Passive Optical Component Maker Xinyu Technology Responds to BSE IPO Inquiry, Plans to Raise RMB 550 Million

C114 News, October 15 (Nanshan) — Henan Xinyu Optical Technology Co., Ltd. (hereinafter "Xinyu Technology") and its sponsor recently disclosed responses to the first round of inquiries, covering 12 questions across 614 pages of replies.

According to the materials, Xinyu Technology focuses on the R&D, production and sales of optical passive components and precision structural parts in the optical communications field. On June 22 this year, Xinyu Technology's IPO application was accepted by the Beijing Stock Exchange, with plans to raise 550 million yuan. In terms of performance, from 2023 to 2025, Xinyu Technology recorded revenue of 152 million yuan, 259 million yuan and 508 million yuan respectively, with net profit of -3.5907 million yuan, 32.1822 million yuan and 86.5910 million yuan respectively.

The exchange's inquiry letter covered all aspects of corporate governance. Under "Business and Technology," the exchange asked Xinyu Technology to explain whether the core components of its main products, such as optical passive components and ceramic structural parts, are produced in-house or purchased externally, and to present a tabulated comparison of the competitive advantages of its core technologies versus industry-standard technologies or those of comparable companies in the same industry.

Xinyu Technology responded that its main business products include optical passive components such as optical isolators and adapters, as well as precision structural parts such as ceramic structural parts and rare-earth permanent magnets. Product performance depends mainly on the company's overall product design capabilities and manufacturing technology level, rather than on purchased raw materials. The basic performance indicators of raw materials merely define the achievable range and theoretical level of the relevant performance metrics; further precision machining is required to meet customers' specific product performance and adaptability needs, thereby maximizing the basic performance of the raw materials.

The company's main raw material purchases include optical materials such as Faraday rotators and polarizers needed for optical isolator production, and aluminum nitride ceramics needed for ceramic structural parts. Specifically:

There are many domestic manufacturers of aluminum nitride ceramics, and they are widely dispersed; the supply market is stable with no capacity bottlenecks.

The Faraday rotator market is mainly supplied by foreign companies such as Japan's Granopt and the US-based Coherent, as well as domestic companies including Xiamen Senyi Quantum Materials Co., Ltd., Supplier V and Supplier W. Due to complex production processes and difficulties in mass production, domestic companies with large-scale mass production capabilities are relatively concentrated overall. Against the backdrop of explosive growth in downstream optical communications market demand, Coherent of the US and Granopt of Japan adjusted their market strategies. Since 2023, domestic manufacturers have successively overcome technical bottlenecks and passed market validation, but capacity expansion requires a certain lead time, resulting in a temporary shortage in the Faraday rotator market supply.

Participants in the polarizer market mainly include the US-based Corning, Japan's HOYA, Hubei New Huaguang Information Materials Co., Ltd. and Shanghai Liankeng Optoelectronic Technology Co., Ltd. Since 2023, the localization of polarizers has accelerated comprehensively; the quality of domestic polarizers has reached the level of comparable products from foreign manufacturers, and relevant capacity can also meet market demand. There is currently no capacity bottleneck in the domestic polarizer market.

Xinyu Technology said that, considering the combined effects, its suppliers of Faraday rotators and polarizers are relatively concentrated. Meanwhile, given the relatively pronounced capacity bottleneck in the Faraday rotator market at this stage and reduced market supply from foreign manufacturers, the company currently sources these products mainly from Senyi Quantum, Coherent and Supplier V, which is consistent with the actual situation in the optical communications industry at present.