Core Viewpoint - After a significant rise in stock price, major shareholders of Zhongji Xuchuang have begun to reduce their holdings, indicating potential profit-taking behavior amidst concerns about high valuations and market conditions [1][2][4]. Company Performance - In the first half of the year, Zhongji Xuchuang achieved a revenue of 14.79 billion yuan, representing a year-on-year growth of 37.0%, and a net profit of nearly 4 billion yuan, up 69.4% year-on-year [2]. - For the second quarter, the company reported a revenue of 8.11 billion yuan, a year-on-year increase of 36.25%, and a net profit of 2.41 billion yuan, reflecting a year-on-year growth of 78.8% [2]. Shareholder Actions - Major shareholder Liu Sheng, who is also the chairman and president, and his family have executed significant share reductions, with Liu's family potentially cashing out over 1 billion yuan [1]. - Wang Xiaodong, the executive vice president, sold nearly 500,000 shares at an average price of around 400 yuan, totaling approximately 200 million yuan [1]. Market Conditions - The stock price of Zhongji Xuchuang has surged from under 150 yuan to nearly 450 yuan, with a current price of 409.4 yuan and a TTM P/E ratio exceeding 66 times [2]. - Analysts suggest that while the demand for optical modules remains strong, the stock's rapid appreciation may have outpaced future earnings growth, leading to concerns about overvaluation [2][4]. Industry Outlook - The optical communication industry is facing global supply chain restructuring and geopolitical risks, which may introduce uncertainties in operations [3]. - Despite potential risks, the company is expected to maintain its leading position in the industry by expanding production capacity and enhancing high-end product delivery capabilities [3].