Fujian Star Net Communic Ltd

On August 28, A-share CPO concept stocks opened lower and moved higher. Star-Net Ruijie, Hefei Metalforming Intelligent Manufacturing, and Qingshan Paper hit limit up, while Shenzhen Microgate Technology, Shengyi Electronics, Optowide Technologies, and Advanced Fiber Resources followed higher. On the news front, the Shanghai Municipal Science and Technology Commission released the 2026 application guidelines for the new-generation optical communications technology project under the Intelligent Computing Optical Network program. Approved projects will receive 40 percent of fiscal funding at launch, another 40 percent after completing milestone targets, and the final 20 percent after meeting all assessment indicators. Overseas, Nvidia reported second-quarter results for fiscal 2027, with revenue of 96.2 billion dollars, up 106 percent year on year, and data center revenue of 89 billion dollars. It also guided to a midpoint of 108 billion dollars in revenue for the third fiscal quarter and raised its fiscal 2028 revenue growth forecast to 70 percent. After the earnings release, Nvidia shares jumped 8.7 percent, giving it a market value of 5.49 trillion dollars, and more than ten investment banks including Morgan Stanley and Citigroup raised their price targets. On the technology side, Nvidia's Spectrum-X Ethernet photonic switching platform has entered full mass production, marking CPO's move into large-scale manufacturing. LightCounting forecasts that global Ethernet optical module sales will grow 73 percent year on year in 2026. Brokerage analysts believe the industry's prosperity has medium- to long-term support, with the four major overseas cloud providers guiding to capital expenditure of 720 billion to 745 billion dollars in 2026.

Xingwang Ruijie released its 2026 interim report, with net profit attributable to the parent company of 373 million yuan, up 75.86% from the same period last year. The company's total operating revenue was 10.729 billion yuan, an increase of 20.73% year-on-year, achieving five consecutive years of growth. Net cash flow from operating activities was negative 3.566 billion yuan, a decrease of 3.088 billion yuan compared with the same period last year. The company's latest asset-liability ratio was 49.98%, gross margin was 29.84%, ROE was 5.15%, and diluted earnings per share was 0.49 yuan.

Xingwang Ruijie announced on the evening of August 14 that it plans to acquire a 46% stake in its associate subsidiary Guangzhou Xinde Communication Technology Co., Ltd. for 396 million yuan in cash. After the transaction, its shareholding will rise to 67%, making Guangzhou Xinde a controlling subsidiary. Guangzhou Xinde is a national-level specialized and innovative 'little giant' that has been deeply engaged in the optical communication access field for nearly twenty years. In 2025, it achieved operating revenue of 742 million yuan and net profit of 65.91 million yuan. This transaction includes performance commitments, with the promisor committing to non-GAAP net profit of no less than 75 million yuan in 2026 and 80 million yuan in 2027, totaling no less than 155 million yuan. Xingwang Ruijie stated that Guangzhou Xinde's optical access equipment business, which focuses on international markets, is highly complementary and synergistic with the company's optical communication segment. After the transaction, Guangzhou Xinde will be consolidated into the financial statements and is expected to enhance the company's profitability in the optical communication field. The 2026 semi-annual report disclosed on the same day shows that Xingwang Ruijie achieved operating revenue of 10.729 billion yuan in the first half of the year, a year-on-year increase of 20.73%, and net profit attributable to the parent company of 373 million yuan, a year-on-year increase of 75.86%.

The Cyberspace Administration of China, together with four regional cyberspace administrations and five leading large-model enterprises, has launched a one-year special initiative to enhance IPv6 capabilities for AI large models, promoting full IPv6 support for generative AI applications. Industry estimates show that the domestic IPv6-related industry exceeded 80 billion yuan in 2025. The market for equipment room hardware upgrades and supporting solutions driven by the migration of government, enterprise, IDC, and computing centers to IPv6 single-stack exceeds 300 billion yuan, with deployment spanning 2026 to 2030. Among the 31 A-share IPv6 concept stocks, ZTE, Inspur Information, and Unisplendour all have market capitalizations exceeding 100 billion yuan. Institutions forecast that Inspur Information, Unisplendour, and FiberHome Technologies will all see net profit growth exceeding 30 percent this year and next. As of July 28, leveraged funds had net bought 643 million yuan of Unisplendour, 196 million yuan of Inspur Information, and 60 million yuan of Star-Net Ruijie.

Star-net Ruijie shot straight up after the open and hit its daily limit up within two minutes, marking its sixth limit-up board in ten trading days. The company expects net profit attributable to shareholders of the listed company for the first half of 2026 to be between 310 million and 430 million yuan, representing year-on-year growth of 46.27 percent to 102.90 percent. The increase is mainly due to a substantial rise in data centre switch business from its subsidiary serving internet clients, as well as higher fair value gains from an industry fund and increased equity transfer income. On the news front, institutional research notes point out that AI data centre switches are entering a triple resonance of demand surge, speed upgrades, and domestic substitution, with the adoption rate of domestic switches expected to rise. In addition, the electronic specialty gas theme strengthened, with Jove Energy hitting limit up at the open and notching two consecutive boards, after the Ministry of Commerce and the General Administration of Customs decided to impose temporary export controls on helium. The Huawei Ascend concept saw a sudden surge, with Sichuan Changhong hitting limit up in a straight line, as the 2026 World Artificial Intelligence Conference is about to open and Ascend's super node will make its debut. The traditional Chinese medicine theme was active, with Longshen Rongfa surging by the 20 percent limit, after the State Council approved in principle the 15th Five-Year Plan for the Revitalisation and Development of Traditional Chinese Medicine.

Star-Net Ruijie has surged by the daily limit in six of the past ten trading sessions. The switch concept was active again in morning trade, with shares of Feilinks, Shengke Communication, Ruijie Networks, ZTE, and Unisplendour all rising in sympathy. On the news front, a research note from Shanxi Securities said AI data centre switches are entering a triple resonance of demand expansion, speed upgrades, and domestic substitution, with the adoption ratio of domestic switches, switch chips, and networking solutions expected to increase. Star-Net Ruijie announced on 2 July that it expects net profit attributable to the parent company for the first half of 2026 to be between 310 million and 430 million yuan, representing year-on-year growth of 46.27 percent to 102.90 percent. A sharp increase in data centre switch business from a subsidiary serving internet clients was the core driver. The company had previously issued a notice on abnormal share price movements, warning that if raw material prices such as chips continue to rise or the supply situation tightens further, gross margins on some products could come under pressure and results may fall short of expectations.