Optical communication chip company Youxun Co., Ltd. recently completed the second round of inquiry responses for its Sci-Tech Innovation Board IPO, focusing on performance status, growth potential, inventory digestion, and more.Reporter | Guo Hui
According to the official website of the Shanghai Stock Exchange, optical communication chip company Xiamen Youxun Chip Co., Ltd. (hereinafter referred to as “Youxun Co.”) has recently completed the second round of inquiry responses for its Sci-Tech Innovation Board IPO.
Youxun Co. submitted its IPO application to the exchange in June this year and completed two rounds of inquiry responses in less than three months, showing rapid progress. The latest round of inquiries focused on Youxun Co.’s product sales and performance status, market space and future growth potential, inventory digestion, and significant dividends during the reporting period, requiring the sponsoring institution to further verify and explain these issues.
1 Declining Gross Margin in Recent Years, Focusing on Automotive Chip Business
The optical communication industry chain covers everything from upstream core optoelectronic components to downstream optical modules and optical equipment. Youxun Co. was established in February 2003, and its main products include upstream laser driver chips (LDD), transimpedance amplifier chips (TIA), limiting amplifier chips (LA), and optical communication transceiver chips.
According to the updated financial data in Youxun Co.’s application materials, the company achieved operating revenue of 238 million yuan in the first half of 2025, a year-on-year increase of 20.19%; the net profit attributable to the parent company was 41.6869 million yuan.
However, compared to downstream optical module and communication equipment manufacturers, Youxun Co.’s revenue growth rate is significantly lower than that of its major customers.
According to the inquiry response, the year-on-year revenue growth rate of Youxun Co.’s main downstream customers exceeds 50%. If we compare the larger listed companies among the company’s top five customers, the average revenue growth rate is as high as 82.33%.
In response, Youxun Co. stated that domestic optical module manufacturers, leveraging strong manufacturing capabilities, technical strength, and cost advantages, have dominated the optical module market. Due to the different stages of domestic production processes in the industry, there is a certain disparity in revenue growth rates between optical communication chip companies and their downstream customers. Additionally, Youxun Co.’s growth is concentrated in the fixed network access field, while its main downstream customers are growing in the data center field, which also contributes to the revenue growth disparity.
From 2022 to 2024, Youxun Co.’s gross margin for its main business was 55.26%, 49.14%, and 46.75% respectively, with 43.48% in the first half of this year, showing a downward trend.
According to Youxun Co.’s response, the decline in gross margin during the reporting period is mainly due to changes in industry demand, price reductions of major products on the sales side, rising costs of some products on the procurement side, and customer structure, which is reasonable. As the industry supply and demand stabilizes, the company’s proactive strategic adjustments enter a stable period, and wafer procurement costs decrease, the gross margin of core products is expected to stabilize and recover.
Youxun Co. stated that it is currently focusing on three new growth points, including in the telecommunications market, where the company has achieved mass shipments of 25G PON symmetric burst transceiver chips and has completed the key chip returns for the 50G PON solution; in the data center market, its 100Gbps chips have matched the performance of leading international manufacturers and achieved mass shipments, successfully entering the mainstream supply chain; and in the terminal market, the company is extending its products to automotive optical communication chips and core optoelectronic chips for automotive LiDAR, which is expected to continue driving the company’s performance growth.
It is understood that FTTR (Fiber to the Room), as a key scenario for upgrading from gigabit optical networks to 10-gigabit, is significantly driving the demand for 10Gbps and below chips. According to Omdia’s forecast report, the global FTTR user ratio is rapidly increasing, with the Chinese market performing particularly well, expected to exceed 25% by 2030, ranking first in the world.
In the data center field, the demand for 10Gbps and below chips remains strong in edge computing scenarios and AI computing center applications. The deployment of 5G networks and the popularization of IoT applications are accelerating the construction of edge data centers, providing continuous market demand for 10Gbps chips.
Additionally, the significant increase in bandwidth demand for automotive networks will drive the expansion of optical communication technology applications in the automotive field, leading to a rapid increase in demand for 10Gbps chips. According to Yole Group data, the global automotive LiDAR market is expected to grow from $861 million in 2024 to $3.804 billion by 2030, with a compound annual growth rate of 28%.
2 Current Actual Controllers Seize Power
The actual controllers of Youxun Co. are Ke Binglan and Ke Tenglong.
The prospectus shows that before this issuance, Ke Binglan and Ke Tenglong collectively controlled 27.13% of the voting rights of the company, with Ke Binglan directly holding 10.92% of the company’s shares and indirectly controlling 4.59% of the voting rights by serving as the executive partner of Kexun Development.
It is noteworthy that after this issuance (excluding the over-allotment option), the voting rights controlled by the actual controllers are expected to be diluted to 20.35%.
Youxun Co. has indicated in its risk warning that there is a possibility of the company’s control being acquired by a third party or other adverse circumstances affecting its decision-making and control, posing a certain risk of change in control.
Currently, both actual controllers of Youxun Co. have no background in technology development.
The prospectus includes a historical development overview of Youxun Co., indicating that after its establishment in 2003 until 2013, the actual controller was Ping Xu, who had a professional background in chip design and once held up to 60% of the shares, during which Ke Binglan was mainly responsible for financing and daily management.
In 2007, internal conflicts erupted within Youxun Co.’s management, and in 2009, the board of directors elected Ke Binglan to take full responsibility for the company’s operations and management, ousting former actual controller Ping Xu from the core team through significant salary cuts.
In 2019, to prepare for the IPO, Youxun Co. began addressing historical differences, and Ping Xu transferred his shares multiple times until 2022, when he relinquished his direct holdings in the company; however, he still holds 6.30% of the voting rights.
Ke Binglan, born in 1955, served as the deputy secretary of the Party Committee of the Law Department of Xiamen University from 1983 to 1990, and after 1990, he entered business, holding various positions including executive vice president of Xiamen Foreign Trade Corporation, general manager and chairman of Xiamen Stanley Consulting Co., Ltd., and chairman of Zhongyin Shengxin Energy Technology (Beijing) Co., Ltd. He founded Youxun Co.’s predecessor in 2003.
Ke Tenglong, son of Ke Binglan, born in 1987, holds a bachelor’s degree and is currently pursuing an EMBA and a doctorate. From 2010 to 2013, he served as the market and sales director of Australia PCIA Investment Management Company; from 2013 to 2014, he was a project manager and sales manager at Xiamen Nail Electronics Co., Ltd.; he joined Youxun Co. in 2014 and has served as a director.
From the perspective of shareholding structure, before the IPO, the largest shareholder of Youxun Co. is Ke Binglan, holding 10.92%; the second largest shareholder is the simulated chip listed company Shengbang Co., holding 10.26%; China Mobile Fund holds 5.00%, with investors including China Mobile Capital Holdings Limited, China State-Owned Enterprise Structural Adjustment Fund Co., Ltd., and China State Capital Venture Capital Fund Co., Ltd.; Xiamen Industrial Investment, as a state-owned shareholder, holds 3.46%.
The prospectus indicates that Youxun Co. plans to raise 889 million yuan through this Sci-Tech Innovation Board IPO, which will be used for the development and industrialization projects of next-generation access networks and high-speed data center chips, automotive chip R&D and industrialization projects, and the R&D projects of optical communication chips and silicon photonic components of 800G and above.
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Special Statement: The content of this article is for reference only and does not constitute investment advice. Investors operate at their own risk based on this.
