Having entered the Hong Kong Stock Exchange under the banner of "first AI photonic chip stock," XIZHI TECH-P (HKG: 01879) has delivered the most vivid lesson to IPO subscribers through an extreme share price rollercoaster. On its April 28 debut, the company, priced at HK$183.2 per share, soared as much as 445% intraday before closing with a stunning 383.62% gain, securing the top spot on the 2026 new stock first-day gainers list without any challenge. The celebration did not stop there—after just two days of pullback, the stock resumed its upward trajectory, hitting an all-time high of HK$1,050 on its sixth trading day, representing a gain of over 473% from the offer price, with total market capitalization briefly exceeding HK$90 billion.

Yet, the feast came and went quickly. From the HK$1,050 peak to a relentless slide down to a low of HK$228.40, XIZHI TECH-P took less than three months to see its stock nearly "ankle-slashed," retracing nearly 80% from the highest point, with the premium over the offer price once compressing to just 24.67%. Although the share price subsequently recovered somewhat, it continued to oscillate within a wide low range until September 7, when its inclusion in the Stock Connect program took effect—however, the good news acted as a sell-off trigger, with the stock dropping another 35% within just nine trading days of inclusion, testing the HK$260 level.

From an initial surge of 383% on day one to an 80% retracement from the highs, and from the spotlight of "first AI photonic chip stock" to the "sell-the-news" reaction after Stock Connect inclusion, XIZHI TECH-P's post-IPO share price performance resembles a microcosmic capital markets allegory. However, the real test may still lie ahead: on October 28, approximately 8.9746 million shares—representing 9.76% of total share capital post over-allotment exercise—held by 20 cornerstone investors will be released from lock-up. Based on the September 18 closing price of HK$323.2, this represents a market value of approximately HK$2.9 billion. If this dispersed shareholding floods the market simultaneously, the already fragile liquidity could face a new wave of pressure—the Sword of Damocles hanging over XIZHI TECH-P is about to fall.


From a 473% Surge to an "Ankle-Slash": The Chip Drama of "Thin Float Run-Up, Valuation Overreach, and Mean Reversion"

The "spectacle" of XIZHI TECH-P surging 473% in six trading days is the result of several forces converging and amplifying on debut: "scarce track expectations + renowned cornerstone share locking + strong subscription sentiment + a thin offering float," to be bid up by speculative capital. From an industry perspective, photonic computing is currently at the narrative forefront of AI infrastructure shifting from "hoarding GPUs" to "solving interconnect bandwidth and power bottlenecks," and the market is willing to price the hybrid photonic-electronic route based on its long-term potential. XIZHI TECH-P, with its oMAC photonic matrix computing, oNOC on-chip optical network, and oNET inter-chip optical network, constructs two business lines—photonic computing and photonic interconnect—supplemented by labels such as Scale-up optical interconnect, GPU supernodes, CPO, and silicon photonics, positioning it as one of the rarest pure-play photonic computing listed targets in the 2026 AI hardware landscape.

Meanwhile, XIZHI TECH-P is the world's first company to achieve scaled deployment of photonic-electronic hybrid computing, with photonic interconnect contributing the majority of revenue in 2025 and photonic computing chip shipments ranking at the forefront. This "revenue-validated but still early-stage" status makes it susceptible to being revalued by capital based on track stage weighting rather than being constrained by current PE multiples. This track scarcity rapidly translated into red-hot subscription demand, most directly evidenced by the "all-star lineup" of cornerstone investors. XIZHI TECH-P brought in 20 cornerstone investors who collectively subscribed for approximately 8.9746 million shares for around US$210 million, spanning international sovereign wealth funds, top-tier long-term asset managers, and Chinese internet and telecommunications giants—including national capital like GIC and Temasek, global long-term heavyweights such as BlackRock, Fidelity, Schroders, and Baillie Gifford, industrial capital deeply versed in AI computing needs like Alibaba, Lenovo, and ZTE, as well as leading domestic institutions including Hillhouse and Greenwoods.

The significance of this list goes far beyond merely "securing allocation"; it effectively serves as an endorsement. When industrial capital places genuine financial bets on the commercialization prospects of its photonic interconnect and photonic computing, and when long-term institutions are willing to lock in shares during the loss-making 18C stage, it indicates recognition of XIZHI TECH-P's long-term value. The extremely high subscription multiples represent another facet of the stock's remarkable interest during the offer period. As an 18C special technology company listing, XIZHI TECH-P offered a total of approximately 13.7952 million H-shares before the exercise of the over-allotment option, with an initial allocation of 5% for public offering and 95% for international placement. Due to the public offering being oversubscribed by 5,784.7 times, a clawback was triggered, increasing the public portion to 20% and reducing international placement to 80%. The international tranche also recorded 53.83 times oversubscription, with both retail and institutional investors scrambling for shares.

