The leading global high-speed optical module company in the AI era, with significant growth in performance, maintaining the “buy” rating. On July 15, 2024, the company released its 2024 semi-annual performance forecast. 2024H1 is expected to achieve net profit of 8.1 to 0.95 billion yuan, an increase of 180.89% to 229.44% year on year, and a median value of 0.88 billion yuan, up 205.17% year on year, achieving net profit without return of 0.8096-0.9496 billion yuan, a year-on-year increase of 0.8096-0.9496 billion yuan. 185.11% - 234.41%, median value of 0.8796 billion yuan, an increase of 209.76%; according to our estimates, 2024Q2 expects to achieve net profit of 0.485-0.625 billion yuan, a median value of 0.555 billion yuan, a year-on-year increase of 206.63%, and an increase of 70.77% month-on-month. It is expected to achieve net profit after deducting non-attributable net profit of 0.4846-0.6246 billion yuan, with a median value of 0.555 billion yuan, YoY The increase was 211.57%, 70.65% month-on-month, mainly due to the continuous increase in industry sentiment and the rapid growth in demand for high-speed products. We maintain our estimated net profit to mother of 1.542, 2.34, and 3.288 billion yuan respectively in 2024-2026. The current stock price corresponds to PE of 51.7/34.1/24.2 times, maintaining a “buy” rating.

The company is deeply involved in optical module circuits and has a rich product matrix

In 2023, the company has developed nearly 3,000 kinds of different models, high-quality, and high-reliability optical module products. The products cover various standard technical indicators such as communication network interfaces, transmission rates, wavelengths, etc., and the application areas cover data centers, data communication, 5G wireless networks, telecom transmission, fixed grid access, smart grids, security monitoring and other fields. In the data center field, the company's products include 100G, 200G, 400G, and 800G high-speed optical modules used in the data center market; in the telecommunications sector, the products cover 25G, 50G, 100G, and 200G series optical module products for 5G fronthaul, midtransmission, and backhaul.

The company has excellent R&D strength and strong comprehensive strength

In terms of R&D capabilities: In 2023, the company achieved batch delivery of 800G high-speed optical modules, and successfully launched 800G and 400G optical module products based on silicon light solutions, 400G ZR/ZR+ coherent optical module products, and 800G optical module products based on LPO solutions, covering multiple customers. It has launched the latest 1.6T optical module and sent samples to customers for testing. In terms of production capacity construction: In 2023, the first phase of the company's factory in Thailand was officially put into operation, and the second phase of the Thai factory is being accelerated. It is expected to be completed and put into operation within 2024. We are optimistic about the company's growth opportunities in the era of high-speed optical communication.

Risk warning: Optical module development falls short of expectations, supply chain stability risks, trade barriers