In-Depth Analysis of Client Concentration Risk for Lieqi Intelligence

Based on the obtained information, I have prepared a professional analysis report for you:

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As a supplier of optical module packaging and testing equipment, Lieqi Intelligence has formed a deeply integrated cooperative relationship with Zhongji InnoLight. According to data disclosed in the prospectus, Zhongji InnoLight has remained Lieqi Intelligence’s largest client in recent years, with its revenue share in each period reaching

[1]. In terms of absolute amounts, from 2022 to 2024, Lieqi Intelligence’s sales to Zhongji InnoLight were RMB 82.8153 million, RMB 180 million, RMB 319 million, and RMB 161 million respectively, maintaining a high annual growth rate[1].

This high level of dependency has historical roots. Founded in 2015, Lieqi Intelligence successively delivered its first coupling equipment, first aging testing equipment, first eutectic die bonding equipment, and first die bonding equipment to Zhongji InnoLight between 2016 and 2020, gradually becoming a key supplier of packaging equipment for Zhongji InnoLight[1]. The cooperative relationship between the two parties is stable. Between April 2022 and May 2025, they signed 6 representative procurement orders with a total contract value of

, and the highest single order amount reached RMB 82.716 million[1].

The rapid development of Lieqi Intelligence is highly synchronized with the capacity expansion of Zhongji InnoLight. From 2022 to 2024, Lieqi Intelligence’s revenue grew from RMB 145 million to RMB 543 million,

; its net profit soared from RMB 35.1172 million to RMB 182 million, [1]. However, obvious signs of growth slowdown emerged in 2024: the growth rate of Zhongji InnoLight’s procurement from Lieqi Intelligence slowed by approximately 40 percentage points, causing Lieqi Intelligence’s revenue growth rate to drop by nearly 12 percentage points year-on-year[1]. This high level of correlation means that if Zhongji InnoLight’s procurement strategy changes, Lieqi Intelligence’s performance will be significantly impacted.

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The client concentration issue faced by Lieqi Intelligence is not an isolated case, but is closely related to the competitive landscape of the downstream optical module industry. According to industry data, from 2023 to 2024, Zhongji InnoLight

in the rankings released by the authoritative institution LightCounting[2]. Zhongji InnoLight is deeply tied to North American cloud giants: it is Google’s largest optical module supplier (with a market share of over 50% in 800G optical modules), holds a market share of approximately 30%-40% in Amazon’s 800G optical module market, and is also a key supplier of 400G optical modules for Meta and Microsoft[2].

The high concentration of downstream clients is directly transmitted to the equipment supplier level. The prospectus shows that Lieqi Intelligence’s

in respective periods[1], which is consistent with the highly concentrated competitive landscape of the downstream optical module industry.

The cooperation between Lieqi Intelligence and Zhongji InnoLight is not a simple buyer-seller relationship, but is based on in-depth technical adaptability. Lieqi Intelligence’s medium-to-high precision eutectic and die bonding equipment, coupling equipment, and aging testing equipment cover multiple core links in the optical module packaging and testing process, from physical packaging to final performance verification, and support

, which highly aligns with Zhongji InnoLight’s capacity expansion needs for 800G optical modules[1]. This technical adaptability not only constitutes a competitive barrier, but also deepens client dependency to a certain extent.

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Data for 2024 has already shown the direct impact of client concentration. In that year, the growth rate of Zhongji InnoLight’s procurement scale slowed by 40 percentage points, and Lieqi Intelligence’s revenue growth rate immediately dropped by nearly 12 percentage points[1]. This sensitive response indicates that Lieqi Intelligence’s dependency on a single large client has already had a substantive impact on the stability of its performance.

Under the pattern of high dependency on a single client, Lieqi Intelligence’s bargaining power may be restricted. Although its gross profit margin remains at a high level (49.33%, 48.77%, 50.32%, and 48.62% in respective periods)[1], with the slowdown in Zhongji InnoLight’s procurement growth, the possibility that it will force suppliers to reduce prices through price cuts or adjustments to procurement proportions in the future cannot be ruled out.

According to the prospectus, Lieqi Intelligence is facing patent litigation risks[1]. Against the background of high client concentration, such legal disputes may affect the cooperative relationship with large clients, thereby triggering a chain reaction on performance.

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Leveraging its cooperation experience with Zhongji InnoLight, Lieqi Intelligence has promoted its equipment solutions to other optical module manufacturers. Its clients for optical module packaging and testing equipment also include

and others[1]. In 2024, Lieqi Intelligence ranked in market share for optical module die bonding equipment, and for optical module coupling equipment[1], which provides strong endorsement for its expansion to new clients.

