Title: A New King in China’s Equity Market: Zhongji Xuchuang Tops Fund Holdings — What Global A-Share Investors Need to Know
Published on January 24, 2026 | For International Investors in Chinese Equities
In a landmark shift reflecting the rapid evolution of China’s tech and industrial landscape, Zhongji Xuchuang (300308.SZ)—a leading optical module manufacturer with a market cap of RMB 650 billion (~USD 90 billion)—has dethroned Contemporary Amperex Technology (CATL) as the #1 holding among China’s actively managed equity mutual funds, according to Q4 2025 fund disclosures.
This isn’t just a reshuffling of portfolio weights—it’s a powerful signal about where institutional capital sees the future of China’s economy: AI infrastructure, next-gen communications, and strategic tech self-reliance.
For overseas investors accessing A-shares via Stock Connect or QFII channels, understanding this pivot is critical.
📊 The New Top 10: A Tech-Heavy, Cyclical Mix
As of Q4 2025, the top 10 holdings of China’s active equity funds (including stock-focused, hybrid, and flexible allocation funds) are:
| Rank | Company (Ticker) | Sector | Fund Holding Value (RMB) |
|---|---|---|---|
| 1 | Zhongji Xuchuang (300308.SZ) | Optical Modules / AI Hardware | ¥76.8B |
| 2 | Eoptolink (300502.SZ) | Optical Components | ¥63.8B |
| 3 | CATL (300750.SZ) | EV Batteries | ¥63.0B |
| 4 | Tencent (0700.HK) | Internet | ¥57.4B |
| 5 | Zijin Mining (601899.SH) | Gold / Copper | ¥36.8B |
| 6 | Alibaba (09988.HK) | E-commerce / Cloud | ¥31.0B |
| 7 | Cambricon (688256.SH) | AI Chips | ¥29.1B |
| 8 | Luxshare Precision (002475.SZ) | Electronics Manufacturing | ¥28.0B |
| 9 | Kweichow Moutai (600519.SH) | Premium Spirits | ¥25.8B |
| 10 | Dongshan Precision (002384.SZ) | PCBs / Optics Packaging | ¥24.4B |
Notably:
- Three optical/AI hardware firms now sit in the top 10.
- Zijin Mining rose from #8 to #5—highlighting renewed interest in commodities.
- SMIC (688981.SH), once a top-10 staple, has fallen out entirely.
- Fund ownership in Dongshan Precision and Eoptolink exceeds 20% and 16% of their free float, respectively—indicating deep institutional conviction.
🔍 Why Zhongji Xuchuang? The AI Infrastructure Play
Zhongji Xuchuang is a global leader in 800G/1.6T optical transceivers, essential components for AI data centers and high-speed networking. With major clients including NVIDIA, Meta, and Microsoft, the company sits at the heart of the global AI compute boom.
Its rise reflects two key trends:
- China’s push for AI sovereignty: Domestic cloud giants (Alibaba, Tencent, Baidu) are rapidly building AI clusters, requiring homegrown optical solutions.
- Export resilience: Despite U.S. tech restrictions, Chinese optical firms remain indispensable in global supply chains due to scale and cost leadership.
At RMB 585/share (as of Jan 23, 2026), the stock trades at a premium—but one justified by >40% YoY earnings growth and dominant market share.
🔄 Sector Rotation: From Growth to “New Quality Productive Forces”
Fund managers didn’t just swap stocks—they rotated entire sectors.
Top Sectors Added (Q4 2025):
- Nonferrous Metals (+1.22% allocation)
- Basic Chemicals (+1.13%)
- Non-Bank Financials (+0.81%)
- Communications & Machinery
Top Sectors Reduced:
- Computer (-1.34%)
- Media (-0.98%)
- Defense (-0.75%)
- Also notable: Electronics, Pharma, Power Equipment
This shift reveals a dual strategy:
- Cyclical recovery bets: Metals and chemicals benefit from post-pandemic global reindustrialization and China’s “Five-Year Plan” stimulus.
- Tech refinement: Moving from broad “tech” to high-conviction enablers of AI and advanced manufacturing (e.g., optics, robotics, semiconductors).
As Liu Youhua of PPAIW Wealth Research notes:
“Funds are chasing profit visibility, not just narrative. Optical modules deliver real revenue from real AI deployments.”
🌐 What This Means for Overseas A-Share Investors
- Reassess your tech exposure: If your A-share portfolio is heavy in legacy electronics or software, consider reallocating toward AI infrastructure enablers like Zhongji Xuchuang, Eoptolink, and Cambricon.
- Don’t ignore cyclicals: Zijin Mining’s surge shows that commodities tied to electrification and AI data centers (copper!) are back in favor.
- Watch fund flows, not just fundamentals: With active funds holding ~11% of Zhongji Xuchuang’s float, sentiment and positioning matter as much as earnings.
- Be wary of overconcentration: The top 10 stocks now account for a significant slice of fund assets—increasing systemic correlation risk.
⚠️ Risks to Consider
- Valuation: Zhongji Xuchuang trades at ~50x forward P/E—rich by historical standards.
- Geopolitics: U.S.-China tensions could disrupt export markets or trigger delisting fears.
- Profitability pressure: Optical module margins may compress as competition intensifies.
✅ Bottom Line
The reign of battery and internet giants is giving way to a new era: the age of AI infrastructure. Zhongji Xuchuang’s ascent symbolizes China’s strategic pivot toward technologies that power—not just consume—artificial intelligence.
For global investors, this isn’t just about one stock. It’s about recognizing that China’s market leadership is shifting from consumer platforms to industrial enablers—and positioning accordingly.
Stay focused on companies that are building the rails of the AI economy, not just riding on them.
Disclaimer: This blog is for informational purposes only and does not constitute financial advice. A-share investing carries risks including currency, liquidity, and regulatory changes. Always consult a qualified advisor.
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