Shijia's results show AI data-center orders reaching China's optical component makers, but stocking up for those orders is consuming cash faster than profits arrive.
Shijia Photons, a Hebi-based maker of optical chips for telecom and data-center networks, reported third-quarter net profit attributable to shareholders of RMB271 million, up 226.19% from a year earlier, on revenue of RMB1.227 billion, up 116.06%. The figures come from the company’s third-quarter report, released on the evening of October 21 and reported by Jiemian and by Daily Economic News in a story carried by Sina Finance. Basic earnings per share for the quarter were RMB0.5995.
Growth sped up sharply after midyear. For the first nine months, revenue rose 74.46% to RMB2.722 billion and net profit attributable to shareholders rose 95.43% to RMB586 million. In the first half, by comparison, revenue had grown 50.66% to RMB1.495 billion and net profit 45.30% to RMB315 million, according to Daily Economic News, which cited the company’s July 31 half-year report.
The weak spot is cash. Shijia Photons’ net operating cash flow for the first nine months was negative RMB439 million, even as net profit attributable to shareholders reached RMB586 million. Daily Economic News put the decline at 863.96% from a year earlier. The company told Daily Economic News that it had built up inventory to fill orders and that, with sales growing quickly, payment terms on part of its receivables had not yet come due. Daily Economic News put the share price at RMB117.7 and the market value at about RMB53.2 billion, with the shares up 33% this year but more than 40% below their 2026 high.
The company credits AI computing demand and data-center orders
Shijia attributed the growth mainly to demand for AI computing power and rapid expansion of the data-communications market, the networks inside and between data centers. It said its products had become more competitive, customers more accepting of them, and orders were up from a year earlier. It also cited tighter cost control and better production yields, according to Daily Economic News.
The company, listed on the Shanghai Stock Exchange’s STAR Market since August 12, 2020, makes optical chips and devices, indoor optical cable and cable materials. It runs what Daily Economic News described as an integrated model covering chip design, wafer fabrication, chip processing, and packaging and testing in-house. Optical chips and devices are now its largest business: first-half revenue from the segment was RMB1.243 billion, up 77.64% and 45.40% of the total, The Paper reported. Overseas sales reached RMB881 million in the first half, up 95% and 58.89% of revenue. The older cable business is shrinking: The Paper reported indoor optical cable revenue of RMB97.52 million, down 34.97%.
Earlier in the reporting season, Apple supplier Luxshare Precision also leaned on AI data-center hardware to support its results, and Shijia’s report adds a component maker further up the optical supply chain to that pattern.
Growth rests on parts for high-speed optical modules
The products behind the gain sit inside the optical modules that link servers in AI clusters. Shijia’s DWDM AWG components, chips that combine and separate many light signals by wavelength on one fiber, have entered the supply chains of mainstream Chinese and foreign equipment makers and are in volume production. Some of its MT-FA fiber-array parts for 800G and 1.6T high-speed optical modules are in volume commercial use, according to both Daily Economic News and The Paper.
The Paper listed further lines at earlier stages. High-channel-count fiber-array units for co-packaged optics, a design that places optical connections beside the processor, have begun shipping in small batches. On the laser side, 100mW continuous-wave DFB lasers that run without temperature control, used as light sources for silicon-photonics modules in data centers, are shipping in volume, while a 400mW version is shipping in small batches and a 100G EML laser is still in customer validation. The Paper also described Shijia’s PLC optical splitters, chips that divide one fiber signal into many, as leading the global market by share, without giving a figure.
Spending is rising with sales. Nine-month research and development spending was RMB125 million, up 28.14%, according to Daily Economic News, and The Paper put third-quarter research spending at RMB65.83 million, up 81.19%. The Paper also reported that operating cash flow in the third quarter alone was negative RMB59.52 million, a smaller outflow than in the first half.
Cash conversion and new lasers will shape the next quarters
For investors, the next question is whether the inventory and receivables built up this year turn into cash. A swing to positive operating cash flow in the fourth quarter would show that the orders are being paid for; a further outflow would mean growth still needs funding from the balance sheet.
The product pipeline gives a second marker. Shijia’s 1.6T-compatible parts and its co-packaged optics units are the lines tied most closely to the next generation of AI networking, and the 100G EML laser has yet to pass customer validation. Moving those from small batches and testing into volume would widen the company’s role beyond passive components.
On the same evening, Shijia also said it plans to absorb its wholly owned subsidiary 河南仕佳信息技术研究院有限公司, an internal restructuring that The Paper said involves no payment and does not need shareholder approval. The full-year report will show whether fourth-quarter sales of 800G and 1.6T parts kept pace with the third quarter’s 116% revenue growth.