The "highest-priced stock" plummeted; can an 8-fold profit surge recover its 200 billion market cap?

Introduction: 8x Profit vs. Thousands of Times PE, Who Can Win Capital's Confidence?

Now, the "throne" of the A-share market has been officially divided by two major tech stocks: Lianxun Instrument still holds the title of "Single Price Stock King," while Changxin Technology won the "Total Market Cap Stock King" on its first day of listing. As of the close on July 27, Changxin Technology was quoted at 49 yuan/share, with a full-day gain of 465.82%, reaching a total market capitalization of 3.31 trillion yuan; on the same day, Lianxun Instrument also surged by 10%.

But just one day later, these two stock kings changed their faces: On July 28, Lianxun Instrument plummeted more than 18% during trading, while Changxin Technology opened lower by 7.71%, quoting at 45.22 yuan/share, but subsequently recovered from the decline. By the close, Lianxun Instrument and Changxin Technology fell by 14% and 4.08%, respectively.

As the saying goes, "tall trees catch much wind," sitting in the position of the stock king naturally attracts more market attention. Compared to the hot debut of Changxin Technology, there is actually much controversy surrounding the "Single Price Stock King" $Semight(688808.SH). In the semi-annual report released recently, Lianxun Instrument expects its net profit attributable to shareholders for the first half of the year to be in the range of 510 million to 580 million yuan, a year-on-year increase of 801.96%~925.75%. However, such a high profit growth rate still makes it difficult to stabilize the market capitalization above 200 billion yuan.

According to reports from *Daily Economic News*, on June 25, Lianxun Instrument's stock price once touched a high of 2777.77 yuan/share, and its total market capitalization also broke through 280 billion yuan, but subsequently began to fluctuate continuously.

From June 25 to July 28, Lianxun Instrument's stock price dropped as low as 1583 yuan/share; after releasing its semi-annual performance forecast on July 23, although it rose briefly, it has now experienced a sharp drop. The market capitalization of approximately 189.9 billion yuan represents a shrinkage of over 90 billion compared to the nearly 280 billion yuan on June 25.

This gives people a very fragmented impression. The data of Lianxun Instrument's performance, written in black and white, indeed confirms that the AI computing power upward cycle has brought dividends to the optical communication test equipment track. However, on the other hand, hidden dangers such as ultra-high valuation, small-cap liquidity defects, and industry cycle fluctuations still hang over their heads.

01 Performance Surges Significantly, but Gap with Global Leaders Remains Obvious

Lianxun Instrument, whose half-year profit increased by up to 9 times year-on-year, is also one of those standing in the light. However, its stock price far exceeds that of major optical module and optical chip manufacturers, relying on a completely different route from these large companies.

Lianxun Instrument does not manufacture optical modules nor optical chips; it only provides "test products and services" for these computing power equipment, thereby completing the "miracle" of a 32-fold stock price increase within two months of listing (the initial offering price on April 24 was 81.88 yuan/share, and the intraday high on June 25 was 2777.77 yuan/share).

The "divine speed" of Lianxun Instrument is not entirely driven by capital speculation. From 2020 to 2022, the company mainly focused on the 800G optical module testing field. In 2024, it upgraded to the 1.6T optical module testing field, closely following the demand for computing equipment iteration. Both its performance and stock price have a strong industrial foundation.

In Lianxun's portfolio, electronic measuring instruments and semiconductor testing equipment are the two main products contributing to revenue. In 2023, 2024, and the first three quarters of 2025, the combined revenue contribution from these two products exceeded 90%, mainly used in three application areas: optical communication, silicon carbide power devices, and semiconductor integrated circuits.

Among these, the revenue contribution from test products in the optical communication field has consistently exceeded 70% annually. It doubled from a scale of about 200 million yuan in 2023 to 558 million yuan in 2024, and further grew to 629 million yuan in the first three quarters of 2025.

