Changjin Photonics rushes to list on the STAR Market: Supported by Hubble Investment and China Mobile Fund, customer competition concerns remain to be addressed

On March 27, Wuhan Changjin Photon Technology Co., Ltd. (hereinafter referred to as “Changjin Photon”) will face a significant test with its IPO (Initial Public Offering) on the Sci-Tech Innovation Board.

Changjin Photon is a manufacturer of specialty optical fibers, led by Professor Li Jinyan from Huazhong University of Science and Technology, with shareholders including Hubble Investment and China Mobile’s Zhongyi Fund. The prospectus (conference draft) (hereinafter referred to as “prospectus”) shows that from 2023 to 2025 (hereinafter referred to as “reporting period”), Changjin Photon expects continuous growth in revenue and net profit.

However, reporters from the “Daily Economic News” (hereinafter referred to as “Daily Economic News reporters”) noticed that the long-standing intertwining state of “industry-university-research” between Changjin Photon and Huazhong University of Science and Technology has raised questions about its independent research and development capabilities. At the same time, several core customers also have in-house production capabilities, posing a potential risk of “customers becoming competitors.” Additionally, with core product prices continuing to decline and gross profit margins under pressure, Changjin Photon’s profit resilience is being tested.

Industry-University-Research Boundaries: How to Clarify the Ownership of Achievements Held by Professors and University Positions?

Changjin Photon was founded in 2012. The actual controller and chairman, Li Jinyan, graduated from the Shanghai Institute of Optics and Fine Mechanics, Chinese Academy of Sciences, and has previously worked at FiberHome Telecommunications Technologies Co., Ltd. and Fujikura. Since November 2008, he has served as a professor and doctoral supervisor at the Wuhan National Research Center for Optoelectronics at Huazhong University of Science and Technology.

Currently, Li Jinyan indirectly holds 17.93% of Changjin Photon’s equity through Changhexin, Zhiyuan No. 1, and Zhiyuan No. 2, and controls 35.84% of the voting rights of the company. To further consolidate control, Li Jinyan has also signed a concerted action agreement with the company’s director and general manager, Liu Changbo, collectively controlling 43.12% of the voting rights of Changjin Photon.

As a senior expert in the field of specialty optical fibers, Li Jinyan’s academic reputation has provided significant endorsement for the company’s early development, but the blurred boundaries with Huazhong University of Science and Technology have also raised external doubts. The prospectus shows that Li Jinyan and the company’s director, vice general manager, and financial head, Li Haiqing, have long held dual positions in both academia and the enterprise, and they even entrusted Wang Shanzhen and Liu Changbo to hold company shares on their behalf. Additionally, faculty members from Huazhong University of Science and Technology, Xing Yingbin and Peng Jinggang, have also served as consultants for Changjin Photon.

It was not until July 2025 that Li Jinyan processed the procedures for leaving his post to start a business. In the same month, Li Haiqing left Huazhong University of Science and Technology. Xing Yingbin and Peng Jinggang stopped working part-time at Changjin Photon starting in June 2024.

The ownership boundaries of research achievements are also sensitive. By the end of 2025, Changjin Photon holds 37 invention patents, of which 12 were assigned from Huazhong University of Science and Technology.

In this regard, regulatory authorities have sent inquiries, requiring Changjin Photon to explain the specific circumstances of the company’s use of scientific and technological achievements during its establishment at Huazhong University of Science and Technology and the relationship with the assigned invention patents, as well as to analyze whether there are effective measures to avoid technical disputes based on the shareholding situation of Huazhong University faculty members in the company.

On March 25, Changjin Photon responded to Daily Economic News reporters, stating that the company attaches great importance to building independent research and development capabilities. On one hand, the relevant patent assignments have gone through necessary legal procedures, are lawful and compliant, and there are no disputes over property rights. On the other hand, from 2023 to 2025, the company’s cumulative R&D investment exceeded 84 million yuan, accounting for about 14% of revenue, forming a self-controllable core technology system.

Regarding the issue of university positions, Changjin Photon stated that the relevant personnel’s positions strictly comply with relevant laws and regulations, university regulations, and the “Articles of Association.” The company has established a sound governance structure to ensure the independence of business decision-making, and there are no instances of illegal transfer of university job achievements.

Customers and Competitors: How to Maintain Order Stability with Core Customers Having In-house Production Capabilities?

After more than a decade of development, Changjin Photon has gathered a luxurious lineup of shareholders. Zhongyi Fund and Hubble Investment hold 5.26% and 3.80% of the shares, respectively, ranking as the sixth and seventh largest shareholders of the company; the Sci-Tech Innovation Board listed company, Jepu Te, holds 12.24%, making it the second-largest shareholder.

However, the dual identity of Changjin Photon’s shareholders and customers has brought the fairness of related party transactions into focus. Jepu Te is not only the second-largest shareholder but also one of the top five core customers of the company during the reporting period, with sales accounting for over 9%. During the reporting period, the company applied for exemption from information disclosure for the price comparison of the same product sold to Jepu Te and unrelated third parties. However, the company admitted that the price of most products sold to Jepu Te is lower than that of unrelated third parties.

