Investment Rating - The report maintains an "Overweight" rating for the communication sector and its sub-sectors, including telecommunications operators and data centers [9]. Core Insights - The communication sector's fund holdings decreased to 2.32% in Q1 2025, down 1.06 percentage points from the previous quarter, indicating a shift from overweight to underweight status [2][3]. - The report highlights a positive outlook for telecommunications operators, AI computing chains, and new productivity sectors such as commercial aerospace, low-altitude economy, and deep-sea technology [2][3]. - The TTM P/E ratio for the communication sector as of April 25, 2025, is 29.33x, which is at the 5.90% historical percentile since early 2011 [3][14]. Summary by Sections Market Overview - The communication index rose by 1.32% last week, outperforming the Shanghai Composite Index (0.56%) and the Shenzhen Component Index (1.38%) [2][13]. - Public funds have increased their holdings in data centers, operators, and offshore wind sectors while reducing positions in optical modules and wireless devices [3][14]. Key Companies and Dynamics - Recommended companies include ZTE Corporation, Zhongji Xuchuang, Xinyi Technology, Tianfu Communication, Taicheng Light, and WanGuo Data for AI computing chains [4]. - Core asset value reassessment is suggested for China Mobile, China Telecom, and China Unicom, while Les Information is highlighted for new productivity sectors [4]. Fund Holdings and Changes - The top five companies in terms of fund holdings in Q1 2025 are Xinyi Technology, Zhongji Xuchuang, China Mobile, ZTE Corporation, and China Telecom, with total market values of 120.33 billion, 103.64 billion, 73.51 billion, 49.16 billion, and 36.46 billion respectively [25][26]. - The report notes significant increases in holdings for companies like Aofei Data and Runze Technology, with respective increases of 11.89 billion and 10.94 billion in market value [24]. Sector Trends - The report emphasizes the ongoing development of 5G technology and its applications, including the successful demonstration of 5G NR broadcasting in Hainan [28]. - The establishment of high-speed data centers, such as the China Mobile Yangtze River Delta data center, is noted as a significant investment in infrastructure [35].

Investment Rating - Industry Rating: Recommended [4] Core Viewpoints - The optical module industry is experiencing rapid growth, driven by accelerated computing power investments from domestic cloud vendors, with the market evolving towards 800G/1.6T standards. The demand for optical modules is surging as they are fundamental components in the expansion of computing power infrastructure [1][6][9] - The latest round of computing power demand surge is catalyzed by upgrades in computing chips, with significant growth in demand over the past two years. The short-term supply shortage and competition among major models are intensifying the supply-demand imbalance. However, the AI application landscape is still in its early stages, indicating substantial growth potential for the optical module industry in the long term [2][16] - The global computing power scale is projected to grow at a rate of 50% over the next five years, with the total computing power expected to exceed 16ZFlops by 2030, where intelligent computing will account for over 90% [6][12] Summary by Sections Optical Module Performance - The optical module market is projected to reach $6.25 billion in 2023, with an expected CAGR of 27% from 2024 to 2029, potentially reaching $25.8 billion by 2029. The Ethernet optical module market is anticipated to grow at a CAGR of 26% to $22.2 billion [6][10] - Major optical module companies are showing significant revenue and net profit growth, with companies like Zhongji Xuchuang and Xinyi Sheng reporting revenue growth rates of 122.6% and 179.1% respectively for 2024 [10][12] Investment Recommendations - The report suggests that the optical module industry has strong performance support and long-term growth logic, with current market valuations having entered a low range, indicating potential for recovery. Beneficiary stocks include Guangxun Technology, Huagong Technology, Xinyi Sheng, Zhongji Xuchuang, and Tianfu Communication [2][16] - The report emphasizes the importance of domestic cloud vendors' capital expenditures, which are expected to significantly increase the demand for optical modules, with a projected over 100% growth in procurement by 2025 [12][16]

