Driven by the AI wave, Cambridge Industries Group (CIG) (06166.HK) debuted on the Hong Kong stock market in October 2025, with its shares surging over 30% on the first day, becoming a major focal point of the market.

However, only a few months later, the company's stock price experienced a sharp correction, resulting in a significant valuation divergence between its A-shares and H-shares. Following the release of its performance forecast in January 2026, the stock suffered a series of heavy sell-offs. As a "rising star" in the optical module sector, CIG’s H-share price has dropped nearly 30% in 2026; amidst the broader AI boom, the company's stock performance has been underwhelming.

HK Listing at a 40% Discount; Star Institutions Flock to Invest

Public information shows that CIG is an enterprise engaged in the design, development, and sale of connectivity and data transmission equipment. Its product portfolio includes broadband, wireless, and optical module technology products.

On October 28, 2025, CIG was listed on the Main Board of the Hong Kong Stock Exchange, drawing intense market attention. On its debut day, the stock price surged by over 58% intraday, reaching a peak of HK$109 per share, before closing at HK$92.20, a first-day gain of 33.86%.

This represented a secondary listing for CIG. At the time of the Hong Kong debut, its A-share price stood at RMB 108.25, while the maximum offer price for the Hong Kong shares was set at HK$68.88, representing a 41% discount relative to its A-shares.   Reflecting on CIG’s initial Hong Kong entry, the company was highly sought after by capital. During the public offering phase, CIG was oversubscribed by 338.70 times. The final number of shares for the public offering was 6.7011 million shares, accounting for approximately 10% of the total shares offered. The international placement was equally popular, oversubscribed by 16.50 times, with a final count of 60.3095 million shares, representing 90% of the total offering.   Furthermore, the most striking aspect was its "all-star" investor lineup, which included international asset management giants such as Baring and Morgan Stanley, top-tier private equity firms like HCEP, and major names such as Taikang Life and ICBC Wealth Management. CIG’s IPO featured a total of 16 cornerstone investors who collectively invested US$290 million, subscribing to 48.89% of the total shares issued.

NewTimeSpace has learned that this successful listing was bolstered by the brilliant "report card" the company had just delivered for the third quarter. In the third quarter of 2025, CIG achieved revenue of RMB 1.325 billion, a year-on-year increase of 32.29%; net profit attributable to shareholders was RMB 138 million, up 92.92% year-on-year. For the first three quarters, the company recorded revenue of RMB 3.36 billion (+21.57%) and a net profit of RMB 259 million (+70.88%).

This performance undoubtedly added a significant highlight to the Hong Kong listing and fueled investor expectations for the company's future growth.

Supply Chain Tightens; Fourth Quarter Performance Under Pressure

However, the capital market's enthusiasm did not last long. After hitting a high of HK$109 on its first day of listing, CIG’s stock price never returned to that peak. Following the release of the 2025 annual performance forecast, the Hong Kong share price even fell below its offer price.   NewTimeSpace has learned that on January 19, 2026, CIG faced intense selling pressure. This collapse occurred on the first trading day following the release of CIG’s 2025 performance forecast.   On that day, CIG’s A-shares hit the daily downward limit (limit down), while H-shares fell by 12.20%. Subsequently, the stock continued to trend downward amidst fluctuations, with H-shares briefly dipping below the offer price to touch HK$63.25.

According to the performance forecast released on January 16, 2026, CIG expects to achieve a net profit attributable to shareholders for the full year of 2025 between RMB 252 million and RMB 278 million, an increase of 51.19% to 66.79% year-on-year. Net profit after deducting non-recurring gains and losses is expected to be between RMB 249 million and RMB 275 million, up 64.62% to 81.81% year-on-year.

On the surface, this appears to be quite a brilliant result, with net profit growth rates far exceeding the industry average.

However, when comparing the full-year results with the data from the first three quarters, the issues become apparent. For the first three quarters of 2025, CIG's net profit was RMB 259 million. Based on this, the estimated net profit for Q4 2025 ranges from -RMB 7 million to +RMB 19 million. This implies that CIG’s performance effectively ground to a halt in the fourth quarter.

