Analysis of Strong Performance and Risk Warning for Zhenlei Technology (688270)

On January 8, 2026, Zhenlei Technology (688270) saw its share price rise 7.31% to RMB 142, hitting a record high. It has refreshed historical records in 10 trading days in the past month, with an annual gain of 294.29% in 2025[1][2]. The stock entered the “strong stock pool” today, reflecting the market’s high recognition of its short-term momentum. However, there are multiple driving factors behind this strong performance that require systematic sorting.

On the same day, the CSI National Defense Index (399973) rose strongly by 4.27%, driving a general rise of its constituent stocks. Guangwei Composites rose 11.46%, Aerospace Electronics rose 10.00%, and Aerospace Electrical Appliances hit the daily limit[1]. As a core supplier in the fields of electronic countermeasures and RF chips, Zhenlei Technology directly benefits from the overall upward momentum of the sector. The National Defense ETF (512670) rose 4.43% in sync, indicating that institutional funds are pouring into the national defense sector in a concentrated manner[1].

2026 has been positioned as the “Alpha Year of China’s Commercial Aerospace” by multiple institutions[3]. The project of direct satellite connection with phones for the second-generation satellites of China Satellite Network continues to advance. Zhenlei Technology’s CX9840 series RF transceivers are reportedly the only domestic products that can replace the embargoed aerospace-grade chips of the U.S. company ADI, and have been applied to this project[4]. In addition, Galactic Energy will soon implement the launch mission of “Ceres-1 Sea Launch Version (Yao-7)”, which is the first private aerospace launch in 2026[1]. The market logic is gradually shifting from theme mapping to fundamental investment based on supply chain performance realization[3].

In the first three quarters of 2025, the company achieved operating revenue of RMB 302 million, a year-on-year increase of 65.76%; net profit reached RMB 104 million, a year-on-year surge of 579.92%[2]. The better-than-expected performance growth mainly benefits from the volume growth of orders in special fields (data links, electronic countermeasures, wireless communication terminals), the realization of import substitution of aerospace-grade RF chips, and the expansion of civilian fields such as satellite internet[2][4].

Margin trading data shows that as of January 7, the total margin balance reached RMB 1.778 billion, with the financing balance at RMB 1.776 billion. Financing increased by RMB 335 million in the past 10 days, a month-on-month growth of 23.28%[2]. The concentrated influx of leveraged funds provides incremental capital support for the stock price rise, but also lays hidden dangers of a stampede during a pullback.

From a technical analysis perspective, the current trend shows obvious characteristics of acceleration at high levels, and risks of a pullback need to be vigilant.

Having refreshed historical records 10 times in the past month, this continuous record-breaking trend historically often indicates that the strong market has entered the late stage. The trading volume on the day reached 9.2704 million shares, with a transaction value of RMB 1.272 billion and a turnover rate of 4.33%, showing that capital games are intensifying[2]. The short-term gain exceeds 100%, the stock price deviates significantly from the moving average system, and the bias ratio is in a historically high range.

The immediate resistance level is in the historical high range of RMB 145-150; the short-term support level is at RMB 135-138 (the area of the 5-day/10-day moving averages); the strong support level is at RMB 125-130 (the area of the 20-day moving average)[2]. Once the key support level is broken, it may trigger program trading and margin calls, forming a chain reaction.

Data shows that most targets in the “strong stock pool” form a short-term top within 1-3 trading days after entering the list[2]. Combined with the current valuation level and regulatory risks, investors should be cautious about chasing highs in the short term.

Zhenlei Technology’s core competitiveness lies in its domestic substitution capability for aerospace-grade RF transceivers and high-speed, high-precision ADC/DAC chips. The CX9840 series is the only domestic product that can replace the embargoed aerospace-grade chips of the U.S. company ADI, and occupies a leading position in special fields such as electronic countermeasures, data links, and phased array communications[4]. The company’s two core product lines cover RF transceivers and power management chips, forming a complete supply capacity for aerospace-grade products.

Both operating revenue and net profit achieved substantial growth in the first three quarters, reflecting the continuous volume growth of orders in special fields and the accelerated process of import substitution[2]. However, the ROE level of approximately 4.61% indicates that there is still room for improvement in profitability, and the cash flow status needs to be further verified with detailed financial reports.

On December 26, 2025, the company received a “Case Filing Notice” from the CSRC, suspected of illegal and irregular information disclosure[4]. This major negative event is related to previous accounting errors, and the company may face administrative penalties or investor claims. In addition, the actual controller was placed in residential surveillance in September 2025 (later lifted), and there was an accounting error of insufficient basis for recognizing RMB 8.4265 million in revenue in 2022[4]. These historical issues have seriously weakened the credibility of the company’s financial data.

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The strong performance of Zhenlei Technology reveals the deep integration trend between the national defense and military industry and commercial aerospace tracks. The company’s products cover both special fields (military industry) and civilian fields (satellite internet, direct satellite connection with phone projects). This military-civilian integrated business layout enables it to simultaneously benefit from the dual dividends of military expenditure growth and the outbreak of the commercial aerospace industry[4].

