New Stock Outlook | From telecom support to AI light interconnection, can Linktel Technologies achieve a significant scale leap through listing in Hong Kong Stock Exchange?

Against the backdrop of the continuing surge in global artificial intelligence infrastructure investment, optical modules, as the core devices for high-speed interconnection within data centers, are experiencing an unprecedented boom in the industry. Market research firm Light Counting predicts that by 2025, global optical module sales will exceed $23 billion, a year-on-year growth of around 50%, with Ethernet optical module sales for data center interconnection accounting for $17 billion. It is in this industry wave that Wuhan Linktel Technologies Co., Ltd. (hereinafter referred to as "Linktel Technologies" (301205.SZ)) recently formally submitted an application for listing on the main board of the Hong Kong Stock Exchange, embarking on a new capital journey of "A+H" dual listing. This optical module company, which already listed on the ChiNext board of the Shenzhen Stock Exchange in September 2022, has some highlights worth noting as it ventures into the Hong Kong stock market. From being a telecommunications support player to an AI optical interconnect player Founded in 2011, Linktel Technologies is headquartered in Wuhan and initially focused on the telecommunications market, providing optical module products to communication equipment manufacturers. After accumulating over ten years of technical expertise in the telecommunications field, the company successfully expanded its business to the data communications market, transitioning from a traditional telecommunications support player to a provider of AI data center optical interconnect solutions. According to Frost & Sullivan, by revenue in 2025, Linktel Technologies ranks 11th among global optical module suppliers and 8th among Chinese optical module suppliers, with a global market share of 0.8%. From a product matrix perspective, Linktel Technologies has built a complete product line covering 400G, 800G, and 1.6T high-speed optical modules. The company is one of the first market participants to develop, mass produce, and commercialize 400G and 800G optical modules, and one of the few able to design and produce 1.6T optical modules. In terms of next-generation technology reserves, the company is developing 12.8T ultra-high-density pluggable optical modules (XPO), 6.4T and 7.2T near-packaged optics (NPO) architectures, and technologies related to the co-packaged optics (CPO) architecture. This "mass produce a generation, develop a generation, reserve a generation" product strategy allows it to maintain the initiative in the AI-driven technology iteration race. In terms of production capacity layout, Linktel Technologies has adopted a dual production base strategy in China and Malaysia. As of April 30, 2026, the design capacity for 800G and above optical modules has been increased to approximately 1.6 million units, with a compound annual growth rate of around 438.5% from 2023 to 2025. The early setup of the Malaysian base gives it a certain first-mover advantage in responding to global trade friction and customer demand for diversified supply chains, with the North American market revenue share climbing from 42% in 2023 to 67.9% in 2025, where the US market contributes 67.7% of total revenue, enough to confirm the market value of global production capacity layout globalization. Explosive growth behind In terms of financial performance, Linktel Technologies' growth trajectory over the past three years has shown clear "AI-driven" characteristics. From 2023 to 2025, the company's revenues were RMB 606 million, RMB 890 million, and RMB 1.254 billion, with a compound annual growth rate of about 43.8%. Net profit jumped from RMB 26.48 million in 2023 to RMB 103 million in 2025, successfully surpassing the hundred million yuan mark. The gross profit margin also steadily increased, from 18.6% in 2023 to 23.2% in 2024, further reaching 24.4% in 2025. This improvement in profitability stems from the continuous upgrading of product structures - the revenue share of 400G and above high-speed optical modules soared from 9.5% in 2023 to 55.0% in 2025, with the large-scale production of high value-added products effectively lifting the overall profit level. In terms of growth performance in the segmented track, Linktel Technologies' data is more eye-catching. Calculating by revenue from 400G and above high-speed optical modules, the compound annual growth rate from 2023 to 2025 reached 247.6%, ranking third in growth among the top 11 global suppliers; and when calculated by revenue from 800G and above high-speed optical modules, the compound annual growth rate reached a staggering 1069.0%, ranking first among the top ten global suppliers. It can be said that in the AI-driven optical module upgrade cycle, although Linktel Technologies' scale is not as large as the leading manufacturers, its pursuit speed is remarkable. However, the structural concerns revealed in the prospectus cannot be ignored. Firstly, there was a significant decline in performance