ZHONGJI INNOLIGHT(SZ:300308) Hua Er Jie Jian Wen·2025-11-20 14:11Core Viewpoint - Goldman Sachs expresses strong confidence in the growth prospects of Zhongji Xuchuang, raising the target price by 62% to RMB 762 and maintaining a "Buy" rating based on the company's robust growth potential in the 800G/1.6T optical module and silicon photonics technology sectors [1] Group 1: Financial Projections - Goldman Sachs forecasts a compound annual growth rate (CAGR) of 59% for Zhongji Xuchuang's net profit from 2025 to 2028, with 800G optical module revenue expected to surge by 104% year-on-year in 2026 and 1.6T optical module revenue projected to skyrocket by 110% in 2027, supporting an overall revenue CAGR of 52% during the same period [3] - The net profit estimates for 2026 and 2027 have been raised by 23% and 28%, reaching RMB 21.645 billion and RMB 29.944 billion, respectively, driven by higher revenue and gross margin expectations [3] - Operating profit margin is anticipated to increase from 25% in 2024 to 39% in 2028, reflecting sustained growth supported by long-term demand trends in AI networks [3] Group 2: Market Dynamics - The diversification of ASIC chips is reshaping the demand landscape for optical modules, with ASIC chips expected to account for 38%, 40%, and 45% of the AI chip market from 2025 to 2027 [4] - The architectural differences between GPU and ASIC servers lead to a significant increase in the dependency on multiple chips, servers, and rack connections, thereby driving stronger demand for high-speed connections [5] Group 3: Technology and Product Upgrades - The transition from 400G to 800G is becoming a major driver for the optical module upgrade cycle, with expectations for continued trends in the coming years, including the deployment of 1.6T optical modules starting in the second half of 2025 [6] - As optical modules upgrade to higher speeds, market competition is expected to decrease due to higher technical barriers in design, testing, and production efficiency, benefiting technologically advanced companies [6] - Revenue contribution from 800G and 1.6T products is projected to increase significantly, from 64% and 8% in 2025 to 71% and 16% in 2026, respectively, making this product structure upgrade a core engine for revenue growth [6] Group 4: Margin Expansion - Gross margin is expected to rise from 41.6% in 2025 to 46.4% in 2027, primarily due to faster speed migration and the transition from EML to silicon photonics technology [7] - Silicon photonics technology offers better gross margin performance compared to EML, with reduced component costs and improved production efficiency [7] Group 5: Valuation Adjustments - Goldman Sachs has significantly raised its revenue forecasts for 2026 and 2027 by 24% and 35%, respectively, reflecting accelerated growth in mainstream products [8] - The target price has been adjusted from RMB 470 to RMB 762, applying a target price-to-earnings ratio of 31 times, consistent with recent trading averages [8]