TFC(SZ:300394) Huachuang Securities·2024-03-19 16:00Investment Rating - The report assigns a "Strong Buy" rating for the company, Tianfu Communication [2][10]. Core Viewpoints - The company is a leading provider of optical device solutions, benefiting significantly from the growth in AI technology and the increasing demand for computing power, with a revenue of 1.939 billion yuan in 2023, up 62% year-on-year, and a net profit of 730 million yuan, up 81% year-on-year [2][26]. - The demand for optical modules is driven by AI, with trends indicating a rapid increase in the usage of high-speed optical modules, particularly with the upcoming release of 800G optical modules in 2024 and 1.6T modules in 2025 [9][10]. - The company has established a comprehensive supply platform for optical devices, expanding its product matrix from passive to active components, and has achieved stable mass delivery of its core product, the optical engine [9][10]. Summary by Sections Company Overview - Tianfu Communication has been deeply involved in the optical device industry for many years, evolving from a precision component manufacturer to a comprehensive platform enterprise with multiple device and packaging technology capabilities [17][19]. - The company has a clear shareholding structure, with the founders holding a significant portion of shares, ensuring stable control [19][21]. Industry Trends - The AI-driven demand for computing power is leading to increased investments from cloud vendors, which in turn accelerates the iteration of optical modules [9][10]. - The report highlights two major trends in the optical module market: the rapid increase in high-speed optical module usage driven by intelligent computing centers and the need for higher integration in optical interconnects due to speed limitations [9][10]. Competitive Advantages - The company possesses four key competitive advantages: leading technical capabilities, a one-stop integrated platform for optical devices, strong customer relationships, and superior profitability compared to peers [9][10]. - The company maintains a high level of R&D investment, ensuring its technological edge and stable position in the supply chain [9][10]. Financial Projections - The company is projected to achieve net profits of 730 million yuan, 1.403 billion yuan, and 2.033 billion yuan for the years 2023, 2024, and 2025, respectively, with year-on-year growth rates of 81.2%, 92.1%, and 44.9% [10][26]. - The report anticipates significant revenue growth driven by the demand for both passive and active optical devices, particularly in the context of AI computing [10][26].