On the evening of May 14th, the leading Chinese semiconductor company and billion-dollar (renminbi, RMB) market cap giant, Source Technology (stock code: 688498), made a sudden announcement. Recently, the company’s vice general manager Chen Wenjun was criminally detained on suspicion of committing a crime.
The announcement stated that the company received notification from Chen Wenjun’s family that he was criminally detained by the public security authorities due to suspicion of criminal offenses and therefore unable to fulfill his duties as the vice general manager. The Board of Directors held a meeting on the 14th and decided to dismiss him from the position of vice general manager while retaining other positions he holds within the company.
Source Technology indicated that as of the date of the announcement, the company had not received any notice from the public security authorities regarding the incident.
It was revealed in the announcement that Chen Wenjun’s term was originally scheduled to expire on January 23, 2027. During his tenure, he was mainly responsible for overseeing the company’s product sales and marketing. Currently, Chen Wenjun holds 308,625 shares of Source Technology. Based on the closing price of Source Technology on May 14th at RMB 1635 per share, the current market value of his shares is approximately RMB 505 million.
Public records show that Chen Wenjun was born in 1981 and holds a master’s degree in Optical Engineering from Huazhong University of Science and Technology. Before joining Source Technology, he served as the vice general manager at Changxin Bochuang and held positions at overseas companies including Fiberxon, RTI HK Limited, and Mellanox Technologies.
Chen Wenjun has been serving as the vice general manager of Source Technology since May 2021.
As of May 14th, Source Technology was trading at RMB 1635 per share, a decrease of 4.27%, with a total market value of RMB 140.5 billion. Source Technology is currently the highest-priced stock on the A-share market and the highest-priced stock on the sci-tech innovation board. Over the past year, its stock price has surged more than 11 times, with an increase of about 1.5 times since the beginning of this year.
Source Technology was established on January 28, 2013, focusing on the high-speed development, design, and production of semiconductor chips, with products covering from 2.5G to 50G Indium Phosphide (InP) laser chip. It went public at the end of 2022 and within over three years, transformed from a company with a market value of RMB 7 billion to a giant with a market value exceeding a trillion RMB. On April 17th, Source Technology’s stock price surpassed Guizhou Maotai to become the highest-priced stock on the A-share market.
Source Technology’s rise to “Stock King” is attributed to the concept of Co-Packaged Optics (CPO). With the continuous expansion of the global information and communication scale and the rise of technologies such as artificial intelligence, optoelectronic information technology is being further widely applied. Source Technology stated that under this trend, the downstream applications of optical chips are continuously expanding, leading to an increasing demand.
The news of Chen Wenjun’s criminal detention immediately became a hot topic on Weibo.
Many investors commented: “The billion-dollar semiconductor ‘Stock King’ unexpectedly hit a snag late at night! A high-priced A-share stock and a core target in AI optical chips, how will fundings look tomorrow? Is it just a stock incident or will it affect the sector sentiment?”
“The collapse of the major bull stock in the optical module sector at this juncture could impact the morale of the sector.”
“High-priced stocks are the most afraid of such unexpected black swan events!”
“What’s going on! Tonight, there’s a string of bad news for high-priced trending stocks, which will shake the high-priced trending stocks in the next moves!”
“The core target in optical module Source Technology faces sudden negative news, with the vice general manager being detained due to personal issues. The sudden risk event involving a high-level executive may impact the market sentiment in the short term, combined with recent fluctuations in the optical module sector, caution is needed to address individual stock funding hedging sentiment.”
“It’s really unpredictable in the A-share market. We think there will be negative news when stocks rise too much, but we never thought it would be this kind of negative news. The bosses of major U.S. bull stocks have even visited China, yet the executives of these major A-share bull stocks keep getting criminally detained!”
*Please note that this translation is a rewritten version of the original article.