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company is expected to benefit from the expansion of demand and technological development for both passive and active products. The demand trends for 2025 include the significant release of 800G demand driven by cloud providers, the continued advantage of Nvidia in hardware and software systems, and the penetration of silicon photonic modules [3] - The company is well-positioned as a quality supplier of core components in the optical module upstream, deeply bound with major downstream manufacturers, and is expected to benefit from the volume growth of 800G and 1.6T products, as well as the long-term penetration trend of CPO [3] Financial Performance Summary - In 2024, the company achieved a total revenue of 3.25 billion yuan, a year-on-year increase of 67.7%, and a net profit attributable to shareholders of 1.34 billion yuan, up 84.1% year-on-year [8] - The company’s revenue and net profit for Q4 2024 were 860 million yuan and 370 million yuan, respectively, showing a year-on-year increase of 17.0% and 26.2% [8] - The company’s revenue for Q1 2025 was 940 million yuan, a year-on-year increase of 29.1%, with a net profit of 340 million yuan, up 21.1% year-on-year [8] Revenue and Profit Forecast - The company’s total revenue is projected to reach 5.03 billion yuan in 2025, with a year-on-year growth of 54.7%, and a net profit of 2.04 billion yuan, reflecting a growth of 51.6% [1][9] - The earnings per share (EPS) are expected to be 3.68 yuan in 2025, with a price-to-earnings (P/E) ratio of 19.1 based on the closing price on April 25, 2025 [1][9] Market Data - The closing price of the company is 70.24 yuan, with a market capitalization of approximately 38.91 billion yuan [6] - The company has a price-to-book (P/B) ratio of 8.97 and a net asset value per share of 7.83 yuan [6][7] Research and Development - The company has increased its R&D investment by 62.1% to 230 million yuan in 2024, focusing on core technologies in silicon photonics and CPO [8]

Industry Overview - The Chinese optical communication system industry is experiencing market scale expansion, accelerated technological iteration, diversified competitive landscape, and strengthened policy support, showing steady overall development [1][13] - The market size of the optical communication system industry in China is projected to reach 215.4 billion yuan in 2024, with a year-on-year growth of 1.07% [1][13] - Technological advancements are moving towards ultra-high speed, large capacity, and low latency, with 400G optical networks already in commercial use and 800G/1.6T optical modules gradually being deployed [1][13] Technological Developments - Innovations such as silicon photonics and co-packaged optics (CPO) are driving power consumption reductions of over 50% [1][13] - The integration of quantum communication with optical communication provides new pathways for secure information transmission, while integrated optical technologies enhance device intelligence [1][13] Policy and Market Drivers - National policies such as "Broadband China" and "Three Networks Integration" are significantly promoting industry growth [1][13] - Emerging applications in computing networks and smart cities are expanding the boundaries of application, with AI model training driving the demand for upgraded computing infrastructure, further boosting the optical communication system market [1][13] Industry Development History - The optical communication system industry in China has undergone four main stages: early exploration (1970s), technological breakthroughs (1980s), rapid development and industrialization (1990s), and technological upgrades and globalization (2000s to present) [6][7] Industry Chain - The upstream of the optical communication system industry includes core components and basic materials, while the midstream involves R&D and production, and the downstream applications span telecommunications, data communications, consumer electronics, and more [9] Key Companies - Major players in the optical communication system industry include Huawei, ZTE, and FiberHome, which dominate the core markets of optical transmission and access equipment [15] - Companies like Zhongji Xuchuang and Xinyi Technology are gaining traction in the optical module and device segments through technological innovation and differentiated products [15] Market Trends - Technological innovation is the core driving force for the development of the optical communication system industry, with a focus on high speed, high integration, and low power consumption [21] - New application scenarios are expanding, including IoT and smart city initiatives, which will further increase the demand for optical communication devices [22][23] - International competition is intensifying, with Chinese optical communication companies needing to enhance their competitiveness in the global market [24]

Group 1 - A total of 36 companies were investigated by institutions on April 24, with 26 companies specifically targeted by funds [1] - Among the companies, Zhongchong Co., Ltd. attracted the most attention, with 44 funds participating in the investigation [1] - The companies investigated span 13 industries, with the pharmaceutical and biological sector having the highest representation, featuring 5 companies [1] Group 2 - In the past five days, 18 of the investigated stocks have risen, with the highest increases seen in Erkang Pharmaceutical (31.65%), Kailaiying (19.20%), and Zhongchong Co., Ltd. (14.19%) [1][2] - 12 stocks experienced net inflows of funds, with Kailaiying receiving the most significant net inflow of 254 million yuan [2] - Among the companies that have reported Q1 earnings, Erkang Pharmaceutical and Jingce Electronics showed the highest net profit growth rates of 868.91% and 336.06%, respectively [2]

