HGTECH(000988) 东兴证券·2024-12-04 10:13Investment Rating - The report gives a "Buy" rating for the company, indicating a positive outlook for investment [2][7]. Core Insights - The company, Huagong Technology (000988.SZ), has established advantages in product matrix, technological foresight, and production capacity in the optical module sector, driving rapid growth in its connectivity business [2][6]. - The demand for high-speed optical modules, particularly 400G and above, is expected to remain strong, driven by the needs of AI training clusters [19][50]. - The company is expanding its production capacity significantly, with plans to increase monthly production of 400G optical modules to 700,000 units and establish overseas manufacturing bases [38][39]. Summary by Sections Company Overview - Huagong Zhengyuan, a wholly-owned subsidiary of Huagong Technology, focuses on optical chips, modules, and components for applications in 5.5G, F5.5G, AIGC, and optical display fields, ranking 8th among global optical module manufacturers in 2023 [3][24]. Product Matrix and Technological Advantages - The company has a comprehensive product range covering 400G to 800G optical modules and is developing next-generation modules like 1.6T and 3.2T [28][29]. - The 800G optical module is currently a mainstream product for AI large model companies, with the company recognized for its competitive products in the industry [29][30]. Production Capacity - As of Q3 2024, the company has achieved a monthly production capacity of 400G optical modules between 400,000 to 450,000 units, with an 80% utilization rate [38][39]. - The company is also establishing a new production base in Thailand, set to begin operations in November 2024, to support the production of 800G LPO products [39][40]. Market Position and Growth Forecast - The company is gradually entering the supplier lists of major North American clients, with ongoing tests for various products [56]. - Revenue forecasts for 2024-2026 are projected at 131.56 billion, 160.89 billion, and 207.43 billion yuan, with net profits of 13.08 billion, 16.77 billion, and 22.11 billion yuan respectively [7][61].