中际旭创：Solid 3Q with intact near-term prospects; Maintain BUY

Investment Rating - The report maintains a "BUY" rating for the company, with an adjusted target price (TP) of RMB186, reflecting a 19.1% upside from the current price of RMB156.16 [1][3]. Core Insights - The company reported a solid performance in Q3, with revenue increasing by 115.2% year-over-year (YoY) and 9.4% quarter-over-quarter (QoQ), while net profit rose by 104.4% YoY and 3.3% QoQ, aligning with expectations [1]. - Management indicated that the sequential revenue growth slowdown was due to supply chain bottlenecks and unfavorable USD/RMB exchange rate fluctuations, but double-digit growth was still achieved when excluding these impacts [1]. - Strong demand for high-speed optical products, particularly 400G and 800G, is expected to drive growth, with mass shipments of 1.6T products anticipated in the coming months [1]. - Price increases in the optical supply chain driven by AI demand may lead to higher raw material costs, but the company is well-positioned to pass these costs onto customers due to strong product demand [1]. Financial Performance Summary - Revenue is projected to grow from RMB24.27 billion in 2024E to RMB34.15 billion in 2025E, representing a 40.7% increase [7]. - Net profit is expected to rise from RMB5.28 billion in 2024E to RMB7.63 billion in 2025E, reflecting a 44.5% growth [7]. - Gross profit margin (GPM) is expected to remain stable around 33.3% in Q3 2024, while net profit margin (NPM) is projected at 21.4% [1]. Market Position and Shareholder Structure - The company has a significant shareholding structure, with Shandong Zhongji Investment Holdings Co. holding 11.3% and Wang Weixiu holding 6.2% [3]. - The stock is currently trading at 22.5x 2025E P/E, which is below its 5-year historical average of 26.9x [1][3].