HTSC·2025-11-03 03:33Investment Rating - The report maintains an "Overweight" rating for the company [6]. Core Views - The company's revenue for Q3 reached 3.891 billion RMB, representing a year-over-year increase of 16.27% and a quarter-over-quarter increase of 11.46%. However, the net profit attributable to shareholders decreased by 10.89% year-over-year to 174 million RMB, despite a quarter-over-quarter increase of 20.75% [1]. - The company is experiencing strong demand for high-end products driven by AI computing needs, particularly in the G.654.E fiber optic cable, which has become a preferred choice for long-distance trunk network upgrades [2]. - The overall gross margin for the first three quarters of 2025 was 28.83%, an increase of 1.01 percentage points year-over-year, while the net profit margin decreased by 2.02 percentage points to 4.57% [3]. - The company expects significant growth in net profit for 2025-2027, with projected figures of 865 million RMB, 1.621 billion RMB, and 2.392 billion RMB, respectively, reflecting year-over-year growth rates of 27.96%, 87.48%, and 47.51% [4]. Summary by Sections Financial Performance - Q3 revenue was 3.891 billion RMB, up 16.27% year-over-year and 11.46% quarter-over-quarter. For the first three quarters of 2025, total revenue was 10.275 billion RMB, a year-over-year increase of 18.18% [1]. - The net profit attributable to shareholders for Q3 was 174 million RMB, down 10.89% year-over-year, while the net profit for the first three quarters was 470 million RMB, down 18.02% year-over-year [1]. - The gross margin for the first three quarters was 28.83%, up 1.01 percentage points year-over-year, while the net profit margin was 4.57%, down 2.02 percentage points year-over-year [3]. Product Development and Market Position - The company is focusing on high-value products, with the G.654.E fiber optic cable gaining significant market share in recent group-level procurement by China Telecom [2]. - The company is leading in the research and industrialization of hollow-core fiber optics, and its MPO, AOC, and high-speed copper cable businesses are strong growth points, benefiting from the construction of AI data centers in North America [2]. Profitability Forecast - The report maintains profit forecasts for 2025-2027, with expected net profits of 865 million RMB, 1.621 billion RMB, and 2.392 billion RMB, indicating substantial growth rates [4]. - The target price for A shares is set at 100.55 RMB, while for H shares, it is 53.38 HKD, based on a projected PE ratio of 47x for 2026 [4].