Shares of PATEO (02889) experienced significant gains in the final trading session.

The stock rose more than 6% late in the day, and at the time of reporting, it was up 3.66% to HK$184, with a trading volume of HK$71.75 million.

The movement follows news of a strategic agreement.

On June 17, the company formally entered into a cooperation agreement with the new research-oriented Fujian Fuyao University of Science and Technology.

The collaboration will focus on deep research and development in critical material areas, including core materials for electro-optic modulators, silicon photonics integration, and fourth-generation semiconductors.

The partnership aims to commercialize the resulting technological developments.

This move strategically positions the company at the intersection of the high-growth fields of AI computing power and optical communications.

The objective is to create a complete, closed-loop ecosystem spanning from foundational materials to chips and their eventual commercial applications.

This latest initiative follows closely on the company's recent move, in conjunction with Ping An Capital, to plan the acquisition of an optical chip company.

The agreement with the university represents a swift step towards technological integration and securing key upstream resources.

Unlike focusing solely on device manufacturing, this cooperation targets the very foundation of the optical communications industry: core materials.

Under the terms of the agreement, the company will provide research funding to the university.

This funding will specifically support technological breakthroughs within the university's New Materials and New Energy School across three key areas: core materials for electro-optic modulators, silicon photonics integration technology, and fourth-generation semiconductors.

The company stated that this partnership with the university represents another crucial step in enhancing its photonics industry ecosystem, building upon the planned acquisition of the optical chip company.