Buoyed by news of its optical communication asset acquisition, Landun Optoelectronics (300862.SZ) has witnessed its stock price double over the past month. However, this surge contrasts sharply with the company's underlying fundamentals, which are characterized by dwindling revenue and persistent losses.

Securities Star reports that Landun Optoelectronics' environmental monitoring business, its main revenue source, has underperformed, with both revenue and gross profit margins declining. Additionally, impairment losses are further eroding the company's profit margins. Amid these losses, the company's cash flow is also in a precarious state. Faced with sluggish performance, Landun Optoelectronics is now seeking breakthroughs through mergers and acquisitions. After a failed cross-border investment in a semiconductor enterprise, the company is now turning its attention to optoelectronics firms in hopes of reversing its loss-making trend.

01. Gross Profit Margins Decline Across Core Businesses

Public records indicate that Landun Optoelectronics specializes in the development, production, software development, data application, and services of high-end analytical and measurement instruments. Its products and services are primarily utilized in environmental monitoring, meteorological observation, and other fields.

Securities Star highlights that the company's performance has been lackluster in recent years. Since 2022, revenue has been on a downward trajectory due to intensified industry competition, delayed project construction, and rising costs. Revenue plummeted from 764 million yuan in 2022 to 399 million yuan in 2025, marking a 48% overall decline, and the company incurred losses last year.

In the first half of 2026, Landun Optoelectronics' revenue continued to contract, reaching 179 million yuan, a 3.63% year-on-year decrease. Net profit attributable to shareholders stood at -7.4433 million yuan, though the loss narrowed year-on-year.

By business segment, in the first half of 2026, the company's environmental monitoring and traffic management revenues were 151 million yuan and 23.2416 million yuan, respectively, with year-on-year changes of -1.51% and 7.16%. Corresponding business gross profit margins were 22.92% and 21.05%, down 3.05 and 4.21 percentage points year-on-year, respectively.

It is clear that environmental monitoring, the company's primary revenue source, is grappling with declining revenue and gross profit margins. Under pressure from both core businesses, Landun Optoelectronics' comprehensive gross profit margin for the first half of the year was 22.35%, down 4.05 percentage points year-on-year.

Furthermore, asset impairment and credit impairment losses have significantly impacted Landun Optoelectronics' net profit. Due to inventory write-downs and contract asset impairments, the company's asset impairment amount in the first half of the year was 5.4237 million yuan. Meanwhile, provisions for bad debt losses on accounts receivable and other receivables resulted in a credit impairment loss of 10.628 million yuan during the same period.

Amid the decline in net profit, Landun Optoelectronics' cash flow performance is also dismal. In the first half of 2026, the net cash flow from operating activities was -67.1766 million yuan, indicating a continuous cash drain.

Notably, affected by weaker-than-expected market demand and intensified industry competition, the company's IPO-funded project—the construction of a new factory area and technological transformation project for high-end analytical and measurement instruments—has seen low business order volumes. Since its completion in 2024, the project has yet to achieve profitability. The 2026 semi-annual report reveals that the cumulative benefits realized by the project were -22.7983 million yuan, falling short of expectations.

In stark contrast to its performance, Landun Optoelectronics' stock price has surged over the past month, fueled by news of its optical communication asset acquisition. After resuming trading on August 10, the company's stock hit the daily limit for five consecutive trading days and reached an intraday high of 58.8 yuan per share on August 18, surging over 197.21% in the short term. Its market capitalization soared past 10 billion yuan from 3.5 billion yuan before the suspension. As of the close on September 17, the stock price closed at 50.03 yuan per share, still up 163% compared to before the suspension.

02. Pursues M&A After Failed Semiconductor Investment

Faced with performance pressures, Landun Optoelectronics is exploring new growth avenues through acquisitions.

In August of this year, the company unveiled a restructuring plan, proposing to acquire a controlling stake in Suzhou Lanchuang Technology Co., Ltd. (hereinafter referred to as 'Lanchuang Technology') through a combination of share issuance and cash payment. It also plans to raise counterpart funds to support the cash consideration in this restructuring transaction. To date, the audit and assessment work for this transaction has not been completed, and the assessed value and transaction price of the target assets remain undetermined.

Lanchuang Technology's core products are high-performance vacuum coating equipment essential for the preparation of ultra-narrowband thin-film filters. Its direct downstream customers are primarily manufacturers of high-end optical filters, optical chips, lasers, and other precision optical devices.

In terms of performance, although Lanchuang Technology's revenue is lower than Landun Optoelectronics, its profitability surpasses that of the listed company. In 2025 and the first half of 2026, benefiting from rapid growth in equipment demand driven by downstream capacity expansion, Lanchuang Technology's business scale continued to expand, with revenues of 33.5568 million yuan and 171 million yuan, and net profits of 11.2806 million yuan and 102 million yuan, respectively. Upon completion of the acquisition, Lanchuang Technology will be consolidated into Landun Optoelectronics' financial statements, significantly boosting its profitability and potentially leading to profitability.

Behind this acquisition, the capital布局 of the actual controllers, Yuan Yonggang and Wang Wenjuan, has also garnered significant market attention. Yuan Yonggang's capital empire extends beyond Landun Optoelectronics; he also controls two listed companies, Dongshan Precision and Anfu Technology. Under Yuan Yonggang's capital operations, both Dongshan Precision and Anfu Technology have experienced substantial growth in their stock prices and market capitalizations over the past year. These past successes may explain why Landun Optoelectronics has attracted capital pursuit.

Securities Star notes that prior to this acquisition, Landun Optoelectronics had attempted to enter the semiconductor sector but ultimately failed. In 2023, the company began laying the groundwork in Xingsi Semiconductor, investing 180 million yuan in its financing round and acquiring a 5% stake. At that time, Xingsi Semiconductor had a post-investment valuation of approximately 3.6 billion yuan, with an appreciation ratio of approximately 5142.86%, and had not yet achieved profitability, recording a loss of 420 million yuan in 2023.

Based on optimism about the application prospects of domestic baseband chips in 5G FWA (Fixed Wireless Access) and satellite internet fields, Landun Optoelectronics chose to further its investment. In July 2024, the company unveiled another investment plan, proposing to invest an additional 80 million yuan to acquire a 3.48% stake in Xingsi Semiconductor. Landun Optoelectronics stated at the time that some chips and modules developed and produced by Xingsi Semiconductor were expected to see large-scale commercialization in 2025.

However, this additional investment plan failed to materialize for an extended period. In December 2025, Landun Optoelectronics terminated the relevant transaction, citing the need to 'control investment and reduce the impact of external investments on the company.' Further investigation reveals that Xingsi Semiconductor's inability to turn around its losses may have been a key reason for Landun Optoelectronics to terminate the additional investment.

The 2024 annual report and 2025 semi-annual report disclose that Xingsi Semiconductor's net losses were 337 million yuan and 141 million yuan, respectively, failing to achieve profitability. Given Landun Optoelectronics' current weak performance, continuing to increase its investment would not only yield short-term returns but could also further drag down its own performance. (This article is first published by Securities Star, Author | Li Ruohan)

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