Group 1 - The CPO concept experienced a sharp decline, with companies like New Yisheng dropping over 5% and Zhongji Xuchuang falling nearly 4% [1] - Other companies such as Dekeli and Tianfu Communication also saw collective declines in their stock prices [1]

Core Viewpoint - The company, Dekoli, has shown mixed financial performance with a slight increase in revenue but a significant decrease in net profit, indicating potential challenges ahead in maintaining profitability [2]. Financing and Trading Activity - On October 13, Dekoli's stock price increased by 0.25%, with a trading volume of 1.009 billion yuan. The financing buy-in amount was 59.1267 million yuan, while the financing repayment was 99.6930 million yuan, resulting in a net financing outflow of 40.5662 million yuan [1]. - As of October 13, the total financing and securities lending balance for Dekoli was 803 million yuan, which represents 4.85% of its market capitalization and is above the 90th percentile of the past year [1]. - There were no securities lent or sold on October 13, with the securities lending balance also at zero, indicating a high level of inactivity in this area [1]. Business Overview - Dekoli, established on January 31, 2000, and listed on August 9, 2022, specializes in the research, production, and sales of optical transceiver modules, optical amplifiers, and optical transmission subsystems. Its products are primarily used in key national development areas such as communication trunk transmission and 5G networks [1]. - The revenue composition of Dekoli is as follows: transmission-related products account for 75.33%, access and data-related products for 23.54%, and other products for 1.13% [1]. Shareholder and Institutional Holdings - As of June 30, 2025, Dekoli had 9,508 shareholders, a decrease of 10.52% from the previous period. The average number of circulating shares per shareholder increased by 47.14% to 9,395 shares [2]. - For the first half of 2025, Dekoli reported a revenue of 433 million yuan, a year-on-year increase of 5.93%, while the net profit attributable to shareholders was 28.0937 million yuan, reflecting a year-on-year decrease of 48.17% [2]. - The total cash dividends distributed by Dekoli since its A-share listing amount to 142 million yuan [3]. - Among the top ten circulating shareholders as of June 30, 2025, several new institutional investors have entered, including Invesco Great Wall Quality Evergreen Mixed Fund and others, indicating a shift in shareholder composition [3].

Core Insights - On October 10, Dekoli's stock fell by 10.31%, with a trading volume of 1.381 billion yuan [1] - The company recorded a net financing purchase of 5.597 million yuan on the same day, with a total financing balance of 844 million yuan, accounting for 5.11% of its market capitalization [1] - As of June 30, 2025, Dekoli's revenue was 433 million yuan, a year-on-year increase of 5.93%, while net profit decreased by 48.17% to 28.0937 million yuan [2] Financing and Trading Activity - On October 10, Dekoli had a financing buy of 161 million yuan and a financing repayment of 156 million yuan, resulting in a net financing purchase of 5.597 million yuan [1] - The total financing and securities lending balance reached 844 million yuan, which is above the 90th percentile of the past year [1] - No shares were sold or repaid in the securities lending segment on October 10, indicating a lack of short-selling activity [1] Company Overview - Dekoli, established on January 31, 2000, and listed on August 9, 2022, specializes in the research, production, and sales of optical transceiver modules, optical amplifiers, and optical transmission subsystems [1] - The company's main business revenue composition includes 75.33% from transmission, 23.54% from access and data, and 1.13% from other sources [1] Shareholder and Institutional Holdings - As of June 30, 2025, Dekoli had 9,508 shareholders, a decrease of 10.52% from the previous period, with an average of 9,395 circulating shares per shareholder, an increase of 47.14% [2] - The top circulating shareholder is Invesco Great Wall Quality Evergreen Mixed A, holding 3.0115 million shares, marking a new entry [3] - Other notable institutional shareholders include CICC Value Momentum Mixed A and E Fund Vision Growth Mixed A, with significant increases in their holdings [3]

Investment Rating - The report suggests to continue focusing on investment opportunities within the communication industry [2] Core Insights - The communication industry showed steady revenue growth and accelerated profitability in H1 2025, with total revenue reaching 1785.003 billion yuan, a year-on-year increase of 10.07%, and net profit attributable to shareholders at 160.432 billion yuan, up 11.26% year-on-year [4][7] - The AI computing industry chain is expected to continue accelerating its development in 2025, benefiting the communication industry [17][19] Summary by Sections H1 2025 Performance Overview - The communication industry achieved a total revenue of 1785.003 billion yuan in H1 2025, with a year-on-year growth of 10.07%, and a net profit of 160.432 billion yuan, reflecting an 11.26% increase [4][7] Segment Performance Changes - In H1 2025, the optical module and device segment reported revenue of 47.988 billion yuan, a year-on-year increase of 64.88%, and net profit of 10.876 billion yuan, up 111.99% [25] - The communication PCB segment achieved revenue of 57.249 billion yuan, a year-on-year increase of 37.66%, and net profit of 8.058 billion yuan, up 80.79% [31] - The network equipment segment generated revenue of 507.111 billion yuan, a year-on-year increase of 28.86%, with net profit of 19.184 billion yuan, up 19.57% [37] AI Industry Chain Investment - Major overseas cloud companies are expected to maintain optimistic growth in capital expenditures, with a total of 95 billion USD in Q2 2025, reflecting an 82.96% year-on-year increase [17] - Companies like Oracle and Nvidia are showing strong growth prospects in their AI-related businesses, with Oracle's unfulfilled revenue reaching 455 billion USD, a year-on-year increase of 359% [22][19]

