Seeking a Hong Kong IPO three years after A-share listing — unpacking the capital scheme behind 12x stock Yuanjie Technology (源杰科技)

Capital leap and the Hong Kong push

Yuanjie Technology (源杰科技) has become one of China’s most eye-catching market stories: listed on the STAR Market (科创板) in December 2022 at an IPO price of ¥100.66, its share price has surged more than 12-fold and briefly topped ¥1,200 this March, giving the company a market value approaching ¥946亿元 (roughly US$13–14 billion). Now the firm has filed a Hong Kong prospectus seeking a Main Board IPO just three years after its A‑share debut. The angle is clear: convert domestic valuation momentum into cross‑border capital to fund an aggressive capacity build-out.

Why the rush to Hong Kong? AI demand meets IDM capital intensity

Why the hurry? Yuanjie bills itself as a vertically integrated IDM for high‑speed optical chips — design, wafer fabrication, packaging and test — a model that shortens lead times but demands heavy, fast capital investment. It has been reported that the company plans to use IPO proceeds to scale R&D and production lines, expand overseas production (including U.S. and Singapore subsidiaries) and raise its 50G/100G product industrialisation budget from earlier estimates to billions of RMB (projects cited include a ¥12.51 billion second‑phase facility and an increased ¥7.57 billion allocation for 50G chip industrialisation). The corporate logic tracks the AI compute boom: demand from data centres for 800G–1.6T optical modules has surged and, reportedly, Yuanjie’s chips have already entered the supply chains of several major optical module makers and indirectly into North American cloud provider ecosystems — but political and supply‑chain frictions elevate urgency. It has also been reported that Nvidia’s strategic deals with Lumentum and Coherent, which include investment and procurement commitments, will intensify competition for advanced laser component capacity.

Valuation euphoria and the sustainability question

The reward has been enormous for early backers and founders — founder Zhang Xingang (张欣刚) and his sister Zhang Xinying have seen combined stake value in the billions — but risk is obvious. Yuanjie’s 2025 revenue was ¥6.01亿元 with net profit ¥1.91亿元, yet the stock trades at a trailing P/E of about 495x, and the company faces high customer concentration (top five customers >70% of sales), unproven scale for higher‑end 100G/200G products, and an industry‑wide expansion that could precipitate price pressure. History reminds investors that A‑share “thousand‑yuan” stock rallies can be volatile. So is the Hong Kong IPO a bold, necessary lever to secure global capacity fast — or an attempt to turn a domestic valuation wave into irreversible expansion before competition and cyclicality catch up? The answer will hinge on sustained execution, not just market appetite.