Summary of Tianfu Communication Conference Call Company Overview - **Company**: Tianfu Communication - **Industry**: Optical Communication Key Financial Performance - **2024 Q4 Revenue**: 857 million CNY, a quarter-on-quarter increase of 2.18% [2] - **2024 Q4 Net Profit**: 367 million CNY, a quarter-on-quarter increase of 14% [2] - **2024 Annual Revenue**: 3.252 billion CNY, a year-on-year increase of 67.7% [3] - **2024 Annual Net Profit**: 344 million CNY, a year-on-year increase of 84% [3] - **2025 Q1 Revenue**: 945 million CNY, a year-on-year increase of 29% [2][5] - **2025 Q1 Net Profit**: 30.38 million CNY, a year-on-year increase of 21% [2][5] - **Gross Margin**: 53% in Q1 2025, slightly down due to USD depreciation and lower capacity utilization during the Spring Festival [2][6] - **R&D Expenses**: 232 million CNY in 2024, a year-on-year increase of 62% [2][3] Operational Insights - **Production Management**: Optimization of ERP and MES systems to enhance sales forecasting and production planning accuracy [2][3] - **Inventory Turnover**: Inventory turnover rate of 4.6 times, accounts receivable turnover rate of 5.4 times, both improved year-on-year [3] - **Debt Ratios**: Debt-to-asset ratio of 15.85%, current ratio of 4.85, indicating strong solvency [3] Product Development and Market Trends - **800G and 1.6T Products**: 800G product growth was stable in 2024, while 1.6T products are expected to ramp up in 2025, with orders beginning to increase [2][8] - **Market Demand**: Demand for 1.6T products is expected to follow customer pace, with overall industry demand needing further evaluation based on tariff situations [15] - **Silicon Photonics Technology**: Anticipated significant increase in the application of silicon photonics technology by 2027, with the company actively participating in the CPU supply chain [4][25] Capacity Expansion and Challenges - **Capacity Expansion**: Plans to expand capacity overseas to mitigate potential tariff risks, with a focus on Thailand [4][12] - **Production Challenges**: Difficulties in expanding optical device categories in Thailand compared to module packaging lines, requiring 6 to 12 months to achieve domestic production levels [4][13] - **Component Shortages**: Previous capacity and personnel issues led to shortages in certain components, with ongoing supply challenges in specific product categories [10][11] Strategic Outlook - **Engine Business**: Progress in the engine business is slow, with a focus on high-speed products rather than transitioning production overseas [18] - **Future Workforce Expansion**: Plans to expand workforce in Thailand based on order conditions, currently employing over 100 people [24] - **Profitability Insights**: High profit margins in active components do not necessarily reflect overall industry health, as companies are working to reduce costs [24] Conclusion - **Overall Performance**: Tianfu Communication shows strong financial growth and operational improvements, with a strategic focus on expanding capacity and leveraging new technologies in the optical communication sector. The company is navigating challenges related to market demand, production capacity, and component shortages while positioning itself for future growth in high-speed optical products.

Financial Performance - In 2024, the company achieved operating revenue of CNY 3.252 billion, a year-on-year increase of 67.74% [4] - The net profit attributable to shareholders reached CNY 1.344 billion, up 84.07% compared to the previous year [4] - In Q1 2025, the company reported operating revenue of CNY 0.945 billion, a year-on-year growth of 29.11% [5] - The net profit attributable to shareholders for Q1 2025 was CNY 0.338 billion, reflecting a year-on-year increase of 21.07% [5] Market Drivers - The growth in revenue and profit is primarily driven by the accelerated development of the artificial intelligence industry and the ongoing demand for high-speed optical devices due to global data center construction [5] - Continuous investment in R&D and improvements in automation and cost reduction have also contributed to revenue growth [5] Operational Updates - The first phase of the Thailand factory was successfully delivered and is operational, with the second phase on track for completion by the end of the month [6] - The company is enhancing production efficiency through detailed training plans and monitoring [6] Inventory and Cost Management - The increase in inventory levels in Q1 2025 is attributed to higher raw material reserves to meet potential production demands [9] - Fluctuations in gross margin are influenced by lower capacity utilization during the Spring Festival and rising material costs for active products [7] Tax and Financial Management - The increase in income tax expenses is a normal accounting treatment based on applicable tax rates and current profit levels [9] - The company maintains a high level of cash and equivalents, with plans for shareholder returns and investments in the Thailand factory and equipment upgrades [9] Shareholder Returns - Since 2015, the company has consistently distributed cash dividends exceeding 40% of the net profit attributable to shareholders, totaling CNY 1.506 billion [10]

