ZHONGJI INNOLIGHT(300308) 华创证券·2024-07-22 04:31Investment Rating - Strong Buy (First Coverage) with a current price of 140.00 RMB [1] Core Views - The company is a global leader in data center optical modules, benefiting from the accelerated iteration of optical interconnects driven by AI demand [1] - The company has a leading market share in the global optical module market, surpassing Coherent in 2023 to become the top supplier [1] - The company is well-positioned to capitalize on the AI computing infrastructure wave with its early release of 800G/1.6T high-speed data communication products [1] - The company has a strong technological edge with sufficient reserves in emerging technologies such as silicon photonics, LPO, and CPO, which will solidify its long-term development advantages [1] Company Overview - The company specializes in the R&D, design, packaging, testing, and sales of high-speed optical communication modules, providing solutions for cloud data centers and telecom equipment manufacturers [1] - Its product portfolio includes 100G, 200G, 400G, and 800G high-speed optical modules, as well as 5G front-haul, mid-haul, and back-haul optical modules [1] - The company has a global presence with production bases in Suzhou, Tongling, Chengdu, Thailand, and Taiwan, enabling large-scale delivery of high-end optical modules [1] AI-Driven Demand for High-Speed Optical Modules - The company is a pioneer in the industry, having released 800G products as early as 2020 and 1.6T products in 2023, maintaining a leading position in the market [1][47] - The company's 800G products have been mass-produced since 2023, with 1.6T products expected to ramp up in 2024-2025 [47] - The company's early adoption of silicon photonics technology and its collaboration with Tower Semiconductor for advanced silicon photonics platforms further strengthen its competitive edge [51] Emerging Technologies - The company has significant reserves in silicon photonics, LPO, and CPO technologies, which are expected to drive future growth [1] - Silicon photonics is expected to reach an inflection point in the 800G era, with the company having already commercialized 800G silicon photonics solutions [36] - LPO technology, which reduces power consumption and latency, is expected to see significant demand, with the company already showcasing 1.6T-LPO-DR8 OSFP modules [52] - CPO technology, which integrates optical components at the chip level, is expected to commercialize by 2024-2025 and scale up by 2026-2027, with the company actively researching related core technologies [54] Financial Performance and Projections - The company's revenue and net profit have shown rapid growth, with 2023 revenue reaching 10.718 billion RMB, a YoY increase of 11.2%, and net profit reaching 2.174 billion RMB, a YoY increase of 77.6% [2] - For 2024-2026, the company is projected to achieve revenues of 26.487 billion RMB, 38.912 billion RMB, and 44.175 billion RMB, with YoY growth rates of 147.1%, 46.9%, and 13.5%, respectively [2] - Net profit for the same period is projected to be 5.092 billion RMB, 8.071 billion RMB, and 9.835 billion RMB, with YoY growth rates of 134.3%, 58.5%, and 21.8%, respectively [2] Market Position and Competitive Advantages - The company holds the top market share in the global optical module market, with a strong focus on R&D and technological innovation [1] - It has a robust global production capacity and a close partnership with leading overseas clients, ensuring its ability to meet large-scale orders [1] - The company's continuous investment in R&D, with expenditures increasing from 450 million RMB in 2019 to 810 million RMB in 2023, has helped build a strong technological moat [1]