Zhongji Innolight (300308.SZ) Stock Near Record High as AI Optics Boom Collides With Pentagon Watchlist

Zhongji Innolight Co., Ltd. Class A shares (SZSE: 300308) are starting Thursday, November 27, 2025, perched close to record territory after a dramatic surge in the last session – just as the company finds itself mentioned in a new U.S. Pentagon watchlist proposal.

The AI optics heavyweight closed Wednesday, November 26 at ¥543.22, up 13.25% on the day after trading between ¥470.40 and a fresh 52‑week high of ¥556.88. Turnover reached roughly ¥34 billion, and the stock is now up about 340% year‑to‑date, giving Zhongji a market value just under ¥600 billion. ^[1]

At the same time, overnight U.S. headlines revealed that the Pentagon has recommended Zhongji Innolight for inclusion on its Section 1260H list of Chinese companies deemed to have ties to the country’s military – a reputational overhang that global investors will now have to price alongside the AI boom narrative. ^[2]

Zhongji Innolight stock price snapshot for November 27, 2025

While Thursday’s intraday moves are still unfolding, the picture as of Wednesday’s close (Nov 26, 2025) looks like this:

Last close: ¥543.22
Daily change: +13.25% (from ¥479.66)
Intraday range: ¥470.40 – ¥556.88
Two‑week performance: roughly +10.5%
52‑week range: ¥67.20 – ¥556.88
Market capitalization: about ¥596.5 billion, with Chinese media noting the value has now “broken through ¥600 billion” in trading. ^[3]

According to MarketScreener, Zhongji’s year‑to‑date gain stands at around +339.8%, making it one of the most explosive large‑cap movers on the Shenzhen market in 2025. ^[4]

On valuation, different data providers converge on a “hyper‑growth” profile:

2025 P/E: ~56× (MarketScreener estimate) ^[5]
2026 P/E: ~32× (forward) ^[6]
Trailing P/E: ~63×; Price/Sales (ttm): ~17×; Price/Book: ~20× (Yahoo Finance / Morningstar snapshots) ^[7]
EV/Sales 2025: ~16×; free float: only about 8.4% of the share base. ^[8]

The tiny free float and intense trading interest help explain why Zhongji’s stock can swing nearly 10% a day on average, with daily volatility around 10% over the past week, according to technical‑analysis site StockInvest. ^[9]

AI optics mania pushes Zhongji to historic highs

Chinese financial media describe Wednesday’s move as part of a renewed “optical module” and “Google AI” trade on the A‑share market.

A report from The Paper notes that on November 26, 19 optical‑module concept stocks saw 17 gainers, with sector leader Zhongji Innolight spiking to ¥556.88 before closing at ¥543.22, up 13.25% on the day – a new all‑time high. Turnover approached ¥32.98 billion and the stock’s market cap topped ¥600 billion. ^[10]

Fueling the excitement:

Google’s launch of its Gemini 3 AI model suite on November 18, marketed as its “most intelligent” and most fact‑accurate system so far. ^[11]
Amazon’s announcement of up to $50 billion in investment to expand AI and high‑performance computing capacity for U.S. government clients via new AWS data centers, including ~1.3 GW of additional AI/HPC power. ^[12]

Together, those moves reinforce the narrative that hyperscale AI data centers are still in a multi‑year build‑out phase, intensifying demand for 800G and 1.6T optical modules – Zhongji’s speciality.

A separate industry deep‑dive by 36Kr Europe highlights that:

Zhongji Innolight has ranked No. 1 globally in optical‑module revenue for two years running, with 2024 revenue around US$3.3 billion, up 114% year‑on‑year. ^[13]
The company began small‑scale shipments of 1.6T optical modules in Q2 2025 and expects continuous large‑scale shipments in the second half of 2025, showcasing 1.6T‑DR8 and 2×FR4 OSFP modules built on a 3nm DSP chip. ^[14]

TrendForce separately estimates that the global data‑center interconnect (DCI) market will grow 14.3% in 2025 to over US$40 billion, singling out Zhongji Innolight as one of the key optical‑transceiver suppliers in the DCI mid‑stream alongside Cisco and Nokia. ^[15]

Put simply: Zhongji sits right in the cross‑hairs of AI‑driven demand for faster, denser data‑center networking.

Earnings momentum: AI demand is hitting the income statement

The share price surge isn’t happening in a vacuum.

