T&S(300570) Zhongyuan Securities·2025-01-24 13:27Investment Rating - The report assigns a "Buy" rating for the company, indicating an expected increase of over 15% relative to the CSI 300 index within the next six months [24]. Core Views - The company is one of the largest manufacturers of dense connection products globally, with strong demand for MPO connectors driven by data center construction [5][10]. - The company anticipates a significant increase in net profit for 2024, with estimates ranging from 230 million to 275 million yuan, representing a year-on-year growth of 48.30% to 77.32% [4]. - The company's gross margin has been steadily improving, reaching 33.78% in the first three quarters of 2024, up 4.95 percentage points year-on-year [7]. Summary by Sections Company Overview - The company specializes in optical device products, optical sensing products, and solutions, with a revenue composition of 97.15% from optical devices and 0.24% from optical sensing products in H1 2024 [5]. - The company has a strong technological foundation and strategic layout in the optical communication field, which supports significant revenue and profit growth [5]. Financial Performance - The company expects a net profit of 840 million to 1.29 billion yuan for Q4 2024, showing a year-on-year increase of 67.50% to 157.03% [5]. - Revenue projections for 2024 to 2026 are 1.408 billion yuan, 2.007 billion yuan, and 2.615 billion yuan, respectively, with corresponding net profits of 255 million yuan, 397 million yuan, and 545 million yuan [11]. Market Dynamics - The demand for MPO connectors is surging due to the growth of AI and the construction of large data centers, which is expected to enhance the company's market share in the dense connection product sector [9][10]. - The optical communication industry is projected to grow steadily, with a 16.5% year-on-year increase in computing power in China for 2024, and the overall market for optical modules expected to grow over 40% [9]. Research and Development - The company is committed to enhancing its R&D capabilities, with R&D expenses increasing by 40.69% year-on-year to 61 million yuan in the first three quarters of 2024 [7]. - The company is focusing on upgrading passive products and expanding the technology of flexible optical boards, which broadens their application scenarios [7].