In response, Changjin Photon stated to Daily Economic News reporters that the cooperation with Jepu Te is based on real commercial backgrounds and necessities. Jepu Te has a demand for the localization of core raw material specialty optical fibers, and the company is one of the few domestic manufacturers that can stably supply high-performance, diverse specialty optical fibers, making the cooperation a result of mutual market selection.

Regarding pricing, Changjin Photon stated that the transaction pricing with Jepu Te follows market principles and is consistent with the pricing mechanism for other non-related party customers, all of which are negotiated based on factors such as procurement scale, product model, and cooperation history, and there is no scenario of interest bias. The company has fulfilled the review procedures as required to ensure compliance with related party transactions.

A greater concern is that Changjin Photon’s major customers may become competitors at any time. Chuangxin Laser and Ruike Laser are both core customers of Changjin Photon, ranking as the first and second largest customers of the company in 2023 and 2025, respectively. In 2025, revenue from these two customers accounted for 33.58% of Changjin Photon’s total revenue. Additionally, Changfei Fiber’s subsidiary, Changfei Guangfang, is also a customer of Changjin Photon.

However, Chuangxin Laser, Ruike Laser, and Changfei Guangfang all have the capacity to produce rare-earth-doped fibers in-house. Chuangxin Laser has been known to purchase specialty optical fibers from Changfei Guangfang, while Changfei Guangfang has already reduced its procurement scale from Changjin Photon after acquiring self-supply capabilities. Furthermore, several companies are purchasing from Changjin Photon while also procuring from Wuhan Ruixin, a subsidiary of Ruike Laser, or from Changfei Guangfang.

In response, Changjin Photon explained that it has formed a long-term stable strategic partnership with core customers based on advantages in R&D technology, talent teams, customer resources, and mass production processes. However, the company also admitted in the prospectus that if Ruike Laser further increases its self-supply ratio, Chuangxin Laser expands its own production capacity to replace external procurement, or other downstream laser manufacturers turn to self-supply, this will reduce the market space for independent third-party manufacturers, including the company.

Profit Breakthrough Battle: How to Resist Cyclical Fluctuations with a Single Structure Amid Continuous Price Decline?

During the reporting period, Changjin Photon experienced rapid growth, with revenue increasing from approximately 145 million yuan in 2023 to approximately 247 million yuan in 2025; net profit increased from approximately 54.66 million yuan to approximately 95.64 million yuan.

However, Daily Economic News reporters noted that behind what appears to be good performance, Changjin Photon faces serious issues of “single product structure” and “concentration of application fields”—the revenue from rare-earth-doped fibers has consistently accounted for over 85%; downstream applications are concentrated in advanced manufacturing and optical communication fields, with both accounting for over 80% of total revenue. This business model of “putting all eggs in one basket” makes the company sensitive to fluctuations in a single industry cycle.

Moreover, the core product prices of Changjin Photon are currently experiencing a downward trend. As the main product, the revenue contribution from ytterbium-doped fibers has consistently exceeded 40% during the reporting period. The average selling price of this product in 2025 has dropped nearly 20% compared to 2023, down to 19.93 yuan/meter.

Additionally, during the reporting period, the sales revenue of Changjin Photon’s erbium-doped fibers was 17.19 million yuan, 44.42 million yuan, and 34.74 million yuan, accounting for 11.89%, 23.18%, and 14.14% of total revenue, respectively. However, the price fluctuations of erbium-doped fibers are even more severe, with the average price in 2025 plummeting by 21.19% year-on-year, down to 29.53 yuan/meter. The prospectus attributes this price decline to “normal price adjustments based on cost reduction demands in the supply chain for mature products.”

For upstream material suppliers, “increased volume” should be favorable, but with prices plummeting, it indicates that the company is losing pricing power. As industry competition intensifies, downstream laser manufacturers are constantly lowering costs to capture market share, and this pressure will inevitably pass on to upstream optical fiber suppliers.

Signs of declining profitability have already emerged. Although Changjin Photon maintains a high gross profit margin, its main business gross profit margin has decreased from 69.31% in 2023 to 65.06% in 2025, a decline of over 4 percentage points. Meanwhile, the company’s revenue growth rate has dropped from 32.58% in 2024 to 28.79% in 2025.

For the first quarter of 2026, Changjin Photon expects a year-on-year revenue growth of 16% to 23%, but the year-on-year growth rate of net profit attributable to the parent company is only 2.49% to 8.02%. The company explained that this is mainly affected by the Spring Festival holiday and adjustments in customer procurement schedules. In the face of downward price pressures, Changjin Photon stated that it will enhance its bargaining power and profitability through continuous technological innovation, optimizing product structure, deepening domestic substitution, reducing costs, expanding application fields, and developing new growth points.

Disclaimer: The content and data in this article are for reference only and do not constitute investment advice. Please verify before use. Any actions taken based on this information are at your own risk.

Daily Economic News