Notably, cornerstone investors locked up the majority of international placement shares, creating a pronounced "thin float" characteristic for XIZHI TECH-P, which is another key reason behind the post-listing price surge. Before the over-allotment option was exercised, XIZHI TECH-P had issued a total of 13.7952 million H-shares, representing 15% of the company's total share capital. Of the 11.0362 million H-shares in the international placement, the 20 cornerstone investors subscribed for approximately 8.9746 million shares, accounting for about 81.32% of the international placement and approximately 65.06% of the total issued shares. This meant an actual freely tradable float of approximately 4.82 million shares post-listing, translating to a freely tradable market value of only HK$880 million at the HK$183.2 price. This mere HK$880 million free float provided an extremely thin chip foundation for the initial speculative surge. However, after the stock rose over 473%, the long decline began, as valuation had become extremely stretched.

Based on the HK$1,050 peak price, XIZHI TECH-P's maximum market value reached HK$96.566 billion, while the company's 2025 revenue was only RMB 106 million, implying a P/S valuation of 818 times—clearly extraordinary. For comparison, XIZHI TECH-P's final pre-IPO funding round was the Series C4 round on April 24, 2025, with a post-money valuation of only approximately RMB 7.8 billion. Just one year later, the company's market value had surged to HK$96.566 billion in the secondary market, an increase of over 11 times—a clearly frenzied move. It is precisely for this reason that after hitting the historical high of HK$1,050, XIZHI TECH-P declined steadily by approximately 80%, approaching an "ankle-slashed" level. Thus, the past six months since listing have seen a classic "thin float run-up, valuation overreach, mean reversion" chip drama.


Early-Stage Fundamentals: Accelerating Commercialization Alongside Heavy R&D Investment

As of the September 18 close, XIZHI TECH-P's share price stood at HK$323.2, representing a gain of over 76.42% from the HK$183.2 offer price. This indicates that cornerstone investors already enjoy a certain level of paper profit. The key determinant of whether these cornerstones will sell after the lock-up expires depends not only on the thickness of current paper gains but, more importantly, on whether the company's future growth expectations can deliver more certain returns. This necessitates a deeper look into XIZHI TECH-P's fundamentals.

According to the first-half 2026 financial report, XIZHI TECH-P recorded revenue of RMB 79.779 million during the reporting period, up 284% year-over-year. The photonic interconnect business generated revenue of RMB 60.699 million, up 275% and accounting for 76% of total revenue, while the photonic computing business contributed RMB 19.08 million, up 313%. Notably, revenue growth in the photonic interconnect business was primarily driven by Scale-up products. Following the launch of the "LightSphere X" supernode solution and after over a year of collaboration and optimization with several leading partners, this solution has now achieved successful commercial deployment, establishing the first domestically developed distributed photonic interconnect and photonic switching GPU supernode solution. The company has also received OCS product orders from other customers, with improved OCS pricing, collectively driving Scale-up product revenue up 412% to RMB 55.907 million, making it the company's core revenue engine.

The substantial 313% increase in photonic computing revenue to RMB 19.08 million during the reporting period was primarily attributable to PACE 2, which, since its launch in March 2025, has achieved sustained sales of PACE series and Gazelle products in a single-card sales model through over a year of commercialization efforts. Alongside the overall high revenue growth, benefiting from scaled product volume, XIZHI TECH-P achieved a 25.8 percentage point improvement in gross margin to 65.8%, driving gross profit up 532% to RMB 52.523 million. Notably, XIZHI TECH-P continued to increase R&D investment during the reporting period, with R&D expenses surging 126% to RMB 360 million. Despite R&D spending being nearly RMB 200 million higher, the company's adjusted net loss for the reporting period was RMB 147 million, only 12.21% wider than the RMB 131 million loss in the same period of 2025. Clearly, XIZHI TECH-P remains in an early-stage growth phase characterized by "accelerating commercialization coupled with heavy R&D investment."


Optimistic Expectations Priced to Perfection: Limited Margin for Error Going Forward

Standing on current fundamentals and looking ahead, XIZHI TECH-P possesses conditions for accelerated development, but a more rational expectation would be "photonic interconnect scales first, photonic computing delivers later," rather than both lines growing linearly and rapidly in tandem. Currently, the bottleneck in AI clusters is shifting from simply piling up GPUs to solving bandwidth, power, and latency issues within supernodes. Demand for Scale-up photonic interconnect, NPO, CPO, and silicon photonic PICs is on the rise. The substantial revenue growth in both photonic interconnect and photonic computing products in the first half of 2026 demonstrates that once products transition from prototypes to deployment, pricing and margins have support. The LightSphere X has achieved deployment in GPU clusters with thousands of cards, and the OCS silicon photonic PIC is simultaneously in mass production, meaning the previously unproven "photonic interconnect commercialization" now has a delivery foundation.

