Introduction: Dongbai Group is preparing to invest CNY 316 million to cross over into the optical chip sector.
A listed company that has been in the business of department stores, shopping malls, and warehousing and logistics for many years has suddenly decided to buy an optical chip company.
On the evening of October 11, Dongbai Group disclosed that its wholly-owned subsidiary, Dongbai Chuangzhi, plans to acquire a 52.6667% equity stake in Hangzhou Kuailing Optoelectronic Technology Co., Ltd. for CNY 316 million. Upon completion of the transaction, Dongbai Group will gain control of Kuailing Optoelectronics, and Kuailing Optoelectronics and its wholly-owned subsidiary, Zhejiang Guangte Technology, will be included in the consolidated statements of the listed company.
The market showed almost no hesitation the next day. During the morning trading session on October 12, Dongbai Group's stock hit the daily limit up with a straight-line surge.
In a striking contrast, on the very evening the transaction announcement was disclosed, the SSE (Shanghai Stock Exchange) had already issued a regulatory work letter to the company, with the handling matter being this asset acquisition.
The capital market's choice is straightforward: it did not first ask why a department store company wants to enter the semiconductor industry, but rather cast a vote for the new label of "optical chips" first.
This is precisely what makes this transaction most worth discussing.
What Dongbai Group is buying is not a mature and profitable chip company, but an enterprise that was still losing money in the first eight months of 2026, with some high-speed products still in the customer validation stage. Yet, the overall valuation it has given to this company reaches CNY 600 million.
This means that the CNY 316 million paid by Dongbai Group is essentially paying in advance for the growth of Kuailing Optoelectronics over the next few years.
The question thus becomes simple and sharp: why is a commercial retail company willing to spend such a sum to enter the optical chip sector at this point in time?
Under the Dilemma of Retail Competition for Existing Market Share
Dongbai Group is not hastily seeking a new story just because its main business has suddenly lost speed.
From a financial data perspective, this is still a commercial company capable of making stable profits.
In the first half of 2026, Dongbai Group's operating revenue was CNY 944 million, a year-on-year increase of 1.68%; the net profit attributable to shareholders of the listed company was CNY 74.73 million, a year-on-year increase of 4.44%. Among these, commercial retail revenue was CNY 793 million, and warehousing and logistics revenue was about CNY 91.63 million. In other words, over 80% of Dongbai Group's revenue still comes from traditional retail business.
It holds commercial projects such as Dongbai Center and Lanzhou Center, and also operates warehousing and logistics assets.
The real problem is not whether there is profit, but how fast growth can still be.
In 2025, Dongbai Group achieved an operating revenue of CNY 1.847 billion, a year-on-year increase of 1.71%. During the same period, the main business revenue of commercial retail was CNY 1.544 billion, a year-on-year decrease of 1.04%. The explanation given by the company in its annual report is that the retail industry has entered a stage of competition for existing market share, and market competition has intensified. Therefore, it needs to continue to rely on store adjustments, the first-store economy, and consumption scenario innovation to maintain growth.
The common characteristic of such businesses is maturity.
It can generate cash flow, and profits can be increased by improving sales per square meter, enhancing customer traffic, and optimizing brand mix. However, it is difficult to achieve a completely different growth slope within a few years like the technology industry.
Thus, the "second growth curve" begins to become important.
The external environment has also provided listed companies with greater institutional space for cross-industry M&A.
The "Six Measures for Mergers and Acquisitions" released by the CSRC (China Securities Regulatory Commission) in 2024 explicitly proposed supporting standardized listed companies in carrying out cross-industry M&A in line with commercial logic around industrial transformation and upgrading, and seeking the second growth curve. At the same time, it supports listed companies in acquiring unprofitable assets that can supplement and strengthen the supply chain and improve key technological levels.
Dongbai Group itself also explicitly mentioned in the announcement that this transaction is to seize the policy opportunities of developing new quality productive forces, promoting industrial transformation and upgrading, and the capital market supporting listed companies in deploying emerging industries, and to enter the optical chip field through M&A to cultivate new business growth points.
Therefore, this is not a cross-industry transaction without any background at all.
Policies allow traditional listed companies to seek the second growth curve through M&A, and AI has pushed optical communication to one of the most watched industrial positions in the capital market.
Dongbai Group simply put these two conditions together.
What really excites the market is that what it bought is not an ordinary chip, but a photodetector chip related to high-speed optical communication.
Kuailing Optoelectronics was founded in 2014. It mainly assumes the functions of a shareholding and financing platform, and its actual business is operated by its wholly-owned subsidiary, Zhejiang Guangte Technology.
