On July 9, Zhongrun Optics unveiled its plan to issue A-shares to a select group of no more than 35 specific investors, aiming to raise a substantial sum of no more than 1.0036 billion yuan. This capital injection is earmarked for two pivotal projects: the enhancement of its high-precision optical component smart manufacturing base and the upgrade of its R&D center.

In terms of project breakdown, a hefty 900.7 million yuan will be funneled into the smart manufacturing base, while 102.9 million yuan will be dedicated to upgrading the R&D center. As per the announcement, these projects are slated for completion within 24 months, with production set to commence within 36 months.

The smart manufacturing base is designed to cater to cutting-edge fields such as intelligent mobile machine perception, high-definition imaging and display, advanced manufacturing, and inspection. Its primary goal is to bolster batch manufacturing capabilities for an array of lens products while refining optical component processes, including precision glass aspheric molding and ultra-precision machining. The R&D center, in turn, will work in tandem with the manufacturing base, bridging the gap from R&D validation to engineering transformation, thus creating a seamless full chain.

On the same day, the company also inked an investment agreement valued at approximately 1 billion yuan with the Administrative Committee of the Jiaxing High-Tech Industrial Development Zone. The concurrent progress of private placements and local investments underscores management's unwavering resolve to expand in the precision optics sector and highlights the company's deep-rooted integration with regional industrial resources.

However, before venturing into new production capacities, it is crucial to assess the progress and current status of the company's previous fundraising endeavors. The company's prior IPO-funded projects, namely the "High-End Optical Lens Smart Manufacturing Project" and the "R&D Center Upgrade Project," faced delays twice due to fluctuations in downstream demand. Nevertheless, as per the company's announcement in March 2026, these projects have now been successfully completed, with the remaining raised funds of 8.2065 million yuan being permanently allocated to supplement working capital. Despite the initial setbacks, the previous projects have finally come to fruition, and this current expansion dwarfs the IPO projects in both scale and complexity.

As Zhongrun Optics unveils its fundraising strategies, it is also experiencing rapid performance growth. In 2025, its annual revenue soared to 658 million yuan, marking a year-on-year increase of 44.75%, with net profit attributable to shareholders reaching 63.0462 million yuan, up 18%. The growth trajectory accelerated further in 2026, with first-quarter revenue hitting 188 million yuan, a year-on-year surge of 67.7%, and net profit attributable to shareholders reaching 14.9 million yuan, up 44.7%.

Notably, revenue growth has significantly outpaced profit growth. From a cost perspective, operating costs escalated by 47.78% year-on-year in 2025, while administrative expenses rose by 46.39%, both surpassing revenue growth. In 2025, the company's R&D expenses reached 72.5021 million yuan, a year-on-year increase of 49%, accounting for 11.02% of revenue. In the first quarter of 2026, R&D investment soared to 20.92 million yuan, a year-on-year increase of 51.25%. Multiple factors continue to exert pressure on short-term profit release.

In addition to fundraising for expansion, Zhongrun Optics's other strategic move in recent times was the completion of the acquisition of a 51% stake in Dais Optics in July 2025, with a transaction value of approximately 158.1 million yuan.

Dais Optics, a national-level specialized, sophisticated, unique, and innovative "Little Giant" enterprise, operates in sectors such as industrial lasers, semiconductor equipment, and automotive LiDAR. This acquisition bolsters the company's self-sufficiency in precision optical components, transforming Zhongrun Optics from a mere lens manufacturer into a comprehensive platform driven by both optical lenses and components.

Meanwhile, through the Runyang Fund, the company has strategically invested in three enterprises: Lanxing Optical, Sanshiyuan, and Jinding Optics. From product diversification to industrial chain investment, Zhongrun Optics is constructing a vertically integrated industrial footprint centered on optics. This unique blend of "internal development + external integration" is a rare sight in the precision optics industry.

Currently, the precision optics industry is at a long-term inflection point, with rapid expansion in downstream applications ranging from smartphones to high-end fields such as automotive, AR/VR, and machine vision. This presents a golden opportunity for domestic optical companies to replace imports. Zhongrun Optics leads the global pack in the high-magnification zoom security lens segment, with technological accumulation serving as its formidable moat. However, industry titans like Sunny Optical and O-Film still wield significant advantages in terms of scale and distribution, and industry competition is far from over.

Regarding this private placement, the company has also candidly outlined the risks in its prospectus. Given that the implementation of the funded projects takes time, there is a potential for earnings per share dilution in the short term. Calculating based on the maximum issuance of 37.2851 million shares, if fully issued, the total share capital will expand by approximately 30%. The aforementioned institutional forecast of 154 million yuan in net profit for 2026 is based on the current share capital model and does not account for dilution factors post-private placement. Even if net profit doubles in 2026, the actual increase in earnings per share will be significantly diluted.

Additionally, cash flow pressures warrant close attention. In the first quarter of 2026, the company's net cash flow from operating activities was -12.5209 million yuan, while the full-year 2025 net cash flow from operations decreased by 37.08% year-on-year. During this phase of simultaneous large-scale expansion and M&A integration, the robustness of the company's capital chain will face ongoing challenges.

For Zhongrun Optics, if the 1 billion yuan fundraising is successfully executed, it will undoubtedly add a vital asset to its race in the precision optics sector. However, high valuations, long cycles, and dilution effects make this expansion endeavor fraught with uncertainties. OFweek Optics will continue to closely monitor and report on this unfolding story.