Summary of Key Points
On August 18th, Frequency Precision Laser (FPL) made its debut on the STAR Market, offering shares at a record high issue price of 186.88 RMB per share. The stock opened with a surge of 488%, reaching 1100 RMB, resulting in a potential profit of up to 556,600 RMB for each lot of 500 shares purchased, setting a new record for the highest single-share profit from a newly listed company under the registration-based IPO system. Founded less than 10 years ago by Dr. Zhang Lei, a post-85s graduate from the Shanghai Institute of Optics and Mechanics, Chinese Academy of Sciences (CAS), FPL specializes in the development of precision lasers. The company has addressed critical challenges in the fields of quantum technology and semiconductors by providing high-quality light sources, achieving rapid growth in revenue (a compound annual growth rate of 73% over the past three years). However, it also faces risks such as an inflated valuation and a reliance on imported components.
Why is This New Stock So Attractive?
The key to making money from a new stock lies in a combination of a high issue price and a substantial increase in its value:
- High Issue Price: The price of 186.88 RMB per share is the highest for A-share offerings this year, meaning the cost per lot (500 shares) amounts to nearly 93,500 RMB.
- Substantial Price Increase: The stock soared by 488% at opening, reaching a peak of 1300 RMB per share, representing a nearly sevenfold increase in market value. Based on the highest price, the potential profit per lot would be approximately 556,600 RMB—more than some people's annual salaries.
- Promising Industry Trends: Precision lasers are essential for advanced quantum technology and semiconductor manufacturing, both of which are highly favored by the Chinese government. As a result, there is strong market optimism about the company's future growth, driving up its stock price.
How Does Frequency Precision Laser Stand Out?
FPL's core competitiveness lies in its ability to solve problems that others have not been able to address:
- Strong Technical Background: The founder, Dr. Zhang Lei, and his team of five key technical experts all hold doctoral degrees. FPL focused on developing precision lasers needed for quantum technology, a field where China previously relied entirely on imports (with each device costing millions of RMB).
- Unique Technological Approach: Instead of simply copying foreign products, FPL developed its own technology using a combination of seed sources, fiber amplification, and frequency stabilization. This approach results in lasers that are more stable and perform better than imported alternatives, enabling the company to move from following to leading the industry.
- Positioning in Two Lucrative Fields:
- Quantum Technology: FPL holds a 9.2% global market share and is the leader in China, serving numerous quantum research teams, including those at the CAS.
- Semiconductors: The company entered this market in 2023 and saw its revenue quadruple over three years (from 25 million RMB to 104 million RMB), providing services to leading companies like ZhongAn Semiconductor while replacing imported components.
- Outstanding Performance: FPL has achieved a compound annual growth rate of 73% in revenue and 67% in net profit, with a gross margin consistently above 65%. It also has orders worth 494 million RMB (1.18 times last year's revenue), indicating strong growth prospects.
Who Has Benefited from the IPO?
The success of FPL's IPO benefits not only those who purchased shares:
- Founder Zhang Lei: He directly and indirectly owns 46.54% of the company, worth approximately 22.4 billion RMB at the highest stock price. Before the listing, he also earned an additional 33.46 million RMB through the sale of existing shares and dividends.
- Early Investors: For example, Huiguang Rixin invested 2.4 million RMB in FPL shares in 2021, resulting in a substantial profit when the stock opened at a higher price. Lianxin Capital purchased shares for 145 RMB per share in June 2025 and made a sixfold return within 14 months.
- Strategic Partners: Ten companies in the supply chain, including BOE and SMIC, bought shares at the issue price of 186.88 RMB and immediately realized a 4.88-fold profit, taking advantage of the initial market surge.
Caution Amidst the Excitement
Despite the success, several risks should not be overlooked:
- Inflated Valuation: The company's valuation on the first day of trading far exceeds the industry average (85 times for comparable companies), suggesting potential price corrections.
- Limited Liquidity: Only 19% of the shares are available for trading at the beginning of the listing, which can lead to volatile stock prices due to high turnover (81% of shares were traded on that day).
- Import Dependency: Some critical components still rely on European and American brands, posing risks if there are supply chain disruptions.
- Technological Obstacles: The rapid pace of innovation in precision laser technology means FPL may face challenges if it cannot maintain its lead.
In Conclusion
Frequency Precision Laser has illuminated the potential of advanced technologies with its innovative solutions. However, investors should focus on whether these technologies will continue to be valuable over the long term, rather than short-term gains. (This analysis does not constitute investment advice.)