Changguang Huaxin Increases Capital Contribution to Related Party to Accelerate Development of High-End Indium Phosphide Laser Chips and Others

On the evening of March 18, Changguang Huaxin (688048) announced that to further improve the company’s industrial layout and enhance its technological strength in optical communication chips and related products and applications, its wholly-owned subsidiary Suzhou Changguang Huaxin Semiconductor Laser Innovation Research Institute Co., Ltd. (hereinafter referred to as “Research Institute”) plans to invest 8 million yuan to subscribe for an additional registered capital of 625,000 yuan in related party Suzhou Xingyuan Optoelectronic Technology Co., Ltd. (hereinafter referred to as “Xingyuan Optoelectronic”). After this capital increase, the Research Institute will hold a 23.07% stake in the target company. Previously, the Research Institute, together with Suzhou Xinyuan Zhihui Equity Investment Partnership (Limited Partnership), EXOPTRONICS INC, and individual Qiu Erhu, invested 6.25 million yuan to establish Xingyuan Optoelectronic, which develops high-end indium phosphide laser chips, devices, and related modules and subsystems for AI data center optical communication, frequency-modulated continuous wave laser radar, fiber optic sensing, and other fields. Xingyuan Optoelectronic completed its business registration on November 14, 2025, with the Research Institute investing 1.25 million yuan, holding a 20% stake in Xingyuan Optoelectronic.

The announcement shows that since its establishment, Xingyuan Optoelectronic has basically completed the formation of its core team, product pre-research, and process verification, and has initially expanded into the market. To further meet the funding needs for R&D, production line construction, and daily operations, after friendly negotiations, all parties plan to invest an additional 24 million yuan in Xingyuan Optoelectronic. Among them, Haining Suiyin Yuguang Venture Capital Partnership (Limited Partnership) will invest 8 million yuan to subscribe for an additional 62.5 thousand yuan of registered capital; Xiamen Jiechuan Jiejin Investment Partnership (Limited Partnership) will invest 4 million yuan to subscribe for 31.25 thousand yuan of additional registered capital; Anhui Jiechuan Jihui Seed Venture Capital Partnership (Limited Partnership) will invest 4 million yuan to subscribe for 31.25 thousand yuan of additional registered capital; and the Research Institute will invest 8 million yuan to subscribe for 62.5 thousand yuan of additional registered capital. Other shareholders of Xingyuan Optoelectronic have agreed to waive their preemptive rights for this capital increase. Before the increase, the Research Institute held a 20% stake; after the increase, it will hold 23.07%.

Given that the company’s Chairman and General Manager Min Dayong serves as a director of Xingyuan Optoelectronic, Vice Chairman and Executive Vice President Wang Jun serves as a supervisor, and the Research Institute, a wholly-owned subsidiary, holds a 20% stake in Xingyuan Optoelectronic, according to the “Shanghai Stock Exchange Sci-Tech Innovation Board Stock Listing Rules,” Xingyuan Optoelectronic is a related party of the company. This capital increase constitutes an related-party transaction but does not constitute a major asset reorganization as defined by the “Administrative Measures for Major Asset Restructuring of Listed Companies.”

The recent 2025 performance forecast disclosed by Changguang Huaxin shows that during the period, the company achieved operating revenue of 468 million yuan, an increase of 71.81% year-on-year; net profit attributable to the parent was 19.52 million yuan; and net profit after non-recurring gains and losses was -36.16 million yuan.

During the reporting period, the company continued to deepen its focus on high-power semiconductor lasers. Leveraging its technological accumulation and product performance advantages, it further expanded downstream application markets. Customer demand steadily increased, driving sales revenue of this series of products to grow, becoming a core support for the company’s revenue.

While consolidating its main business, the company actively seized market opportunities in optical communication, laser sensing, and other fields. Strategic investments in talent, technology, and production lines in earlier stages have begun to bear fruit. The company’s layout in optical communication is gradually taking shape, with related products and solutions starting to bring new growth points to revenue. The advancement of this business marks a breakthrough in emerging application markets, diversifying the business structure and opening new growth space for the company’s long-term development.

Regarding this capital increase to related parties, Changguang Huaxin believes that the purpose of this investment is to ensure Xingyuan Optoelectronic’s production line construction and daily operational funding needs, accelerate the development of high-end indium phosphide laser chips, devices, and related modules and subsystems, and further enhance the company’s core competitiveness. This transaction will not have a significant impact on the company’s normal production and operation, nor will it significantly affect the company’s financial condition or operating performance. It will not harm the interests of the company or minority shareholders, nor will it affect the company’s independence. The company’s main business will not become dependent on or controlled by related parties due to this transaction.