Investment Rating - The investment rating for the company is "Buy" [7] Core Views - The company's performance in 2024 met expectations, with revenue of 3.252 billion yuan, a year-on-year increase of 67.7%, and a net profit of 1.344 billion yuan, up 84.1% year-on-year. The first quarter of 2025 showed a revenue of 0.945 billion yuan, a year-on-year increase of 29.11% [1][2] - The demand for optical engines driven by AI is rapidly increasing, leading to significant growth in the global data center and computing network expansion. The market for optical modules related to AI is expected to grow at a compound annual growth rate of over 20% from 2024 to 2030 [3] - The company is focusing on high-end customer needs, with ongoing R&D projects in 1.6T, silicon photonics, and CPO technologies, while optimizing production processes to reduce costs [4] - The company is projected to achieve net profits of 2.068 billion yuan, 2.922 billion yuan, and 4.016 billion yuan for 2025, 2026, and 2027 respectively, with a PE ratio of 25 for 2025 [5] Summary by Sections Financial Performance - In 2024, the company reported a revenue of 3.252 billion yuan and a net profit of 1.344 billion yuan, with a gross margin of 57.22% and a net margin of 41.3% [1][2] - For the first quarter of 2025, revenue was 0.945 billion yuan, with a net profit of 0.338 billion yuan, reflecting a slight decline due to seasonal factors [2] Market Outlook - The company is well-positioned to benefit from the growing demand for high-speed optical modules, particularly with the upcoming release of 1.6T products [3][4] - The global expansion of data centers and computing networks is expected to drive significant growth in the optical module market [3] Profit Forecast and Valuation - The company is expected to maintain strong profit growth, with projected net profits increasing significantly over the next few years, indicating a robust growth trajectory [5]

关于更换持续督导保荐代表人的公告 本公司及董事会全体成员保证信息披露内容的真实、准确和完整，没有虚 假记载、误导性陈述或重大遗漏。 苏州天孚光通信股份有限公司（以下简称"公司"）于 2025 年 4 月 23 日收 到公司 2020 年向特定对象发行股票的保荐机构华泰联合证券有限责任公司（以 下简称"华泰联合证券"）出具的《关于更换苏州天孚光通信股份有限公司 2020 年向特定对象发行股票持续督导保荐代表人的函》，华泰联合证券原委派钱亚明 先生和涂清澄先生为公司持续督导工作的保荐代表人，因涂清澄先生工作变动调 离华泰联合证券，不能继续担任持续督导期的保荐工作，为保证持续督导工作的 有序进行，华泰联合证券委派沈树亮先生接替涂清澄先生履行公司 2020 年向特 定对象发行股票的持续督导职责。 本次保荐代表人更换后，公司 2020 年向特定对象发行股票的持续督导保荐 代表人为钱亚明先生和沈树亮先生，持续督导期至中国证券监督管理委员会和深 圳证券交易所规定的持续督导义务结束为止。 公司董事会对涂清澄先生在公司持续督导期间所做的工作表示衷心感谢！ 特此公告。 证券代码：300394 证券简称：天孚通信 公告编号：202 ...

Investment Rating - The investment rating for the company is "Buy" and is maintained [7] Core Views - The company's performance in 2024 met expectations, with revenue of 3.252 billion yuan, a year-on-year increase of 67.7%, and a net profit of 1.344 billion yuan, up 84.1% year-on-year, exceeding the forecast median [1] - In Q1 2025, the company reported revenue of 0.945 billion yuan, a year-on-year increase of 29.11%, and a net profit of 0.338 billion yuan, up 21.07% year-on-year, although there was a slight quarter-on-quarter decline due to factors such as the Spring Festival holiday [2] - The demand for optical engines driven by AI is rapidly increasing, with a projected compound annual growth rate of over 20% for the optical module market from 2024 to 2030 [3] - The company is focusing on high-end customer needs, with ongoing R&D projects in 1.6T, silicon photonics, and CPO technologies, while optimizing production processes to reduce costs [4] - The company is expected to achieve net profits of 2.068 billion yuan, 2.922 billion yuan, and 4.016 billion yuan for 2025, 2026, and 2027 respectively, with a corresponding PE ratio of 25 for 2025 [5] Financial Summary - In 2024, the company is projected to have a revenue of 3.524 billion yuan, with a year-on-year growth of 68%, and a net profit of 1.344 billion yuan, reflecting an 84% increase [6] - The projected earnings per share for 2025 is 2.90 yuan, with a PE ratio of 25.03 [6]