According to coverage in The Paper, Zhongji’s first three quarters of 2025 delivered: ^[16]

Revenue: ¥25.005 billion, up 44.43% year‑on‑year
Net profit: ¥7.132 billion, up 90.05% year‑on‑year
Q3 2025 net profit: ¥31.37 billion? No – ¥3.137 billion, up ~125% year‑on‑year

The company attributes the performance to:

A rapidly rising mix of high‑end 800G optical modules
Ongoing cost‑reduction and efficiency gains
Early deployment and rising orders for 1.6T products from key customers

Management has told institutional investors that major customers began deploying 1.6T in Q3 and are increasing orders, with broader large‑scale rollouts expected from other clients in 2026–2027. Zhongji is stockpiling chips and expanding capacity in China and overseas to handle that expected wave of orders. ^[17]

This operational story dovetails with global industry data showing:

800G optical modules already in mass deployment
1.6T modules entering an early ramp
LightCounting forecasting that 800G shipments could exceed 5 million units in 2025, before 1.6T becomes mainstream and eventually gives way to 3.2T modules toward 2030. ^[18]

All of that underpins why brokerage houses and industry analysts continue to frame Zhongji as one of the principal beneficiaries of the AI optics up‑cycle.

Massive capital flows: margin financing and ETFs pile in

Momentum around Zhongji Innolight is being magnified by leverage and passive flows.

A funds‑flow report from 21st Century Business Herald shows that on November 26, Zhongji was the No. 1 stock in China by margin‑financing inflows, attracting more than ¥6.0 billion in financing purchases in a single day – far ahead of most peers. ^[19]

At the same time, South China Finance media report that a cloud‑computing ETF (ticker 159890) with a combined weight of over 25% in Eoptolink + Zhongji Innolight surged as much as 1.8% intraday today (Nov 27). In that move, Eoptolink jumped over 10%, while Zhongji rose more than 2% at one point, pushing to another intraday high. ^[20]

In other words:

Leveraged buyers are aggressively chasing the trend
ETF products concentrated in leading optical‑module names are channeling retail and institutional flows into Zhongji almost automatically

This combination of tight free float, margin leverage, and index/ETF demand goes a long way toward explaining how the stock has managed a ~3.4× gain since January without any major pullbacks. ^[21]

Fresh U.S. scrutiny: Pentagon’s Section 1260H list looms

The main new risk factor in today’s news cycle is geopolitical.

Multiple outlets, citing a Bloomberg‑based Reuters report, say that U.S. Deputy Defense Secretary Stephen Feinberg wrote to congressional leaders on October 7 recommending that Alibaba, Baidu, BYD and five other Chinese companies be added to the Pentagon’s Section 1260H list of Chinese military‑linked companies operating in the U.S. ^[22]

Those five others include Zhongji Innolight Co., alongside:

Eoptolink Technology
Hua Hong Semiconductor
RoboSense Technology
WuXi AppTec

Key points from the reporting:

It is not yet clear whether the companies have formally been added to the 1260H list; the Pentagon’s letter sets out a recommendation. ^[23]
The Section 1260H list, last updated in January with 134 companies (including Tencent and CATL), does not itself impose immediate legal bans but acts as a stark warning to U.S. investors and firms about doing business with the named entities. ^[24]
Chinese‑language coverage stresses that Zhongji and fellow optical‑module maker Eoptolink are key suppliers for AI chip clusters and members of Nvidia’s ecosystem, underscoring the global importance of their technology. ^[25]

Chinese outlets in Hong Kong and Taiwan highlight a familiar official response: Beijing opposes what it calls the U.S. practice of “over‑generalizing national security” and compiling “discriminatory lists” that target Chinese companies, promising to “take necessary measures” to safeguard corporate interests. ^[26]

For Zhongji Innolight, the immediate impact is reputational rather than transactional, but the risk is clear:

U.S. institutional investors could face pressure to limit exposure
Some American customers may grow more cautious about procurement, or at least demand additional compliance checks
Any future tightening of U.S. laws around 1260H names could translate into sanctions or investment restrictions

That geopolitical overhang is now part of the Zhongji investment story – just as the company is considering a secondary listing in Hong Kong that could raise US$3 billion or more, according to Bloomberg and later analysis from GuruFocus. ^[27]

Analyst sentiment: price targets race to catch up

Despite the watchlist noise, sell‑side research remains overwhelmingly focused on Zhongji’s growth prospects:

Nomura has repeatedly upgraded its price target this year, most recently to ¥612, based on projected 2026 EPS of ¥20.41 and a 30× P/E multiple. The firm expects Zhongji to take 30–35% of the 800G market and 40–45% of the 1.6T market as shipments ramp. ^[28]
A recent note summarized by 36Kr suggests Nomura has raised its 2026–27 revenue forecasts for Zhongji by 44–53% and net‑profit forecasts by 64–75%, reflecting conviction that the company will be a core beneficiary of the silicon‑photonics and CPO cycle. ^[29]
An analysis aggregated by Edgen Tech says Goldman Sachs has lifted its target price by 62% to around ¥762, citing AI‑driven optical‑module demand and the company’s global leadership in high‑speed transceivers. ^[30]

Technical‑analysis sites such as StockInvest label Zhongji a short‑term “buy candidate” based purely on trend and momentum factors, though they also flag the high day‑to‑day volatility and medium risk profile. ^[31]

It’s important to remember that these targets and ratings are opinions, not guarantees – and nearly all of them presume a continuation of strong AI capex and a benign geopolitical environment.

