Performance surged by 925%! The 'King of Stocks' Lianxun Instrument, market value evaporated by over 91 billion

Although the AI narrative remains strong, the industry's bubble cannot be ignored.

Kim Young-ik, a prominent Korean economist and adjunct professor at Hanyang University, recently issued a warning: while the artificial intelligence technological revolution is real, it does not mean that markets can avoid the formation and bursting of asset bubbles.

He stated that the current market's excessive optimism, continuously expanding debt scale, and inflated asset prices share high similarities with the characteristics observed before several major economic crises in history.

Looking at the entire AI industry chain, no single segment can maintain ultra-high profit margins for an extended period. Based on this logic, the super cycle in the storage industry is likely nearing its end.

From a fundamental industry perspective, the current shortage of storage for AI applications will likely persist in the short term. However, as global tech giants gradually slow their capital expenditure pace, overall market demand for AI hardware will also weaken accordingly.

Influenced by this expectation, the market has begun to rationally scrutinize high-growth sectors such as storage, optical modules, and GPUs. Against this backdrop, valuations of leading companies in these sectors have continued to correct, with some targets lacking solid earnings support experiencing particularly significant recent adjustments.

Recently, Xinyisheng and Tianfu Communication, part of the "Yi Zhong Tian" trio among the top three optical module manufacturers, successively released their first-half 2026 performance forecasts. Financial data shows that Xinyisheng's net profit for the first half ranged from 7 billion to 8 billion yuan, representing a year-on-year increase of 77.56% to 102.93%, broadly in line with market expectations; Tianfu Communication's net profit for the first half was between 1.124 billion and 1.304 billion yuan, a year-on-year growth of 25% to 45%, performing slightly below previous market expectations.

Following the release of these two performance forecasts, the secondary market performance of both enterprises remained relatively flat. Compared to the earnings certainty in the optical module sector, the upstream industry, known as the "shovel seller" for optical modules, Lianxun Instrument, showed relatively weaker market performance.

Statistical data shows that since its stock price peaked and began to fall back on June 25, Lianxun Instrument's stock price accumulated a decline of over 30% in less than a month, wiping out over 91 billion yuan in market value. As of the latest close, Lianxun Instrument's total market capitalization stood at 193.8 billion yuan. Notably, even after the significant correction, Lianxun Instrument's current stock price still surpasses that of Guizhou Moutai, Cambricon, Yuanjie Technology, and other targets, firmly holding the title of A-share "Stock King."

So, can Lianxun Instrument support its current valuation? Will future earnings continue to materialize?

On July 22, Lianxun Instrument officially released its first-half 2026 performance forecast. The announcement indicated that the company expects to achieve a net profit of 510 million to 580 million yuan for the first half, a year-on-year increase of 801.96% to 925.75%; it also expects non-GAAP net profit of 500 million to 570 million yuan, a year-on-year increase of 829.77% to 959.94%.

Regarding the reasons for the substantial earnings growth, Lianxun Instrument explained: benefiting from the rapid iteration of AI technology and the continuous rise in global computing power demand, the acceleration of global data center construction has driven high-speed growth in demand for high-speed optical communication products. Continuous capacity expansion by optical module and optical chip manufacturers has further pulled market demand for the company's communication test instruments and optoelectronic device testing equipment, ultimately driving a significant surge in the company's performance.

Data shows that the company's net profit for the same period last year was only 56.5438 million yuan, with non-GAAP net profit at 53.7766 million yuan. In other words, the core reason for its explosive earnings growth is the low base effect from the previous year.

Looking at a longer time horizon, the company achieved revenue of 488 million yuan in the first quarter of this year, up 142.52% year-on-year; net profit was 119 million yuan, up 515.17% year-on-year. Combining this with the mid-year report forecast, Lianxun Instrument's second-quarter net profit range is estimated at 391 million to 461 million yuan.

It is certain that the company's Q2 performance continues its high-growth trend, but even if earnings continue to explode, it will still be difficult to digest the current ultra-high valuation.

As of the latest close, Lianxun Instrument's dynamic P/E ratio stands at a staggering 407 times. Even with short-term earnings surging, the valuation bubble remains obvious.

Analyzing from a medium-to-long-term perspective, the global AI industry as a whole is still in a high-growth cycle, and the capital expenditure scale of leading tech enterprises remains huge. However, market divergence between bulls and bears is continuing to widen.

Industry analysis points out that 57% of the capital expenditure of global leading AI supercomputing tech companies is used to procure semiconductor products from SK Hynix and Samsung Electronics. For AI enterprises, to achieve real profitability, revenue and profits must cover the high costs of semiconductor hardware investments, and whether the industry can currently reach this profitability level remains highly uncertain.

The market is also forming a consensus: investment institutions relying solely on long-term optimistic expectations for the AI industry to continuously bet on companies that have not yet achieved stable profitability will eventually face substantial loss risks. Once global tech giants cool down their capital expenditures and the overall AI investment scale shrinks, all stock prices boosted by optimistic expectations will face pressure for valuation corrections.

Lianxun Instrument, standing at the forefront of the trend, similarly faces this common industry problem, and questions about whether its future earnings can sustain high growth have arisen in the market.

In summary, relying solely on current earnings growth rates makes it difficult to support Lianxun Instrument's ultra-high valuation. Once the hype narrative around the AI industry gradually cools down, caution is needed regarding the risk of the company's valuation bubble bursting.