It is obvious to all that Lianxun Instrument has seized the opportunity driven by global AI computing infrastructure boosting the procurement demand for optical communication testing equipment.

Performance forecast data shows that Lianxun Instrument's net profit attributable to shareholders for the first half of 2026 is expected to be between 510 million and 580 million yuan, whereas the net profit for the same period in 2025 was only 56.54 million yuan, representing a year-on-year increase range of 801.96%-925.75%. More noteworthy is the single-quarter data: Lianxun Instrument's net profit attributable to shareholders in Q1 2026 was 119 million yuan. Based on this calculation, the net profit attributable to shareholders for Q2 alone could reach 391 million to 461 million yuan, a quarter-on-quarter growth of 228%~287%.

The nearly threefold quarter-on-quarter rise in Q2 performance intuitively reflects the accelerated layout of optical module manufacturers in high-speed optical module mass production, with concentrated landing of testing equipment procurement orders.

However, this is not enough, nor is it enough for Lianxun Instrument to rest easy.

Because the market for testing equipment where Lianxun Instrument operates is currently monopolized by US and Japanese enterprises such as Advantest and Teradyne. According to Frost & Sullivan data, overseas enterprises represented by Keysight and Anritsu accounted for about 84% of the Chinese optical communication testing instrument market in 2024, while local enterprises' market share accounted for only about 16%.

Lianxun Instrument holds a 9.9% market share in the Chinese optical communication testing instrument market, ranking third in the market and being the only local enterprise among the top five.

Main competitors of Lianxun Instrument; Source: Prospectus

It is not hard to see that globally and in terms of main products, one of Lianxun Instrument's main competitors is Keysight. This company is actually not unfamiliar; its predecessor was Hewlett-Packard (HP). In 1999, HP reorganized into Agilent Technologies and HP. In 2014, it split again into Keysight and listed on the New York Stock Exchange.

In 2024, Keysight occupied about 31% of the Chinese optical communication testing instrument market, exceeding Lianxun Instrument by about 21%.

As of October 31, 2025, Keysight's fiscal year revenue was approximately $5.375 billion, with net profits reaching $850 million. Data from East Money shows that Lianxun Instrument's total revenue in 2025 was approximately 1.194 billion yuan, with net profit attributable to shareholders of 174 million yuan.

Looking at fiscal year data, Keysight's revenue scale is 30 times that of Lianxun Instrument. Although their market scopes differ, comparing with leading enterprises allows for a more reasonable reference.

Other domestic storage device testing equipment manufacturers are also catching up, such as RIGOL Technologies, Siglent Technologies, Changchuan Technology, Huafeng Test Control, and Liandong Technology. However, overall, most domestic peers are in the early stages of research and development or industrialization, with significant gaps in product performance compared to international leading enterprises. High-speed products are even in a blank stage.

Overall, at this stage, only Lianxun Instrument among domestic enterprises has achieved scaled implementation of high-end computing power optical communication testing equipment, with no comparable local competitors. However, as the profitability prospects of the track become prominent, continuous influx of domestic capital will gradually intensify internal competition.

02 Small Float Volume vs. Two Rounds of Large Unlocking

From a medium-to-short-term perspective, compared to domestic peers, Lianxun Instrument's market share in China will remain leading. Future uncertainties still come from upstream testing demands and the replacement of testing equipment brought about by technological iterations. But it is expected that in the short term, the strong demand situation in computing infrastructure and optical communications will not suddenly weaken.

From an investor's perspective, if concerned about significant fluctuations in Lianxun Instrument's stock price, one might need to pay attention to the company's share structure.

Lianxun Instrument has a total share capital of 10.2667 million shares, with only 19.2961 million shares being unrestricted circulating shares, accounting for 18.79% of the float. Over 80% of the shares are under lock-up periods. Under a small float volume, a small amount of incremental capital can drive the stock price to surge significantly. Once sector sentiment fades and funds withdraw, a cliff-like drop is highly likely.