Core Viewpoint - The company is progressing with its capacity expansion plan in Thailand, which is attracting significant market attention due to its potential to serve major global AI enterprises [1] Group 1: Capacity Expansion - The construction of the Thai facility is advancing as planned, with civil works completed and the site currently undergoing renovations [1] - The facility is expected to gradually start operations and release capacity after the Chinese New Year in 2026 [1] Group 2: Client Engagement - The company has already certified two to three clients, with new clients currently undergoing the certification process [1] - There are indications that the company is in commercial negotiations regarding future capacity allocation with large internet or computing service providers [1]

Core Viewpoint - The company is progressing with its production capacity in Thailand, with several customers completing certification and new customers undergoing the certification process [2] Group 1: Production Capacity and Certification - The construction of the Thai facility is proceeding as planned, with two to three customers having completed the certification process [2] - New customers are currently in the process of certification [2] - The Thai facility has completed civil construction and is currently undergoing renovations, with production expected to gradually commence after the Chinese New Year in 2026 [2] Group 2: Cost Savings and Competitive Advantage - The company is exploring how exporting from Thailand could save on actual tariff costs, although specific percentage savings were not disclosed [2] - The potential cost advantages for bidding on North American projects due to the Thai production capacity are being evaluated [2]

Core Viewpoint - The company is addressing concerns regarding its production capacity in Thailand and its impact on financial performance in 2025, indicating that production is on track and expected to ramp up in the future [1] Group 1: Production Capacity - The Thai production facility is progressing as planned, with two to three customers having completed certification and new customers undergoing the certification process [1] - The construction of the Thai facility has been completed, and it is currently undergoing renovations, with production expected to gradually commence after the Chinese New Year in 2026 [1] Group 2: Financial Performance Expectations - The company anticipates a significant increase in net profit for the third and fourth quarters of 2025 as production capacity is unlocked [1] - There is an expectation for the company to turn its annual net profit from negative to positive as production ramps up [1]

Market Overview - On October 10, the communication equipment sector declined by 2.36%, with Dekoli leading the drop [1] - The Shanghai Composite Index closed at 3897.03, down 0.94%, while the Shenzhen Component Index closed at 13355.42, down 2.7% [1] Stock Performance - Notable gainers in the communication equipment sector included: - Yongding Co., Ltd. (600105) with a closing price of 14.81, up 5.94% [1] - Dingxin Communication (603421) at 8.43, up 4.85% [1] - ZTE Corporation (000063) at 52.00, up 4.04% [1] - Major decliners included: - Dekoli (688205) at 104.38, down 10.31% [2] - GuoDun Quantum (688027) at 360.01, down 9.72% [2] - Guangku Technology (300620) at 107.35, down 7.74% [2] Capital Flow - The communication equipment sector experienced a net outflow of 6.549 billion yuan from institutional investors, while retail investors saw a net inflow of 5.292 billion yuan [2][3] - The capital flow for key stocks showed mixed results, with ZTE Corporation experiencing a net inflow of 12.2 million yuan from institutional investors [3]

Core Viewpoint - The company is progressing with its capacity expansion in Thailand, with several customers already certified and new customers undergoing certification. The Thai facility's construction is on track, with completion expected after the Chinese New Year in 2026, when capacity will gradually be released [1]. Group 1: Capacity Expansion - The Thai facility has completed civil construction and is currently undergoing renovations, with plans to start operations post-2026 Chinese New Year [1]. - Several customers have completed certification, indicating readiness to engage with the new capacity [1]. Group 2: Market Engagement - The company's large-scale capacity expansion aims to secure orders from leading global AI enterprises for computing power clusters [3]. - There are ongoing discussions regarding future capacity allocation with major internet or computing service providers [3].

Investment Rating - The investment rating for the company is "Buy" (maintained) [6] Core Views - The company reported a decline in net profit in H1 2025 primarily due to a slowdown in demand in the traditional telecommunications transmission market, which compressed profit margins in its telecom transmission business [4][12] - The DCI product line is entering a critical capacity enhancement phase, with significant growth in customer orders and market share [4][13] - The company is making progress in the R&D of OCS and hollow core fiber amplifiers, enhancing its core competitiveness in the computing power infrastructure sector [4][14] Summary by Sections Financial Performance - In H1 2025, the company achieved operating revenue of 433.55 million yuan, a year-on-year increase of 5.93%. However, the net profit attributable to shareholders decreased by 48.17% to 28.09 million yuan [12] - The net profit after excluding non-recurring gains and losses was 19.11 million yuan, also down 48.23% year-on-year [12] Product Development - The DCI product line has seen significant advancements, with small batch trials of the 400G coherent module and mass deliveries of 400G/600G DCI boards. The company plans to deliver small batches of 800G boards within the year and has initiated research on 1.6T boards [4][13] - The company has received overseas sample orders for its silicon-based OCS and is accelerating the development of the second-generation high-dimensional OCS, targeting prototype completion by H1 2026 [4][14] Future Projections - The company expects revenues of 1.313 billion yuan in 2025, 1.960 billion yuan in 2026, and 2.758 billion yuan in 2027, with year-on-year growth rates of 56.03%, 49.35%, and 40.70% respectively [15] - Net profit attributable to shareholders is projected to be 169 million yuan in 2025, 269 million yuan in 2026, and 423 million yuan in 2027, with growth rates of 68.06%, 59.57%, and 56.91% respectively [15]