On July 3, Tengjing Technology announced that it plans to invest 35 million yuan from its own or raised funds to establish a wholly-owned subsidiary, Tengjing Vision Technology (Kunshan) Co., Ltd.

The announcement revealed that the Kunshan subsidiary will establish a branch in Nanjing, fully taking over all assets, claims, debts, business, technology, and personnel from the parent company's Nanjing branch. Simultaneously, it will set up a branch in Fuzhou to take over part of the AR consumer optics assets and business, thereby forming a collaborative operational model of 'Kunshan manufacturing + Nanjing R&D + Fuzhou support.'

The logic behind this structure is clear: Nanjing serves as the R&D hub, Kunshan acts as the manufacturing base leveraging local industrial support and geographical policy advantages, while Fuzhou utilizes its existing supply chain capabilities. Each location fulfills its role, consolidating previously dispersed AR optical business resources into an independent legal entity.

From a governance perspective, the new subsidiary has a registered capital of 35 million yuan, with Hong Jie serving as the legal representative. Its business scope focuses on the R&D, production, and sales of consumer optical components and smart wearable optoelectronic display modules.

To understand this strategic move, one must first examine Tengjing Technology's fundamentals. The 2025 annual report shows that the company's revenue reached 586 million yuan, a year-on-year increase of 31.54%; net profit attributable to the parent company was 70.6164 million yuan, up 1.80% year-on-year; and net profit after deducting non-recurring items was 67.2598 million yuan, a year-on-year increase of 1.36%.

In the first quarter of 2026, the company achieved revenue of 171 million yuan, a significant year-on-year increase of 51.17%; net profit attributable to the parent company was 14.4338 million yuan, up 10.74% year-on-year; and net profit after deducting non-recurring items was 14.0084 million yuan, a year-on-year increase of 18.51%.

However, the net profit growth rate in the first quarter was lower than the revenue growth rate. The company explained in the announcement that this was primarily due to the continuous expansion of business scale during the reporting period, strong downstream order demand, corresponding increases in strategic inventory and raw material procurement, and some customer payments still within the credit period.

On the asset side, as of the end of 2025, the company's long-term loans increased significantly by 276.73% compared to the previous year, indicating a clear trend of expansion. By the end of the first quarter of 2026, the asset-liability ratio rose to 34.14%. In this context, investing 35 million yuan from its own or raised funds into an AR subsidiary tests the company's strategic patience outside its main optical communication track.

However, Tengjing Technology is not betting solely on AR. Recently, the company has released multiple business signals: In the cutting-edge field of optical communication, it has established partnerships with OCS manufacturers using MEMS and piezoelectric ceramic solutions, with some products planned for mass delivery in the second half of 2026. OCS is considered a key technological direction for optical interconnects in AI data centers, and the company's positioning in this area is worth noting.

On the capacity front, the company maintained high capital expenditures in 2026, focusing on expanding production of passive components for high-speed optical modules and OCS-related products. The Hefei factory's yttrium vanadate crystal project completed its first phase of expansion; the Thailand factory has been built and is progressing toward production; and the Zhengzhou factory is expected to be operational in the third quarter of 2026.

The global capacity layout and the establishment of the AR subsidiary complement each other, with the former serving the optical communication base and the latter opening up a new battlefield in consumer optics. The optical testing instrument business of the controlled subsidiary, U.S.-based GouMax, is also continuously improving product solutions, while domestic Gaomai Optical Communication has achieved mass production of multiple models of optical testing modules/equipment.

Behind these moves is the continuous heating (continued heating up) of the AR optical sector. AR waveguide + optical engine modules are precisely the core direction of Tengjing Technology's integration. Leveraging its Layout (layout) in key links of the 'upstream crystal materials - midstream optical components/modules - downstream instrumentation' industrial chain, the company aims to transition AR optical modules from the laboratory to large-scale production.

However, the sector's heat also brings risks and uncertainties. Tengjing Technology openly acknowledged multiple risks in the announcement: policy and operational risks in business registration, asset transfers, and tax processing; as well as market competition and operational management uncertainties that may arise after the subsidiary's establishment.

The 35 million yuan investment scale, for Tengjing Technology, which is expanding on multiple fronts, should focus more on its strategic direction than the absolute amount. Establishing an independent legal entity to integrate AR optical business sends a signal far beyond the monetary value itself—it means Tengjing Technology is willing to upgrade AR from an 'option' to a 'strategic priority' and accelerate iteration by isolating risks through independent structuring.

Between the high growth of its main optical communication business and the incubation of new AR business, this precision optics company is seeking a balance point for its second growth curve. The speed of the Kunshan subsidiary's establishment and its subsequent operational efficiency will be the first litmus test for the market to evaluate this strategy.