in the first quarter of 2026, with operating income of RMB 213 million, a decrease of 9.56% year-on-year, and net profit attributable to the parent company of only RMB 3.05 million, a drastic drop of 83.71%. The company explained that it was mainly affected by the transfer of production capacity, with several production lines being relocated from Wuhan to Penang, Malaysia, resulting in temporary production constraints, as well as disturbances from key material shortages such as optical chips and exchange rate fluctuations. This reflects that there is still considerable flexibility in coordinating operational rhythms during rapid capacity expansion. Secondly, customer concentration continues to rise. The revenue share of the top five customers increased from 46.8% in 2023 to 65.7% in 2025, with the share of the largest customer increasing from 16.6% to 22.7% over the same period. While deep ties with major clients in the optical module industry can help stabilize orders, excessive concentration also means weakened bargaining power and amplified performance volatility. It is understood that the gross profit margin of 400G and above optical modules in 2025 has dropped from 32.2% in 2024 to 24.6%, with the company admitting to "adjusting prices for certain high-speed optical modules to cope with market competition." Furthermore, cash flow pressure cannot be ignored. The company's operating cash flow turned negative in 2025, recording -RMB 206 million, with year-end cash on hand of only RMB 180 million, while inventories surged from RMB 366 million to RMB 962 million, and net trade receivables increased to RMB 235 million. During the high-speed expansion phase, the continuous consumption of operating funds places higher demands on financing capabilities, explaining the urgency of the company launching an H-share IPO at this time. Opportunities and challenges coexist From a market fundamentals perspective, the long-term growth certainty of the optical module market is relatively high. Frost & Sullivan predicts that the global optical module market will increase from RMB 161.8 billion in 2025 to RMB 503.4 billion in 2030, with a compound annual growth rate of 25.5%; with the 800G and above products expected to have a compound annual growth rate of 47.1% from 2025 to 2030. With the continued increase in AI infrastructure investment from RMB 2.3929 trillion in 2025 to RMB 6.5265 trillion in 2030, the optical module industry is provided with solid downstream demand support. Looking at the global industry landscape, a cluster effect has formed among Chinese optical module players. Among the top ten optical module manufacturers globally, Chinese companies occupy seven seats, with an overall market share of over 70%, highlighting China's core supply position in the global AI infrastructure boom. As an important member of this camp, although Linktel Technologies' current revenue scale still has a gap with the leading manufacturers, this precisely means that the company has significant growth elasticity and catching-up space. Under the business model of "technology-driven, stepped-up production" in the optical module industry, once it enters the qualified supplier system of mainstream cloud service providers and achieves batch delivery, revenue volume is expected to achieve nonlinear growth. The purchasing cost disadvantage brought by the scale gap objectively exists, with the proportion of raw material costs in sales costs increasing from 68.8% in 2023 to 81.9% in 2025, and the flexible pricing pressure of high-end optical chips and DSP chips indeed exerting some squeeze on profit margins. However, this pressure is being offset by multiple positive factors: firstly, as the rapid release of production capacity for 800G and above products and the continuous increase in shipment volume, the bargaining power with upstream suppliers will gradually strengthen; secondly, the ramp-up of production capacity at the Malaysian production base and the increase in local procurement ratio help optimize the global supply chain cost structure; thirdly, the continuous investment in silicon photonics technology by the company will gradually reduce its external dependency on traditional EML optical chips, fundamentally improving the cost structure. It can be said that the current gap in scale is both a challenge and the biggest expected difference in profitability improvement for Linktel Technologies in the future. Overall, at a time when the demand for AI computing power has not peaked, Linktel Technologies, with its flexible stance, aggressive strategy, and deep technical expertise, is poised to carve out a larger slice of the global optical module landscape. For investors, this is not only an opportunity to share in the AI dividend but also an observation experiment on whether Chinese hard tech companies can continue to break through in the high-end manufacturing field. In the future, with the implementation of the proceeds and the release of Malaysian production capacity, whether Linktel Technologies can translate "high growth" into "high-quality" cash flow will be key to testing its quality.