TFC(SZ:300394) Changjiang Securities·2025-11-04 23:30Investment Rating - The investment rating for the company is "Buy" and is maintained [6]. Core Views - The company reported a slight decline in revenue in Q3 2025 due to a bottleneck in the supply of core materials, but this is expected to improve in subsequent quarters. The gross margin significantly increased, driven by optimized cost control, enhancing profitability [3][8]. - The production capacity in Thailand is steadily ramping up, with phase two expected to achieve mass production next year. The demand for high-speed optical modules remains strong, driven by AI, positioning the company to benefit as a core component supplier [3][8]. - The company is well-positioned to benefit from the emerging CPO/OIO market, with substantial technological accumulation and a clear strategic position with major overseas clients [8]. Summary by Sections Financial Performance - For the first three quarters of 2025, the company achieved revenue of 3.92 billion yuan, a year-on-year increase of 63.6%. The net profit attributable to shareholders was 1.47 billion yuan, up 50.1% year-on-year. In Q3 alone, revenue was 1.46 billion yuan, a year-on-year increase of 74.4% but a slight decline of 3.2% quarter-on-quarter [3][8]. - The gross margin for Q3 increased by 4.3 percentage points to 53.7%, with effective cost management reflected in lower expense ratios across sales, management, R&D, and financial costs [8]. Production Capacity - The company's overseas production capacity in Thailand is progressing well, with phase one already in production since mid-2024. Phase two is currently in the R&D and customer validation stage, with expectations for scale production in 2026 [8]. Market Position and Future Outlook - The company is strategically positioned in the CPO/OIO market, with a focus on R&D investment, which totaled 200 million yuan in the first three quarters of 2025, a year-on-year increase of 15.8%. This positions the company to maintain its competitive edge and achieve valuation premiums in the future [8]. - Profit forecasts for 2025-2027 indicate net profits of 2.115 billion yuan, 3.120 billion yuan, and 3.861 billion yuan, with corresponding year-on-year growth rates of 57%, 48%, and 24% [8].