Reported by NUPIAO News | Song Jianan
On the evening of August 13, high-speed optical module leader Zhongji Innolight (300308.SZ) announced a cash deal worth over 1.747 billion yuan to acquire a 10.47% stake in computing-power thermal management leader Zhongshi Technology. The move is aimed at using capital as a bridge to connect two core computing-power segments — optical modules and thermal management — in a bid to solve the ever-growing power consumption challenges brought on by the 800G and 1.6T upgrade cycle.
The target of this transaction is 31.3725 million unrestricted tradable shares of Zhongshi Technology, representing 10.47% of its total share capital, with a per-share transfer price of 55.70 yuan. The sellers are members of Zhongshi Technology’s controlling shareholder family — controlling shareholder Wu Xiaoning, his wife Ye Lu, and their son HAN WU — who collectively agreed to offload a portion of their holdings. Specifically, Wu Xiaoning will transfer 14.1842 million shares, Ye Lu will transfer 13.5606 million shares, and Han Wu will transfer 3.6277 million shares. The subject shares carry no pledges, freezes, or any other encumbrances, and come with full shareholder rights attached. After the transfer is completed, Zhongji Innolight will be restricted from reducing its stake in these shares for 12 months.
Notably, on the afternoon of August 13, Zhongshi Technology’s share price had already surged over 13% at market open. On August 14, the stock hit a 20% limit-up at 67.36 yuan per share, giving it a market capitalization of 20.175 billion yuan.
According to the announcement, Zhongji Innolight will fund the entire transaction with its own funds or self-raised capital, with payments to be made in two installments. The first installment of 874 million yuan will be settled within ten working days after the announcement, and the remaining equal amount will be paid within ten working days after the China Securities Depository and Clearing Corporation’s Shenzhen branch issues the share transfer confirmation. Both parties have agreed that if the transfer cannot be completed within sixty trading days from the signing of the agreement, Zhongji Innolight has the right to terminate the contract and demand a full refund. Meanwhile, the three transferring parties will bear joint and several liability to ensure performance. The agreement contains no performance-based betting clauses, share buyback provisions, or profit-sharing arrangements.
Zhongji Innolight also stated that this transaction does not require review by its board of directors or shareholders’ meeting, as it falls within the president’s investment approval authority. However, a prerequisite for the share transfer is compliance review by the Shenzhen Stock Exchange, meaning final delivery of the equity remains subject to uncertainty. The transaction does not constitute a related-party transaction, nor does it meet the threshold for major asset restructuring, and it will not have a significant impact on the company’s day-to-day operations.
The two companies occupy key positions in the upstream and downstream of the computing-power hardware supply chain, and their businesses are naturally complementary. Zhongji Innolight focuses on the R&D, manufacturing, and sales of high-end optical transceiver modules. As a core global supplier of 800G optical modules, its 1.6T products have already been batch-sampled to leading cloud providers. Its products are widely deployed in AI supercomputing centers and large-scale data centers, giving the company a dominant share of the global high-speed optical module market.
The target company, Zhongshi Technology (300684.SZ), officially known as Beijing Zhongshi Weiye Technology Co., Ltd., is a domestic leader in thermal management and electromagnetic shielding materials. Founded in 1997, its core products cover high-thermal-conductivity graphite, thermally conductive materials, VC vapor chambers, and liquid cooling modules, spanning chip-level, module-level, and system-level thermal dissipation needs. Its products are compatible with 5G base stations, high-speed optical modules, and AI servers across all scenarios.
In its 2025 financial report, Zhongshi Technology noted that in the digital infrastructure sector, it serves global leading communications equipment and optical component manufacturers including ZTE, Ericsson, Nokia, Cisco, Coherent, and Source Photonics. The company has introduced VC module thermal solutions tailored to the optical communications industry, with both thermal performance and value per unit improving in tandem. Currently, its VC module products have passed certification from leading domestic and international optical communications manufacturers and are already being shipped.
Addressing the high power consumption demands of AI chips, Zhongshi Technology said it has independently developed vertically oriented graphene thermal pads designed for AI chips. These products feature ultra-high thermal conductivity, low thermal resistance, and excellent reliability, capable of meeting the cooling requirements of high-power advanced-packaging chips. At the same time, the company is advancing next-generation graphene thermal pad innovation through entirely new technical approaches, with industrialization progressing steadily.
Industry estimates suggest that 800G optical modules typically consume between 15 and 30 watts, while next-generation 1.6T products can peak above 42.9 watts. Traditional air cooling is only effective up to heat flux densities of 5–10 W/cm², whereas the internal heat flux density of 1.6T optical modules exceeds 20 W/cm². Sustained high temperatures in lasers and DSP chips can cause wavelength drift and signal distortion, directly shortening module lifespan and undermining data center operational stability. This is precisely why thermal performance has become the single biggest constraint on product iteration.
Explaining the rationale behind the investment, Zhongji Innolight stated in its announcement: “As our 800G and 1.6T high-end optical module products continue to scale in volume, power density will keep rising, driving significantly greater thermal management demand. We expect strong synergies with our core business.”
This equity investment also marks a new phase in China’s computing-power hardware competition — one defined by “upstream-downstream equity binding.” In the past, the industry typically relied on short-term procurement and framework agreement partnerships, with leading companies developing independently. Analysts point out that AI computing hardware has long moved beyond single-product competition into system-level solutions and full-chain delivery capabilities. Integrated coordination across optics, thermal, electronics, and structural components is the long-term trend.
For Zhongshi Technology, securing strategic investment from a leading optical module manufacturer opens up sustained growth potential. Leveraging Zhongji Innolight’s global customer channels, its optical module thermal solutions are well-positioned to deepen penetration among overseas cloud providers. At the same time, downstream terminal demand feedback will help it iterate on liquid cooling and high-thermal-conductivity composite materials, further cementing its moat in digital infrastructure thermal management.
As of press time, Zhongji Innolight’s share price stood at 922.13 yuan, up 0.15%, with trading volume reaching 5.285 billion yuan. The company’s total market value hit 1.08 trillion yuan, with a trailing twelve-month P/E ratio of 72.07 times. UBS has resumed coverage on Zhongji Innolight with a “Buy” rating and a target price of 1,500 yuan.
