ZHONGJI INNOLIGHT(300308) 西南证券·2024-04-24 11:00Investment Rating - Buy (Upgraded) with a target price of 208.00 RMB for the next 6 months [1] Core Views - The company's performance met expectations, driven by strong growth in 800G products [2] - High-end optical modules contributed significantly to revenue growth, with 800G/400G products increasing their share [2] - The company's gross margin improved due to higher sales of high-end products, but Q1 2024 saw slight pressure on profitability [3] - The company is focusing on expanding its delivery capacity for 800G and 400G products, aiming to strengthen its market position and international strategy [3] - The company is accelerating the market introduction of 1.6T optical modules, targeting mass production by 2025 [3] Financial Performance - 2023 revenue reached 10.725 billion RMB, up 11.23% YoY, with net profit attributable to shareholders of 2.181 billion RMB, up 78.19% YoY [2] - Q4 2023 revenue was 3.695 billion RMB, up 33.06% YoY, with net profit of 885 million RMB, up 138.54% YoY [2] - Q1 2024 revenue surged to 4.843 billion RMB, up 163.59% YoY, with net profit of 1.009 billion RMB, up 303.84% YoY [2] - High-speed optical module revenue reached 9.8 billion RMB in 2023, up 12% YoY, with ASP increasing by 27.1% to 1,798 RMB per unit [2] Business Segments - Optical communication transceiver modules accounted for 95% of total revenue, generating 10.18 billion RMB in 2023 [2] - Optical component and automotive optoelectronics businesses contributed 200 million RMB and 330 million RMB, respectively [2] Profitability and Cost Control - 2023 gross margin improved to 33%, up 3.4 percentage points YoY, driven by higher sales of high-end products [3] - Q1 2024 gross margin was 32.8%, up 3.2 percentage points YoY but down 2.6 percentage points QoQ due to product price reductions [3] - Sales and management expense ratios were well controlled, with Q1 2024 ratios at 0.9% and 2.7%, respectively [3] Future Outlook - The company expects EPS of 6.5 RMB, 8.76 RMB, and 10.88 RMB for 2024-2026, with a 59% CAGR in net profit [3] - High-speed optical module sales are expected to grow significantly, with 800G modules projected to account for over 50% of sales by 2026 [7] - The company is pre-researching next-generation optical module technologies to maintain its competitive edge [3] Valuation - The company's 2024 PE ratio is 24x, below the industry average of 32x, indicating potential undervaluation [8] - The target price of 208 RMB is based on a 32x PE multiple for 2024 [3] Industry Comparison - The company's valuation is lower than peers such as Xinyisheng (36.56x PE) and Accelink (38.36x PE) [9] - The company's growth prospects are supported by its leadership in high-speed optical modules and strong market demand [7]