This company mainly produces InP (Indium Phosphide)-based photodetector chips. Its products include PIN-PD, APD, and MPD, which are applied in fields such as LiDAR, optical communication, and gas detection, and it adopts the IDM (Integrated Device Manufacturer) model.
Among them, the business that is truly connected to AI data centers is optical communication.
After optical signals enter optical modules through optical fibers, they need to undergo optoelectronic conversion by photodetector chips before entering backend circuit processing. As the number of AI servers increases, the data transmission pressure inside data centers rises, and high-speed optical modules are also rapidly upgrading.
At the CIOE (China International Optoelectronic Exposition) held in September this year, 800G optical modules have gradually been shipped in batches, and the main products displayed by leading enterprises have begun to extend to 1.6T or even higher rates. Reporters from the Securities Times also mentioned during on-site interviews that some enterprises are facing a situation where they "cannot accept more orders," and the insufficient supply of core equipment and chips has become a constraining factor for capacity expansion in some industrial chains.
Kuailing Optoelectronics is trying to enter this round of industrial upgrading.
The announcement shows that the company's past revenue in the field of optical communication mainly came from low-speed products, but it has begun to deploy high-speed photodetector chips. The single-channel 100G PD chip passed the certification of some customers in 2026 and obtained small-batch orders of about CNY 13 million; the single-channel 200G PD and 50G APD chips have been sent to multiple optical module or leading communication customers for sampling, and are currently still in the testing and validation stage.
In other words, what Dongbai Group values is not the money Kuailing Optoelectronics has already made today.
What it is really betting on is something else: whether these high-speed products currently under validation can enter more customer supply chains in the future and form batch revenue.
What Makes Kuailing Optoelectronics Worth It?
If we remove the words "AI," "optical communication," and "high-speed" for now, Kuailing Optoelectronics' current financial data is not enough to support an easy valuation story.
In 2025, Kuailing Optoelectronics' operating revenue was CNY 39.7613 million, with a net loss of CNY 15.0722 million.
In the first eight months of 2026, the company achieved an operating revenue of CNY 34.8693 million, still losing CNY 2.517 million.
As of August 31, 2026, the book value of its total shareholders' equity was CNY 70.7697 million.
However, in this transaction, the appraised value of the total shareholders' equity given by the appraisal institution reached CNY 611.7 million.
The appraisal appreciation rate is 764.35%.
Ultimately, the two parties to the transaction used CNY 600 million as the overall comprehensive valuation of 100% equity of Kuailing Optoelectronics. Dongbai Group acquired a 52.6667% equity stake, with a tentative consideration of CNY 316 million.
What does this valuation mean?
Calculated based on the 2025 revenue of CNY 39.7613 million, the CNY 600 million valuation is approximately 15 times its operating revenue last year.
Since Kuailing Optoelectronics is still losing money at present, the traditional P/E ratio is meaningless. Investors and the acquirer can only base the valuation on future profits.
And Dongbai Group has set a quite clear, yet also quite steep, path for this future.
According to the transaction arrangement, Ye Jinlin, the founder of Kuailing Optoelectronics, committed that the company's net profit attributable to the parent company after deducting non-recurring gains and losses realized in 2027, 2028, and 2029 will be no less than CNY 10 million, CNY 40 million, and CNY 100 million respectively, with a cumulative total of no less than CNY 150 million over the three years.
If the final cumulative actual profit is lower than the commitment, the transaction valuation will be reduced according to the agreed formula, and compensation measures such as equity and cash will be initiated.
What is really worth noting about these figures is not the CNY 150 million over three years, but the profit curve.
In the first eight months of 2026, Kuailing Optoelectronics was still losing CNY 2.517 million.
By 2027, it needs to make a profit of CNY 10 million.
In 2028, it needs to increase the profit to CNY 40 million.
In 2029, it needs to achieve CNY 100 million.
In other words, the price Dongbai Group is paying now is largely based on Kuailing Optoelectronics' ability to quickly complete three leaps: from loss to profit, from small-batch supply to scale sales, and then from a revenue scale of tens of millions of yuan to a larger-scale high-speed optical communication market.
This is also why customer validation for products such as 100G and 200G is so important.
If these products can only be "made," but fail to enter customer supply chains on a large scale, then the CNY 600 million valuation will lack sufficient profit support.
Conversely, if 100G is successfully scaled up, high-speed products such as 200G pass certification, and AI data centers continue to drive up the demand for high-speed optical modules, today's seemingly high valuation may be digested by growth in the next few years.
Therefore, there is not much complexity in this transaction.
Dongbai Group is using today's cash to buy the potential profits that Kuailing Optoelectronics may generate after 2027.