On this foundation, as long as supernode customers expand from demonstration to multi-cluster procurement, revenue elasticity will be significantly greater than the RMB 106 million recorded for full-year 2025. This is because photonic interconnect orders are typically based on node scale, number of photonic switching modules, and subsequent expansion repurchases, making per-customer revenue naturally higher than early-stage scientific sales. However, one of the key variables for acceleration is whether the product roadmap can be maintained. The prospectus positions photonic interconnect as the short-term commercialization focus, prioritizing Scale-up EPS and Scale-up OCS, then extending to NPO and Scale-out PIC. The 2026 interim report shows that the company's 3.2T NPO has passed testing in end-customer scenarios and completed tape-out, the 6.4T NPO is under joint development with customers, CPO has demonstrated a 51.2T photonic-electronic co-packaging prototype with Shengke Communications, and optical expo information indicates its NPO has completed full-link verification, supports 53/106GBaud, and is compatible with OIF 3.2T and OPEN NPO standards.

This indicates XIZHI TECH-P is not simply selling "photonic chip samples" but is simultaneously positioning across three routes: OCS supernodes, NPO near-packaging, and CPO co-packaging. OCS addresses photonic circuit switching at rack/supernode level, NPO captures the more readily adoptable near-packaging upgrade over the next 2-3 years, and CPO positions for deeper integration with switching ASICs over the longer term. Currently, industry customer focus has shifted from interconnect speed alone to multi-chip efficient interconnection, latency reduction, and engineering validation. Scale-up connection counts are significantly higher than traditional Scale-out, expanding the market space for interconnect devices and solution providers. As an independent solution provider, XIZHI TECH-P has the opportunity to secure design wins within the domestic GPU, switch, operator, and AI computing center ecosystem.

The photonic computing product line represents XIZHI TECH-P's second growth engine for performance acceleration, but treating it as a short-term profit driver is unrealistic. Although the photonic computing line saw revenue surge 313% to RMB 19.08 million in the first half of 2026, driven by PACE 2 "Tianshu" entering EDA, quantitative finance, banking, and edge AI computing scenarios, and while PACE 3's PIC and EIC have both been taped out with the PIC wafer returned, targeting 256×256-level matrices with native oNET integration—with WAIC disclosures indicating support for low-latency large language model inference and matrices up to 256×768—the ecosystem shortcomings of XIZHI TECH-P's photonic computing are also apparent: compilers, operator libraries, GPU task scheduling integration, and customer model adaptation all require time. The prospectus itself acknowledges that large-scale coexistence of photonic and electronic computing may be a longer-term prospect. Therefore, in the near term, photonic computing is more likely to contribute revenue through inference accelerator cards, AI computing appliances, and scientific research and vertical industry penetration. Only after PACE 3 engineering samples and customer proof-of-concept conversions translate into repeat purchases would a steeper revenue curve emerge. Thus, a near-term explosive acceleration in photonic computing is unrealistic.

Based on the above assessment of XIZHI TECH-P's fundamentals, the base case for accelerated development over the next 2-3 years is: LightSphere/OCS expanding from three clusters in domestic thousand-card and multi-thousand-card supernodes to multiple operators and AI computing centers; NPO transitioning from small-batch customer delivery to scaled shipments during 2026-2027; CPO maintaining engineering validation status; PACE 3 achieving engineering samples in 2027; and photonic computing generating volume through edge and small-scale inference scenarios. If all these milestones are met, XIZHI TECH-P's revenue growth could accelerate from the RMB 100 million level in 2025 to several hundred million or even higher. However, this still remains distant from the "photonic computing comprehensively replacing electronic computing" valuation narrative. Moreover, if any supernode delivery is delayed, if major customers pursue in-house development, if yields suffer, or if the PACE ecosystem lags, XIZHI TECH-P's development could fall into a "high R&D, low conversion" quagmire.

Overall, as a company in a scarce track, XIZHI TECH-P's acceleration prospects carry high certainty. Guosen Securities projects revenues of RMB 240 million, RMB 653 million, and RMB 1.804 billion for 2026-2028 respectively. However, the market has already assigned a sufficiently high valuation premium to this certainty in the near term, with current market capitalization corresponding to P/S valuations of 108.2 times, 39.8 times, and 14.4 times for 2026 through 2028 respectively. These figures indicate the market has priced in the optimistic expectations for XIZHI TECH-P to perfection. The current valuation represents a typical "strong logic, high premium" scenario with extremely low margin for error relative to fundamentals. To sustain the current market value, the company must deliver consistently explosive results; conversely, any delay in performance delivery would expose the overhanging valuation bubble to the risk of being punctured, making another round of "valuation de-rating" difficult to avoid.