From the perspective of the industrial chain, as core components of electronic countermeasures and satellite communications, the scarcity of Zhenlei Technology’s CX9840 series enables it to occupy a favorable position in the supply chain. The U.S. embargo on ADI’s aerospace-grade chips has instead created a window period for import substitution, which is the deep-seated reason for the company’s explosive performance growth[4].

The 23.28% month-on-month growth in financing by margin traders indicates that leveraged funds are pouring into the national defense and military industry sector in a concentrated manner. This capital behavior may be self-reinforcing - rising prices attract more leveraged funds, which in further drive up stock prices. However, once this positive feedback loop reverses, it may trigger sharp adjustments. The current concentration of margin positions is high, and once market sentiment turns, the risk of a stampede caused by margin calls cannot be ignored.

The divergence between regulatory investigation and stock price rise is worth pondering. Despite the major negative event of the CSRC’s investigation, the stock price still hit a record high, reflecting that the market’s hype around the commercial aerospace concept has exceeded fundamental considerations. This state of “not falling on negative news” may continue for a period of time, but it also means that there may be a risk of “catch-up decline” when the results of the regulatory investigation are announced.

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Risk Type	Risk Level	Specific Description
Regulatory Investigation Risk	🔴 High	Received the CSRC’s “Case Filing Notice” on December 26, 2025, suspected of illegal and irregular information disclosure, may face administrative penalties or investor claims[4]
Valuation Bubble Risk	🔴 High	Short-term gain exceeds 100%, dynamic P/E ratio is at a historical high, PE/PB deviates from the average
Short-term Pullback Risk	🟡 Medium	Obvious acceleration characteristics at high levels, technical indicators show overbought
Margin Stampede Risk	🟡 Medium	High concentration of margin positions, loosening of leveraged funds may trigger a chain reaction
Accounting Quality Risk	🔴 High	Existence of historical accounting errors, credibility of financial data is questionable[4]

: The success of commercial aerospace launch missions may drive a pulse market in the sector. Galactic Energy’s “Ceres-1 Sea Launch Version (Yao-7)” launch is imminent, and a successful launch may trigger short-term speculation[1].

: If the 2025 annual performance forecast exceeds expectations, it may provide fundamental support for the stock price. The continuous volume growth of orders in special fields and the deepening of import substitution provide predictability for performance growth[2][4].

: As a leader in aerospace-grade RF chips, the company is expected to fully benefit from the long-term trends of national defense modernization and commercial aerospace industry development. Technical barriers and first-mover advantages provide it with sustainable competitiveness.

Time Window	Focus Event	Potential Impact
Near Term	Galactic Energy’s Launch Mission	May drive a sector pulse, but need to be vigilant about “good news being priced in”
Mid-to-Late January	Progress of Regulatory Investigation	May trigger short-term sharp fluctuations, require high attention
Early February	2025 Annual Performance Forecast	May support the stock price if exceeding expectations, may trigger adjustments if falling short of expectations

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The strong performance of Zhenlei Technology (688270) today is driven by multiple factors: the overall 4.27% rise of the national defense and military industry sector drove a general rise of constituent stocks[1]; 2026 is regarded as the “Alpha Year of China’s Commercial Aerospace”, and the company’s products have been applied to the China Satellite Network’s direct satellite connection with phone project[3][4]; the 579.92% surge in net profit in the first three quarters provides performance support[2]; margin traders increased positions by 23.28% in the past 10 days, amplifying short-term gains[2].

Technically, the stock price hit a record high, having refreshed records 10 times in the past month, but it has shown obvious characteristics of acceleration at high levels, with short-term pullback risks. Although the fundamentals have technical barriers of aerospace-grade RF chips and the scarcity of import substitution, the CSRC’s investigation (initiated on December 26, 2025), historical accounting errors (2022 revenue recognition issue), and excessive short-term gains (294.29% gain in 2025, over 100% gain in one month) constitute major risks[4].

: It is already at the end of its strong momentum in the short term, technical indicators show overbought, and regulatory risks are unresolved. It is recommended that holders reduce positions on rallies, and onlookers refrain from chasing the rally. The risk-return ratio at the current price is unfavorable, and investors should wait for the results of the regulatory investigation to be announced before re-evaluating.

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[1] Sina Finance - National Defense ETF Rises Over 4.4%, Institutions Bullish on Rocket Electronic Control Segment

[2] Eastmoney - Zhenlei Technology’s Stock Price Hits a New High, Margin Traders Rush to Increase Positions

[3] AAStocks - National Defense ETF Rises Over 2.7%, First Private Aerospace Rocket Launch in 2026

[4] Sina Finance - 3x Bull Stock Suspected of Financial Fraud! 4 Companies Disclose Case Filings on the Same Day

[5] Caifuhao - Zhenlei Technology’s Core Advantages Are RF/Millimeter Wave Chips and SoC Technology

[6] Caifuhao - Semiconductor Industry Integration Boosts Commercial Aerospace Industry Acceleration

[7] Securities Times - Number of Stocks Priced Over RMB 100 in Shanghai, Shenzhen and Beijing Reaches 202