HK/China Equity Long-Short

Osbert Tang, CFA

Equity Capital Markets

Zhongji InnoLight / Equity Capital Markets

<ul>
<li>The IPO of <a href="https://www.smartkarma.com/entities/zhongji-innolight" target="_blank" data-smartkarma-citation="entities:55331:1" rel="noopener">Zhongji InnoLight (3308 HK)</a>, a leading global provider of optical interconnect solutions, which seeks HK$54.5bn, is the largest since 2019.</li>
<li>Its FY25-28F EPS CAGR will reach 89.8%, underpinned by the jump in revenue and expansion in margin. Its 1Q26 net profit has already surged by 262.3%.</li>
<li>The IPO is priced at a 17.7% HA discount. At a HK$1.2trn market capitalisation, pegging it to its A-share will give a price of HK$1,227, or a 21.5% upside.</li>
</ul>


The IPO of Zhongji InnoLight (3308 HK), a leading global provider of optical interconnect solutions, which seeks HK$54.5bn, is the largest since 2019.
Its FY25-28F EPS CAGR will reach 89.8%, underpinned by the jump in revenue and expansion in margin. Its 1Q26 net profit has already surged by 262.3%.
The IPO is priced at a 17.7% HA discount. At a HK$1.2trn market capitalisation, pegging it to its A-share will give a price of HK$1,227, or a 21.5% upside.


Zhongji InnoLight (3308 HK) IPO: Assessing the Valuation

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

<ul>
<li>FS adopts a unique light-asset business model of "R&amp;D design + outsourcing production + direct sales platform", which leads to higher profit margin than traditional channel sales vendors.</li>
<li>FS once failed in A-Share IPO and received penalty in 2025. Internal control defects are the "Achilles heel", which makes us worry whether FS has the problem of "inflating revenue". </li>
<li>Although FS has positive performance growth, the uncertainty of Sino-US relations and exchange rate risks may put pressure on profitability. Valuation of FS could be lower than peers. </li>
</ul>


FS adopts a unique light-asset business model of "R&amp;D design + outsourcing production + direct sales platform", which leads to higher profit margin than traditional channel sales vendors.
FS once failed in A-Share IPO and received penalty in 2025. Internal control defects are the "Achilles heel", which makes us worry whether FS has the problem of "inflating revenue". 
Although FS has positive performance growth, the uncertainty of Sino-US relations and exchange rate risks may put pressure on profitability. Valuation of FS could be lower than peers. 


Pre-IPO FS.COM - The Concerns Behind the Business Model and the Outlook

China

T&S Communications Co., Ltd. manufactures optic fiber products. The Company designs, produces, and sells ceramic ferrule, connectors, separators, and other related equipment. T&S Communications serves customers throughout China.

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T&S Communications Co Ltd (300570 CH)

Zhongji InnoLight (3308 HK) IPO: Assessing the Valuation

Zhongji InnoLight's IPO seeks HK$54.5bn, with strong growth projections. Priced at a 17.7% HA discount, there is potential for 21.5% upside if we...

Osbert Tang, CFA

Pre-IPO FS.COM - The Concerns Behind the Business Model and the Outlook

FS's unique light-asset model leads to higher profit margin, but internal control defects/exchange rate risks could impact profitability and...

Xinyao (Criss) Wang

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Zhongji InnoLight (3308 HK) IPO: Assessing the Valuation

​Zhongji InnoLight's IPO seeks HK$54.5bn, with strong growth projections. Priced at a 17.7% HA discount, there is potential for 21.5% upside if we...

Osbert Tang, CFA

Pre-IPO FS.COM - The Concerns Behind the Business Model and the Outlook

​FS's unique light-asset model leads to higher profit margin, but internal control defects/exchange rate risks could impact profitability and...

Xinyao (Criss) Wang

Zhongji InnoLight's IPO seeks HK$54.5bn, with strong growth projections. Priced at a 17.7% HA discount, there is potential for 21.5% upside if we...

FS's unique light-asset model leads to higher profit margin, but internal control defects/exchange rate risks could impact profitability and...