From a loss of 6 million to a net profit of 190 million, a 32-fold increase in net profit—how did Yuanjie Technology become a thousand-yuan stock?

Ask AI · How can the AI computing power boom drive Yuanjie Technology’s performance turnaround?

On March 20, according to a report by Hongxing Capital Bureau, in the morning of that day, Yuanjie Technology (688498.SH), a popular stock in the CPO concept within the optical communications industry chain, surged as much as 20%. The share price peaked at 1,140 yuan per share, setting a record high, becoming the 8th stock in A-shares to trade at over 1,000 yuan per share and the second-highest priced A-share stock. The peak market cap reached 97.98 billion yuan, just one step away from 100 billion yuan.

Shortly before that, Yuanjie Technology further released an announcement stating that the company plans to issue overseas listed shares (H shares) overseas. Yuanjie Technology made it clear: “Within the validity period of the shareholders’ meeting resolution (i.e., within 24 months from the date the shareholders’ meeting of the company approves it), we will select an appropriate time and issuance window to complete this H-share listing.”

Hongxing Capital Bureau noted that this semiconductor company, whose main business is optical chips, has staged an astonishing “turnaround” over the past year: in 2024, it was mired in losses, while in 2025 it delivered a track record of net profit jumping by more than 32 times. Behind the surge in performance is an explosive growth in AI computing power demand, as well as the company’s dramatic shift from a traditional communications components supplier to a “water seller” in the AI industry chain.

By the midday close on March 20, Yuanjie Technology was trading at 1,138.42 yuan per share, up 19.83%, with a total market capitalization of 97.845 billion yuan.

Performance “turnaround”:

From a loss of 6.13 million yuan to net profit of 191 million yuan, net profit “soars” by 32 times

Yuanjie Technology’s performance reversal is nothing short of dramatic. In 2024, due to factors such as telecom market destocking and a slowdown in 5G construction, the company incurred its first listing loss. For the full year, its attributable net profit was -6.1339 million yuan, once leading the market to question “turning over immediately after listing.” For a long time, the company has played more of the role of a telecom market infrastructure supplier, with its main products being low-speed chips used in access networks and mobile networks.

The turning point came in 2025, when this identity was completely reshaped. As the AI wave swept across the globe, the supply-and-demand landscape of the optical chip industry was rebuilt. The financial report shows that in the first three quarters of 2025, Yuanjie Technology’s attributable net profit reached 106 million yuan, up 19,348.65% year over year. Among them, in the third quarter alone, revenue was 178 million yuan and net profit was 59.63 million yuan—both hitting new highs since 2021.

And as early as late February, Yuanjie Technology released a performance preliminary notice. In 2025, it is expected to achieve operating revenue of 601 million yuan, up 138.50%; it is expected to realize total profit of 214 million yuan; and it is expected to achieve attributable net profit of 191 million yuan—compared with the 6.13 million yuan loss in 2024—equivalent to an increase of more than 32 times.

Chart shows company announcement

The engine behind the blowout growth comes from the data center business. In its announcement, Yuanjie Technology said the growth benefited from the gradual ramp-up in volume of its CW silicon optical source products, driving gross margin from 29.69% in the same period of 2024 to 54.76%, significantly above the industry average.

As data center business “structurally replaces” telecom business, the company’s revenue mix proportion from the data center segment jumped from 15.8% in 2022 to well over half in one go. In the first half of 2025, Yuanjie Technology had already broken through the 100 million yuan threshold. This means Yuanjie Technology has shifted from a traditional “communications component supplier” to a “water seller” on the AI computing power industry chain.

The player acting as a wildcard is its core product, the CW silicon optical source chip. With AI large models’ voracious demand for computing power, internal connectivity rates inside data centers have been evolving at a frantic pace, and CW high-power lasers are a key link for achieving high-bandwidth, low-power consumption connectivity.

Two “bets”:

A 1.251 billion yuan capacity expansion + listing in Hong Kong, Yuanjie Technology seeks another breakthrough

Hongxing Capital Bureau noticed that facing persistently booming market demand, Yuanjie Technology did not settle for the status quo—it launched two “bets.”

On February 9, the company issued two expansion announcements in succession: first, it plans to invest about 1.251 billion yuan to build the Phase II project for a research, development, and production base for optoelectronic communication semiconductor chips and devices; second, it plans to use 98.6204 million yuan of funds raised in excess of the offering to increase the investment amount in the “50G optical chip industrialization construction project.”

One month later, the company threw another major move. On the evening of March 6, Yuanjie Technology announced that it plans to issue H shares overseas and apply for a listing on the main board of the Hong Kong Stock Exchange, building an international capital-operation platform and strengthening its ability to finance in overseas markets. The company will choose an appropriate window within 24 months to complete the listing.

Behind the Hong Kong listing is Yuanjie Technology’s ambition to break away from a “regional survival” situation. Although its domestic market performance has been strong, its overseas revenue has long hovered at the level of millions (in 2024, only 237,400 yuan), seriously mismatched with the global AI computing power allocation landscape. To address this weakness, the company has started building a production base in the United States, with capacity expected to be released in 2026.

However, Yuanjie Technology—now among the thousand-yuan stock club—is not entirely out of the woods. The company still faces multiple challenges.

First is pressure on the capital chain. Although as of the end of the third quarter of 2025, its asset-liability ratio was below 10%, with monetary funds on the books of 933 million yuan, the multi-billion yuan expansion plans still require continuous “infusions.”

Second is the risk of technological iteration. Although CW optical sources have advantages in the 400G/800G era, emerging technologies such as thin-film lithium niobate have gradually begun to surface. In a technology-intensive track like optical chips, a small misstep could allow later entrants to catch up and surpass.

From a loss of 6 million yuan to net profit of 190 million yuan, from a 10-billion yuan market cap to a thousand-yuan stock, Yuanjie Technology completed a remarkable transformation within one year. But in the long-distance race of AI computing power with no finish line, whether it can continue to maintain its lead still depends on the dual race of its technology and production capacity.

According to public information, Yuanjie Technology was founded on January 28, 2013, and listed on the Science and Technology Innovation Board of the Shanghai Stock Exchange on December 21, 2022. The company is a high-tech enterprise that has completed the development of everything—from semiconductor crystal growth, wafer processes, to chip testing and packaging—and has formed large-scale industrialized production.

Wind data shows that since the beginning of this year, Yuanjie Technology’s share price has risen by more than 50%. Based on the closing price on March 20, 2025, the stock’s cumulative gain over the past year is nearly 690%.

By the midday close on March 20, Yuanjie Technology was trading at 1,138.42 yuan per share, up 19.83%, with a total market capitalization of 97.845 billion yuan.

Editor: Xiao Ziqi | Compiled from 21st Century Business Herald, Securities Times, company announcements, etc.

Reviewed by: He Xianju