Lieqi Intelligence is actively expanding into other sectors of the semiconductor industry. From 2022 to 2024, Lieqi Intelligence’s revenue from “Client 5” (a well-known client in the RF industry) was RMB 7.9602 million, RMB 32.7309 million, RMB 18.9091 million, and RMB 7.6718 million respectively[1]. In February 2025, it signed another contract worth RMB 6.4003 million with this client for optical module packaging and testing equipment[1]. In addition, the

[1], marking substantive progress in its expansion into the semiconductor packaging field.

In Lieqi Intelligence’s main business revenue, the contribution ratios of die bonding equipment, coupling equipment, and aging testing equipment were 67.44%, 79.53%, 78.92%, and 76.54% respectively[1]. Among them, die bonding equipment performed particularly well: its sales revenue grew by 105.99% and 163.27% year-on-year in 2023 and 2024 respectively, exceeding the company’s overall revenue growth rates of 99.47% and 87.74% in the same periods[1]. This product structure diversification helps to disperse the risk of relying on a single product line.

Lieqi Intelligence’s automated equipment and turnkey solutions business covers fields such as automotive, semiconductors, and optical communications, with key clients including

and others[1]. Although the revenue share of this business segment dropped from 32.57% in 2022 to 21.08% in 2024[1], it still has great potential for client structure optimization.

As of June 30, 2025, Lieqi Intelligence holds

, and retains numerous processes and proprietary technologies in the form of technical know-how and trade secrets, with the capability to develop full-process equipment for optical module packaging[1]. Continuous strengthening of technical advantages helps to enhance attractiveness to various clients and reduce dependency on a single client.

Considering the global characteristics of the optical module industry, the global service capability of equipment suppliers is also crucial. To ensure stable delivery to large North American clients, Zhongji InnoLight has been laying out overseas production capacity since 2019, including the construction of a factory in Thailand[2]. If Lieqi Intelligence can simultaneously enhance its global service capability, it will help to secure more orders from international clients.

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According to the latest data, Lieqi Intelligence’s client structure optimization has achieved initial results. In 2024, the revenue share of the top five clients dropped from 93.17% in 2023 to

[1], indicating an improvement in client concentration. Progress has also been made in developing clients in the semiconductor industry, providing new support points for future performance growth.

However, Zhongji InnoLight’s revenue contribution ratio further rose to

in the first half of 2024[1], indicating that the client concentration issue cannot be fundamentally reversed in the short term. Considering the highly concentrated nature of the optical module industry itself, as well as Zhongji InnoLight’s leading position in the global market, Lieqi Intelligence will still face a situation of high client concentration in the foreseeable future.

For Lieqi Intelligence, reducing client concentration risk requires

strategic measures:

1. Accelerate Expansion into the Semiconductor Field
   : Make full use of new products such as silicon carbide (SiC) pre-sintering equipment to develop more semiconductor packaging and testing clients;
2. Enhance International Market Development Capability
   : Leverage technical advantages and industry status to gain access to the supply chains of more international optical module manufacturers;
3. Strengthen R&D Investment
   : Continuously improve product performance and process adaptability, and use technical advantages to gain stronger client stickiness and broader client coverage;
4. Prudently Evaluate M&A Opportunities
   : Rapidly expand the client base and product line coverage through external expansion;

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The issue of Lieqi Intelligence relying on Zhongji InnoLight for over 90% of its revenue is essentially the result of the combined effects of the characteristics of the optical module equipment industry and the company’s development stage. In the short term, completely eliminating client concentration risk is neither realistic nor economical; however, through multiple paths such as client structure diversification, horizontal product line expansion, and strengthening technical barriers, the company can gradually reduce its dependency on a single client while maintaining good cooperation with Zhongji InnoLight. Data from 2024 shows that this strategic adjustment has achieved initial results, but sustained efforts are still needed to achieve a fundamental transformation.

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[1] Rui Caijing - “Lieqi Intelligence’s IPO Net Profit Soars, Luo Chao Shows No Fear of Patent Litigation” (https://m.rccaijing.com/news-7414220957558699472.html)

[2] Sina Finance - “Behind Zhongji InnoLight’s Over RMB 600 Billion Market Value: Technical Positioning, a ‘Snake Swallows Elephant’ Cross-Border Gamble” (https://finance.sina.com.cn/stock/s/2025-12-17/doc-inhcazqc2251247.shtml)