A super hidden champion has emerged in Qingdao, Shandong: incubated by Hisense, it specializes in optical communication and ranks third in the country.

Recently, a super hidden champion has emerged in Qingdao, Shandong: Nazhen Technology, which is making a sprint for an IPO in Hong Kong.

When it comes to Hisense, you'll probably think of TVs and refrigerators. But when it comes to Nazhen Technology, not many people have heard of it. Do you know that the controlling shareholder of this "low - key player" is Hisense, and it is also the core piece in Hisense's layout of optical communication.

Optical communication may sound mysterious, but in fact, it is closely related to our lives. The optical fibers used in home broadband, X - ray detection in hospitals, and the smooth internet speed when watching videos all rely on it.

To put it simply, optical communication is "transmitting information with light". It is much faster and has a much larger capacity than traditional electrical signals, and can be regarded as the "light - speed express network" in the information age. And Nazhen Technology is deeply involved in this field.

Currently, there are two major new opportunities in optical communication.

One is related to AI computing power centers. The global optical communication market is growing at an annual rate of over 10%. The expansion of data centers, the deepening of 5G, and the improvement of AI computing power are all driving the demand.

The other is related to 6G. For 6G to be faster and transmit more data, it depends on the rapid transmission of signals between base stations. Therefore, optical communication must be realized; otherwise, 6G will be difficult to implement.

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You may not be familiar with Nazhen Technology, but you're familiar with Hisense. The controlling shareholder of Nazhen Technology is Hisense. Back then, Hisense wanted to layout in optical communication, so Nazhen Technology was established.

What is optical communication? As the name suggests, it is to transmit information with light. It's like putting information on a "light - speed express", much faster and capable of carrying more than the "electrical signal express" we usually use, and it's less prone to "traffic jams".

There are many scenarios for optical communication, such as in the medical field.

When Nazhen Technology was founded in 2015, it focused on this: specializing in the research, development, and production of carbon nanotube "cold cathode" X - ray tubes, and providing solutions for security inspection, medical, and industrial non - destructive testing fields.

Another example is the well - known "optical fiber".

In the past, network cables transmitted information through "electrical signals", like using a small water pipe to transport water. The pipe was thin, the water flow was slow, and it was easily interfered with by the outside world (for example, having electrical appliances nearby might affect the internet speed). However, the optical fiber used in optical communication transmits "optical signals", which is equivalent to switching to a large - diameter "light - speed water - delivery pipeline".

Currently, one of Nazhen Technology's latest products is to provide key optical communication products for the AI computing power network.

The AI computing power network is like a super - brain that needs to process and transmit a large amount of data, and optical communication products are like the "high - speed nerves" of this super - brain.

Generally speaking, Nazhen Technology's business revolves around "optical communication + application scenarios". The specific products include optical module products, optical chip products, and optical network terminal products. Its customers are mostly cloud service providers, telecommunications and network equipment suppliers, and operators.

Among many products, optical module products account for the highest proportion of Nazhen Technology's revenue.

An optical module can be understood as the "translator" and "courier" in network communication.

In the field of data communication solutions, Nazhen Technology is one of the first manufacturers in China to successfully develop and mass - produce 800G optical modules, and also one of the first enterprises to deliver samples of 1.6T optical module products for customer verification.

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The development of the optical communication industry has gone through several important periods.

In the early days, it mainly focused on basic optical fiber laying and the application of simple optical communication equipment to meet basic needs such as voice communication. After the rise of the Internet, the demand for data communication exploded, prompting the development of optical communication equipment towards higher speeds and larger capacities. 10G and 40G optical modules emerged one after another.

In recent years, with the rise of emerging technologies such as AI and cloud computing, the industry has entered a new stage oriented towards meeting the needs of ultra - high computing power and massive data transmission.

Currently, the market scale of the optical communication industry maintains a relatively high growth rate. According to Frost & Sullivan, the global optical communication market scale has been continuously growing in the past few years, with a double - digit compound annual growth rate.

The mainstream demand behind this comes from the continuous expansion of data center construction, the in - depth deployment of 5G networks, and the demand for high - speed data transmission due to the improvement of AI computing power.

Taking data centers as an example, LightCounting predicts that in 2024, the market share of 800G optical modules in the data center market will exceed 30%. Although the upgrade of 400G by Chinese cloud service providers is 1 - 2 years later than that in North America, the growth rate is faster, and the procurement volume in 2023 doubled year - on - year. It is expected that by 2025, the compound annual growth rate of the internal interconnection bandwidth demand of China's intelligent computing centers will exceed 60%, and the penetration rate of 800G and above optical modules in new projects is expected to reach 40%.

The new demands of the industry are mainly concentrated in two aspects.

One is the widespread application of AIGC (Generative AI). The demand for optical communication products with higher bandwidth and lower latency in data centers has soared. For example, the demand for optical modules with a rate of 1.6T and above has started to grow rapidly.

The other is the advancement of 6G communication technology research and development.

For 6G to be faster and transmit more data, it depends on the rapid transmission of signals between base stations. The single - channel 100G wireless fronthaul optical module is the "high - speed data dedicated line" between base stations, capable of transmitting 100G of data per second, helping 6G achieve high - speed and low - latency performance. The research and development of it is very urgent now; otherwise, 6G will be difficult to implement.

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In international competition, Chinese enterprises have advantages in mid - and low - end products, relying on cost - effectiveness and local services. Core technologies and high - end products are still controlled by international established giants (such as Corning and II - VI).

The market share in the industry is already highly concentrated, with many giants.

In 2024, in terms of global optical module revenue, the top five global optical module manufacturers accounted for a total of 44.1% of the market share.

In China, in terms of Chinese optical module revenue (in 2024), Nazhen Technology ranks third, with a market share of 7.2%. In terms of global data communication optical module revenue, Nazhen Technology ranks among the top five.

Nazhen Technology's competitors include global optical communication giants, such as foreign companies like Finisar (which has been acquired) and Lumentum, and domestic companies like Zhongji Innolight and Accelink Technologies. Compared with its competitors, Nazhen Technology's differentiation lies in its full - stack solution capabilities. It can not only provide optical module products but also has the ability to research, develop, and mass - produce optical chips.

In recent years, Nazhen Technology's revenue has shown a fluctuating trend.

From 2022 to 2024 and the first half of 2025, its revenues were approximately 5.043 billion yuan, 4.239 billion yuan, 5.087 billion yuan, and 4.216 billion yuan respectively. The net profit also fluctuated significantly. In 2022, it was 423 million yuan, dropping to 216 million yuan in 2023, and further falling to 89 million yuan in 2024. This was mainly due to factors such as the decline in optical chip revenue, resulting in a net profit margin as low as 1.8% that year.

This article does not constitute any investment advice.

This article is from the WeChat official account “Pencil News” (ID: pencilnews), author: Zhi Ba. It is published by 36Kr with authorization.