Volatility since listing also shows that in the early stage of listing, Lianxun Instrument's stock price saw a maximum increase of over 32 times. After peaking, it experienced a maximum drawdown of 43% over 22 trading days. The amplitude of stock price volatility is far higher than the overall level of the STAR Market.

Regarding unlocking, in late October 2026 and April 2027, the company will face two rounds of large-scale restricted share unlocking. In April 2027, the proportion of shares unlocked in a single round exceeds 30% of the total share capital. The significant expansion of circulating chips will change the supply and demand relationship of the stock, with obvious pressure in the medium to long term.

Beyond the share structure, one can also combine and compare Lianxun Instrument's customer structure and asset structure.

From 2022 to 2024 and the first three quarters of 2025, the proportion of sales amounts from the top five customers of Lianxun Instrument to the total sales amount of the period were 42.64%, 52.81%, 44.21%, and 36.94%, respectively. This structure is still considered reasonable, without any case where sales to a single customer exceeded 50% of the company's total sales for that year or severe dependence on a few customers.

Major customers include Zhongji Innolight, Eoptolink, Accelink Technologies, Hisense Group, HG Genuine Source, Saily Technology, Lumentum, and other mainstream domestic and international clients.

At the same time, Lianxun Instrument has also seen high accounts receivable, piled-up inventory, increased impairment and capital turnover pressures, putting pressure on its asset structure.

Data from East Money shows that at the end of 2022, Lianxun Instrument's book balance of accounts receivable was only 82.46 million yuan. By the end of Q1 2026, it had increased to 563 million yuan, a two-year increase of over 525%. It needs to be warned that if some downstream customers face operational pressure and delay payments, the company will need to make large provisions for bad debts, eroding net profits.

In addition, to meet order demands, Lianxun Instrument pre-stocked upstream components and finished 整机 products. Inventory balances skyrocketed from 70.73 million yuan at the end of 2022 to 751 million yuan at the end of Q1 2026, an increase of over 910%.

It needs to be known that the technology iteration speed of high-speed testing instruments is extremely fast. After the launch of new generation products, old equipment will depreciate rapidly. Although current demand has surged greatly, risks of depreciation losses from accumulated inventory still need to be prevented.

Long-term, computing power iteration will not stop. After 1.6T optical modules, R&D for 3.2T and 6.4T ultra-high-speed optical modules has already started. Each round of speed upgrade will bring demand for testing equipment replacement. Meanwhile, China has included high-end scientific instruments in the scope of tackling key technologies for independent control, with policies continuously supporting local enterprises. In addition, expanding scenarios for vehicle-mounted optical interconnects, silicon photonics chips, and third-generation semiconductors provide industry opportunities that can help Lianxun Instrument break free from the cycle constraints of a single optical communication track.

But at the same time, domestic enterprises still have a 5-8 year technological gap compared to overseas leaders in high-speed sampling algorithms and RF underlying chip fields. Ultra-high-end equipment cannot achieve complete substitution in the short term. The volatility of global AI capital expenditure rhythms, coupled with the hidden danger of overcapacity brought by the influx of capital into the track, also creates downward pressure on the industry's overall profit center in the future.

As of the close on July 28, Lianxun Instrument plummeted 14%, eating up most of the gains brought by the previous few trading days. The stock price came to 1850 yuan/share, with a total market capitalization of about 189.9 billion yuan. And in 2025, Lianxun Instrument's net profit attributable to shareholders was 174 million yuan, with PE still reaching thousands of times.

Such a high valuation obviously cannot be digested relying on a single performance realization. Fluctuations with the sentiment of the computing power sector will remain the norm in the short term. Whether Lianxun Instrument can firmly hold the position of A-share Single Price Stock King in the future mainly depends on comprehensive factors such as the sustainability of global computing capital expenditure, the company's R&D iteration capability, cash flow, and the effectiveness of customer supply chain optimization.