Ligent Technologies recently officially launched its IPO. The company plans to offer 172 million shares globally, with an expected total fundraising amount of HKD 5.67 billion, and will be listed on the Stock Exchange of Hong Kong on September 22.
Securities Star noted that the company's profitability growth has been unstable in recent years. Last year, the proceeds from the sale of a joint venture contributed to over 40% of the net profit. Meanwhile, the gross profit margin of the company's data communication optical transceivers declined for two consecutive years, and the optical chip business once experienced sales at a loss. Along with revenue growth, the concentration of revenue from the top five customers increased synchronously, and there were cases of overlapping suppliers and customers.
Further research reveals that behind this fundraising for capacity expansion, the capacity utilization rate of the company's existing optical transceivers is not saturated, and the utilization rate of some production bases has even declined. Moreover, its operation of paying dividends with the left hand while raising funds with the right has attracted market attention.
01.Gross Profit Margin of Optical Transceivers Drops for Two Consecutive Years, Optical Chips Once Sold at a Loss
From the first listing application submission in August last year, the second submission in March 2026, to passing the HKEX hearing in August of the same year and launching the IPO on September 14. After more than a year, Ligent Technologies is just one step away from listing on the Stock Exchange of Hong Kong.
As a supplier of optical communication and optical connection products, Ligent Technologies' business covers three major segments: optical transceivers, optical chips, and optical network terminals. If successfully listed, the company will become the sixth listed company under Hisense Group, following Hisense Visual Technology, Hisense Home Appliances, Sanden Holdings, Changelight Technology, and KE Electric.
The prospectus shows that from 2023 to 2025, although Ligent Technologies' revenue showed a year-by-year growth trend, its net profit fluctuated significantly. During the above reporting periods, the company's revenues were CNY 4.239 billion, CNY 5.087 billion, and CNY 8.355 billion, respectively; net profits were CNY 216 million, CNY 89 million, and CNY 873 million, respectively, with a decline occurring in 2024.
Securities Star noted that behind the substantial increase in the company's net profit last year, the proceeds from the sale of a joint venture contributed a significant increment. In 2025, the company gained CNY 353 million in proceeds from the sale of its entire equity in the joint venture Qingdao Xinghang, accounting for 40.44% of the net profit for the period. In the first half of 2026, the company's revenue and net profit were CNY 5.393 billion and CNY 656 million, respectively, representing year-on-year growth of 27.91% and 28.76%, respectively.
By business segment, since 2023, driven by the increased market demand for AI and cloud computing-related applications, Ligent Technologies' revenue from data communication optical transceivers has grown, increasing from CNY 1.056 billion in that year to CNY 5.469 billion in 2025, and its proportion of total revenue increased from 24.9% to 65.5%.
However, alongside revenue growth, the gross profit margin of this business declined. From 2023 to 2025, the gross profit margins of its data communication optical transceivers were 28.9%, 25.2%, and 24.4%, respectively, marking two consecutive years of decline. The company explained that the lower gross profit margin was mainly due to competitive pricing adopted to gain market share, as well as the increase in fixed costs brought by capacity expansion. In the first half of 2026, the gross profit margin of this business improved somewhat but has not yet recovered to the 2023 level.
The revenue from Ligent Technologies' optical chip business fluctuated significantly, with a substantial decline in 2024, mainly because new optical chips are still in the R&D stage, while customer demand for existing optical chips has shrunk. Moreover, this business once experienced sales at a loss. From 2023 to 2025, the gross profit margins of this business were 24.8%, -157.4%, and -121%, respectively. The company explained that the negative gross profit margin was mainly due to its small revenue scale, which was insufficient to cover fixed costs such as depreciation of plant and equipment, and labor.
Benefiting from the mass production of 75mW CW-DFB laser chips, the gross profit margin of optical chips improved to positive in the first half of this year. However, some analysts also point out that Ligent Technologies' mass-produced mature chips are mainly limited to low-end telecom access network scenarios. The high-speed 50G/100G EML laser chips, which truly determine the decisive factor in AI computing power, are still in the sample validation or sample delivery stage.
02. Overlapping Customers and Suppliers, Large Dividends Before IPO
Securities Star noted that behind the revenue growth, the concentration of Ligent Technologies' top five customers increased synchronously. The prospectus shows that from 2023 to 2025, the company's revenue from the top five customers was CNY 2.367 billion, CNY 3.401 billion, and CNY 5.869 billion, respectively, accounting for 55.8%, 66.9%, and 70.2% of total revenue for the respective periods, showing a year-by-year growth trend. By the first half of 2026, its revenue proportion further increased to 71.8%.
Meanwhile, the overlap of the company's customers and suppliers has attracted market attention. From 2023 to 2025, among all of Ligent Technologies' suppliers, 7, 4, and 5 were also customers of the company, respectively, and at least one of these customers ranked among the company's top five customers in at least one year. In 2023 and 2025, the proportion of the company's revenue from such overlapping customers was 50.6% and 49.3%, respectively, approaching or exceeding 50%.
In addition, the controlling shareholder Hisense Group is also a supplier of the company. In 2023 and the first half of 2026, the corresponding procurement amounts from Hisense Group were CNY 230 million, CNY 327 million, CNY 235 million, and CNY 158 million, respectively, all ranking among the company's top five suppliers.
Along with revenue growth, the scale of Ligent Technologies' inventories, trade receivables, and notes receivable increased synchronously, thereby impacting cash flow. As of the end of June 2026, the corresponding amounts for the above two indicators were CNY 3.175 billion and CNY 2.412 billion, respectively, accounting for 66% of current assets for the period. In the first half of 2026, the net cash flow generated from operating activities turned from positive to negative year-on-year, reaching CNY -1.256 billion.
Ligent Technologies' IPO is expected to raise a total of HKD 5.67 billion. The company plans to invest the raised funds in new product and technology R&D, expanding the capacity of optical transceivers and optical chips while improving automation levels, strengthening business promotion and overseas market expansion, and strategic investments and acquisitions in domestic and overseas markets.
Securities Star noted that behind the fundraising for capacity expansion, the current capacity utilization rate of the company's optical transceivers is not saturated, and the capacity utilization rate of some bases has declined.
The prospectus shows that Ligent Technologies currently has four bases in Qingdao, Jiangmen, Thailand, and the United States. Among them, the optical transceiver utilization rate of the Jiangmen base dropped from 84.9% in 2024 to 83.4% in 2025, and in the first half of 2026, its utilization rate further declined to 76.3%; the optical transceiver utilization rate of the Qingdao base dropped from 76% in 2025 to 65.6% in the first half of 2026.
Although the capacity utilization rates of the Thailand and US bases have improved, they have not yet reached full production. In 2025 and the first half of 2026, the optical transceiver utilization rates of the Thailand base were 65% and 69.6%, respectively; the capacity utilization rates of the US base were 32.8% and 77.5%, respectively.
Ligent Technologies has engaged in the practice of paying dividends with the left hand while raising funds with the right. From 2023 to 2025, the company declared and paid dividends of CNY 259 million, CNY 124 million, and CNY51.3 million, respectively, with a cumulative dividend of over CNY 434 million over the three years.
While making large-scale dividend payouts, the company has underpaid social security contributions, sparking market discussion. From 2023 to the first half of 2026, the company failed to pay social security and housing provident fund contributions in full for some employees, with a total shortfall of CNY 37.8 million. If required to make up the shortfall, the late payment surcharge as of the end of June 2026 would be up to approximately CNY 8.7 million. (First published in Securities Star, Author | Li Ruohan)
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