Meanwhile, the consensus analyst forecast for CIG’s fourth-quarter net profit was RMB 139 million. This massive gap between expectations and reality led to the continuous sharp decline in the company's share price.

Although CIG explained in detail the reasons for the Q4 profit pressure—noting that after completing its Hong Kong IPO financing in Q4 2025, the proceeds were primarily held in Hong Kong dollars—the shift in the exchange rate caused issues. As the US dollar exchange rate turned from a rise in the previous year to a decline in this period, and the HKD exchange rate fell in tandem, the company’s net exchange gains turned into losses. The estimated exchange loss for 2025 is approximately RMB 81.61 million, compared to an exchange gain of RMB 14.44 million in 2024, representing a year-on-year decrease in net exchange profit of approximately RMB 96.05 million.

Notably, CIG pointed out that over the past several years, the company's continuous investment in production capacity and the upstream supply chain has been the core foundation for this period's performance growth.

Specifically regarding the supply chain, CIG has consistently used a combination of prepayments, strategic material stockpiling, capital expenditures, and equity investments to increase investment in upstream supply chain capacity, locking in material supplies and raw material capacity early to mitigate the impact of supply chain fluctuations. However, the current shortage of key materials such as core components persists, with a trend toward localized expansion and deterioration, and the volatility remains somewhat unpredictable.

As of the close on February 27, 2026, CIG’s A-shares closed at RMB 103.40, down 4.55%, while H-shares closed at HK$67, down 8.28%. To date in 2026, CIG’s Hong Kong shares have fallen by 28.34%. Based on the latest exchange rates, CIG’s A-shares command a premium of over 70% over its H-shares.  

Continuous Capacity Expansion; Stockpiling Ammunition for the AI Computing Wave 

In 2025, CIG was highly active in capacity expansion and supply chain layout, stockpiling sufficient "ammunition" to seize the historic opportunity presented by the AI computing wave.  

NewTimeSpace has learned that after nearly two years of construction, CIG’s new production base in Jiashan was put into use in mid-2025 and quickly reached full capacity based on its design.  

Furthermore, the company intends to increase capital in its US subsidiary by approximately US$100 million to expand optical module capacity in North America and Southeast Asia, further enhancing its long-term competitiveness.

According to the investor relations activity disclosure in November 2025, the company is advancing optical module capacity construction in line with strategic planning and market demand. The goal is for the annualized capacity of the 800G series products to reach 2 million units (total scope, including domestic and overseas factories) by the end of 2025.

In 2026, capacity expansion will continue, with the overseas capacity targeting an annualized goal of 2 million units.

Additionally, CIG has a clear layout for 1.6T optical modules. During a survey in November 2025, the company noted that relevant product test data showed excellent performance, with some 1.6T products entering the small-batch supply stage; large-scale shipments are expected in the first quarter of 2026. The company expects 1.6T products to account for approximately 20% of total shipments for the full year of 2026, with an upward trend expected thereafter.

However, CIG also admitted that due to delivery delays from core silicon photonics engine suppliers, the mass production timeline was pushed from the original 2025 plan to 2026. This delay perhaps reveals a universal bottleneck currently facing the industry: the shortage of upstream optical chips.

Nomura estimates that while the advanced optical chip capacity of major global suppliers will increase by more than 80% year-on-year in 2026, it will still lag behind demand by 5% to 15%.

Lumentum, an upstream optical chip manufacturer and industry leader, revealed that its entire product line is facing capacity emergencies, particularly for EML and CW lasers used in data center optical modules, where demand far exceeds supply. Lumentum's EML lasers have already been fully booked for 2026 capacity, and its core customers are signing two-year supply agreements to ensure future shipment certainty.

As industry analysis suggests, competition among top-tier manufacturers has shifted from downstream module assembly and manufacturing capabilities forward to the control and synergy of the upstream core component supply chain.

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