Fundamentals vs. froth: how stretched is Zhongji Innolight?

From a bottom‑up standpoint, Zhongji Innolight is undeniably a real business with fast‑growing profits:

It designs and manufactures optical communication transceiver modules used in AI data centers and telecom networks, along with intelligent equipment such as motor‑stator coil‑winding machines for appliances, industrial motors and EV drivetrains. ^[32]
Industry rankings show it has become the world’s largest optical‑module vendor by revenue, outpacing long‑time international rivals. ^[33]
The 2025 surge in AI infrastructure spending is visible in its 9‑month results, with net profit nearly doubling year‑on‑year and Q3 earnings up roughly 125%. ^[34]

But the valuation and market behavior clearly signal a speculative layer on top:

Shares trade at ~56× 2025 earnings and ~32× 2026 earnings, with a Price/Sales multiple around 16–17× and Price/Book near 20× – levels that leave little margin for disappointment. ^[35]
Dividend payouts remain modest: StockInvest’s data show total cash dividends in 2025 of ¥0.90 per share, implying a trailing yield well under 0.5% at current prices. ^[36]
The 52‑week low of ¥67.20 underscores just how quickly sentiment has flipped: investors who bought early in the cycle are now sitting on multiples of their original capital. ^[37]

Social‑media chatter adds another layer. A widely circulated blog post on Chinese investor platform Xueqiu claims that Google, facing AI compute bottlenecks, has placed “emergency” additional orders for Zhongji’s high‑speed CPO/optical modules – but this remains market speculation rather than confirmed company guidance. ^[38]

For now, Zhongji is trading as China’s flagship AI‑optics story – part fundamentals, part narrative, and part leverage.

Key things investors are watching after today’s news

Looking beyond today’s headlines, here are the main factors global investors and traders will be tracking around Zhongji Innolight:

Follow‑through after the 13% surge
- Will the ¥540–¥550 zone become a new support level, or was Wednesday’s move a blow‑off top after an extraordinary run?
- Technical services expect wide intraday swings (±8–9% per day) to persist in the near term. ^[39]
Pentagon 1260H deliberations
- Does the U.S. Defense Department formally add Zhongji to the Section 1260H list in its next update?
- If so, do American asset managers, index providers and customers respond with new restrictions or due‑diligence requirements? ^[40]
Hong Kong IPO progress
- Bloomberg has reported that Zhongji has picked banks for a potential Hong Kong listing that could raise US$3 billion or more, while GuruFocus pegs its current valuation around US$63 billion. Any concrete filing or timetable could affect both liquidity and valuation. ^[41]
1.6T and CPO commercialization
- Investors will look for confirmation that 1.6T module shipments are scaling as promised and that Zhongji can maintain a leadership position as the industry moves from 800G to 1.6T and, eventually, 3.2T. ^[42]
AI capex cycle sustainability
- The trend hinges on hyperscaler and telecom spending. Any slowdown in AI data‑center construction by players like Google, Amazon, Meta or Chinese cloud giants would quickly feed back into optical‑module orders. ^[43]
China‑U.S. tech policy
- Further U.S. export controls, investment restrictions or sanctions aimed at Chinese AI hardware could reshape Zhongji’s customer mix and global ambitions – especially if the 1260H designation evolves into something with bite. ^[44]

Bottom line

As of November 27, 2025, Zhongji Innolight’s Class A shares are:

Riding a powerful structural tailwind from AI‑driven demand for high‑speed optical modules and silicon‑photonics/CPO technology
Delivering rapid earnings growth, with profits more than doubling on the back of 800G and early 1.6T shipments
Commanding premium valuations, amplified by low free float, heavy margin financing and concentrated ETF positions
Facing new geopolitical risk, with the U.S. Pentagon openly recommending the company for inclusion on a military‑linked watchlist

For news readers and market participants alike, Zhongji Innolight now sits at the intersection of AI hardware euphoria and great‑power rivalry. That combination can create extraordinary upside – but also calls for a clear view of both fundamental risk and policy risk.

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