How does Changjin Photon’s core technology support its ultra-high gross profit margin?

Continuous optimization of product structure and expansion into high-end markets.

On March 27, Wuhan Changjin Photon Technology Co., Ltd. (hereinafter referred to as “Changjin Photon”) will welcome the review of its initial public offering on the Sci-Tech Innovation Board.

During the reporting period (2023 to 2025), the company’s main business gross profit margin will remain stable at over 65%. The company demonstrates its profound technological barriers, high-end product structure, and strong market position with profitability indicators that far exceed those of ordinary manufacturing, interpreting the core connotation and profit strength of “hard tech” enterprises on the Sci-Tech Innovation Board.

01

High industry barriers and the technology moat

The specialty optical fiber industry, especially the rare earth-doped fiber sector, has extremely high technical, process, and talent barriers. The fundamental reason for Changjin Photon’s excellent main business gross profit margin lies in its successful establishment of a self-controllable core technology system, achieving mastery over high value-added segments.

The company has formed an “integrated innovation platform for scientific research, engineering technology, and manufacturing” based on doping components and optical waveguide structure design. The aforementioned technologies involve complex systems that intersect multiple disciplines such as optoelectronics, materials science, and structural mechanics, requiring long-term research and development accumulation.

For example, the company’s photon darkening suppression technology effectively inhibits photon darkening by adjusting the types, concentrations, and ratios of co-doped ions, improving the stability of rare earth-doped optical fibers; its refractive index profile design technology optimizes the core waveguide structure of the fiber to modulate laser energy distribution, suppressing nonlinear effects and enhancing the optical efficiency and stability of rare earth-doped optical fibers. These hard-to-replicate “hard technologies” constitute the underlying support for the company’s profitability, fully reflecting the technical added value of the products and solidifying competitive barriers.

02

High-end product drive and continuous iteration

During the reporting period, the company’s main business gross profit margin remains at a high level, thanks to the continuous optimization of product structure and expansion into high-end markets. Changjin Photon does not rely on a single low-priced product but has formed a matrix of multiple product categories widely applied in advanced manufacturing, optical communication, measurement and sensing, national defense and military, and commercial aerospace sectors.

The prospectus shows that the revenue share of the company’s function-enhanced rare earth-doped optical fiber products has significantly increased from 3.52% in 2023 to 22.51% in 2025, with its gross profit margin maintaining a high level over the long term. At the same time, the internationally leading ultra-broadband L-band erbium-doped fiber makes an important contribution to the overall gross profit margin level. Even in the relatively mature ytterbium-doped fiber market, the company continues to upgrade to products with higher power and better beam quality, maintaining the competitiveness of this category.

This ability to “push high and sell new” allows the company to effectively resist price pressure that may arise from market competition for mature products.

03

Deep binding with leading firms and scarce supply

The sustainability of strong profitability is closely related to Changjin Photon’s high-quality customer resources and unique market position. Currently, the company has established close cooperative relationships with well-known manufacturers in various fields such as Raycus Laser, Chuangxin Laser, Jepte, Customer A, Guangxun Technology, Dekeli, and Haichuang Optoelectronics.

This cooperation is based on the customer’s recognition of the performance and reliability of the company’s products. Through continuous research and development and technological accumulation, the company has broken through key technical barriers, accumulating deep experience in all-element technological research and development and industrialization in basic theoretical research, frontier technology analysis, product and process development and design, equipment control and debugging, and large-scale production, forming a self-controllable core technology system. At the same time, the company helps customers ensure supply chain security and strengthens technological self-control. By 2025, the sales revenue from products affected by export control issues will reach 90.17 million yuan, accounting for 36.53% of operating income, promoting the technological self-control and localization process of China’s specialty optical fibers.

Changjin Photon’s push for an IPO on the Sci-Tech Innovation Board not only aims to provide capital support for the company to break through capacity bottlenecks but will also allow the market to clearly recognize the strong profitability and high research and development barriers that “hard tech” enterprises should possess in high-end manufacturing and frontier technology fields, thus becoming a benchmark for investors to evaluate its long-term value.