is whether the existing business cooperation with Jieput, along with their equity relationship and overlapping executive positions, will lead to interest transfer? How can the fairness and transparency of the cooperation be ensured? Will Jieput intervene in the company’s other collaborations? Is there a risk of reaching an agreement for Jieput to “enter at a low price” to achieve business cooperation?

In this regard, “Entrepreneur’s Frontline” attempted to inquire from Changjin Photon, but no response was received by the time of publication.

3

Huawei and China Mobile place bets, valuation drops by 90 million before IPO

Changjin Photon’s development is built upon research conducted at Huazhong University of Science and Technology.

In July 2012, the predecessor of Changjin Photon, Changjin Limited, was officially established. At the end of 2017, the company acquired six invention patents from Huazhong University of Science and Technology, initially forming the fundamental theories and plans for the design, production, and testing of specialty optical fibers, laying a foundation for entrepreneurship.

Both founders, Li Jinyan and Li Haiqing, previously worked at the Wuhan National Laboratory for Optoelectronics (renamed the Wuhan National Research Center for Optoelectronics in 2017) at Huazhong University of Science and Technology. Among them, Li Jinyan was a professor and doctoral supervisor, while Li Haiqing served as an engineer and senior engineer.

Before the IPO, Li Jinyan controlled a total of 43.12% of the voting rights through Changhexin, Zhiyuan No. 1, Zhiyuan No. 2, and a concerted action agreement, making him the actual controller.

Sharing this round of capital feast with Li Jinyan are his friends, students, and alumni. According to incomplete statistics from “Entrepreneur’s Frontline,” aside from Li Jinyan and Li Haiqing, there are seven management personnel who also graduated from Huazhong University of Science and Technology.

Among them, core technical personnel such as Wang Yibo, Zhu Yingbo, Xu Zhongwei, and Hu Xiongwei have been involved in research under Li Jinyan during their school days.

Additionally, the company’s secretary Dai Bin, operations director Chen Gui, and marketing director Liao Lei all graduated from Huazhong University of Science and Technology, and two faculty members from Huazhong University of Science and Technology have served as consultants for Changjin Photon.

Liu Changbo, a director and general manager who is a concerted actor with Li Jinyan, is a colleague of Li Jinyan and Li Haiqing. The three of them have worked together at the publicly listed company Fenghuo Communication for many years.

As a platform built by the “alumni circle,” Changjin Photon successfully attracted investments from Huazhong University of Science and Technology, as well as from Huagong Technology, a listed company stemming from Huazhong University of Science and Technology.

In addition, the company has also brought in renowned investment institutions such as Hillhouse Capital, Huawei’s Hubble Investment, and China Unicom, as well as state-owned assets from the Hubei Provincial State-owned Assets Supervision and Administration Commission, the Wuhan East Lake New Technology Development Zone Management Committee, and the Wuxi State-owned Assets Supervision and Administration Commission.

On the eve of the IPO, China Mobile’s China Mobile Fund also made a sudden investment. In March 2025, China Mobile Fund subscribed to an additional registered capital of 3.6975 million yuan in Changjin Photon for 100 million yuan, at a price of 27.05 yuan per share, corresponding to a pre-investment valuation of 1.8 billion yuan.

However, Changjin Photon’s valuation quickly began to decline. In June 2025, Huagong Venture Capital acquired a 1.07% stake transferred from Huagong Mingde at a price of 24.34 yuan per share, valuing the company at 1.71 billion yuan.

This also means that three months after China Mobile’s investment, Changjin Photon’s valuation not only did not increase but also dropped by 90 million yuan.

So, why did the company’s valuation not increase after the investment from China Mobile? Why did the valuation decrease two months before the filing? In this regard, “Entrepreneur’s Frontline” also attempted to inquire from Changjin Photon, but no response was received by the time of publication.

Objectively speaking, with the support of numerous investors, Changjin Photon’s financial chain remains robust. By the end of 2025, the company had short-term loans of 30.02 million yuan and non-current liabilities due within one year of 2.0023 million yuan. During the same period, its cash funds amounted to 101 million yuan, with trading financial assets of 212 million yuan, leaving relatively sufficient turnover space.

Currently, Changjin Photon neither lacks funds nor lacks prestige, but the decline in valuation after China Mobile’s investment exposes the uncertainty of capital regarding its growth potential. In the future, if there is a lack of sustainable profitability and expansion capability, Changjin Photon’s growth story may be difficult to sustain.

*Note: The cover image in this article comes from the photo network, based on the VRF protocol.