Spending CNY 316 Million to Buy a Ticket to the Optical Chip Industry
But there is another issue that is more important than the valuation level.
After Dongbai Group buys Kuailing Optoelectronics, the actual funds it needs to pay may be more than just CNY 316 million.
The announcement explicitly mentions that after the completion of this transaction, Dongbai Group will continue to support the business development of the target company through various means such as loans and capital increases, according to the funding needs of Kuailing Optoelectronics for subsequent new capacity construction, etc. The specific amount has not yet been determined.
This point is crucial.
Kuailing Optoelectronics adopts the IDM model.
This means it is not an asset-light company that simply relies on engineers to design chips and then outsources all production processes. Equipment investment, production processes, R&D upgrades, and capacity expansion all require continuous capital expenditures.
Therefore, CNY 316 million is more like an entry ticket.
What really determines the final return on investment of this M&A is how much more Dongbai Group needs to invest in this chip company after the transaction is completed, and whether these new investments can be exchanged for orders and profits.
And from the perspective of Dongbai Group's own financial situation, this is not an expenditure that can be completely ignored.
As of the end of June 2026, Dongbai Group's cash on hand was about CNY 687 million, and short-term borrowings were about CNY 1.978 billion; the scale of related loans, including short-term borrowings, other borrowings, long-term borrowings due within one year, and long-term borrowings, was about CNY 6.369 billion.
CNY 316 million is equivalent to about 4.2 times Dongbai Group's net profit attributable to the parent company in the first half of 2026, and also close to 46% of its cash on hand at the end of June.
And this is just the equity acquisition price.
Future capacity construction may also continue to require money.
This is also one of the most difficult problems to solve when traditional enterprises cross over into the semiconductor industry.
Capital can buy equity, but it cannot automatically buy industrial capabilities.
In the past, Dongbai Group was good at commercial project operation, retail management, warehousing and logistics, and asset management. After entering optical chips, it faces a completely different set of operating systems: product iteration, customer certification, yield rate, equipment investment, stability of core R&D personnel, and technology route judgment.
Dongbai Group itself also admitted in the risk warning that the listed company is not currently engaged in related businesses, nor does it have reserves of related R&D and technical personnel, so there are risks of cross-industry operation and integration management.
This also makes the regulatory work letter issued by the SSE that evening seem not unexpected.
Because policy support for cross-industry M&A does not mean that all cross-industry transactions are naturally reasonable.
The CSRC's "Six Measures for Mergers and Acquisitions" does encourage listed companies to seek the second growth curve around industrial transformation and upgrading, and also allows the acquisition of emerging industry assets that are not yet profitable. But there is one premise that has never changed: the transaction must conform to commercial logic.
What Dongbai Group needs to prove now is precisely this point.
Kuailing Optoelectronics is not a company that only has a PPT.
It has real products, an IDM production line, and has already generated revenue in the fields of LiDAR, gas detection, and optical communication; high-speed products are indeed advancing customer certification.
But the risks are equally real.
The company's current revenue scale is still less than CNY 50 million, and it has not yet turned a profit. Most high-speed optical communication products are still in the small-batch supply or validation stage. Customer concentration is also not low: in 2025 and the first eight months of 2026, the revenue proportion of the top five customers was 79.35% and 59.63% respectively, and the revenue proportion of the largest customer reached 68.18% and 42.74% respectively.
Therefore, whether this transaction is ultimately worthwhile cannot be judged by the limit-up on October 12.
What needs to be seen is three years later.
If 100G products are successfully scaled up, 200G products enter leading customers, and Kuailing Optoelectronics moves from loss to CNY 100 million profit as planned, then today's CNY 600 million valuation will gradually be explained by industrial fundamentals.
If product validation is delayed, customer orders are lower than expected, or the technology route changes, then the 764.35% appraisal appreciation may ultimately reappear in Dongbai Group's financial statements in another way—goodwill impairment.
This may be the truly interesting part of this acquisition.
In the past, investors in Dongbai Group cared about shopping mall customer traffic, sales per square meter, rent, consumption prosperity, and warehousing occupancy rate.
From now on, they also need to learn to understand another completely different set of language:
PIN-PD, APD, 100G, 200G, Indium Phosphide, optical modules, and AI data centers.
Optical chips are indeed hot enough.
So hot that a company that has been running a department store business for many years is also willing to pay CNY 316 million, cross the boundaries of a completely unfamiliar industry, and buy a ticket to enter this industry.
It's just that for Dongbai Group, the real test is not whether it has the ability to buy an optical chip company.
But whether, after buying it, it can operate it into a company that is truly worth CNY 600 million, or even more.