EOPTOLINK(SZ:300502) Tianfeng Securities·2024-05-06 06:24Investment Rating - The investment rating for the company is "Buy" with a target price of 86.5 CNY, maintaining the rating for the next six months [1]. Core Views - The company reported a significant improvement in quarterly profitability, with LPO+1.6T being a long-term growth driver. The annual revenue for 2023 was 3.098 billion CNY, a decrease of 6.43% year-on-year, while the net profit attributable to the parent company was 688 million CNY, down 23.82% year-on-year. However, in Q1 2024, the revenue surged to 1.113 billion CNY, an increase of 85.41% year-on-year and 10.12% quarter-on-quarter, with a net profit of 325 million CNY, up 200.96% year-on-year and 25.40% quarter-on-quarter [1][2]. Financial Data Summary - Revenue: 2023 revenue was 3,097.61 million CNY, with a projected increase to 6,135.44 million CNY in 2024, reflecting a growth rate of 98.07% [2][5]. - Net Profit: The net profit for 2023 was 688.36 million CNY, expected to rise to 1,609.98 million CNY in 2024, indicating a growth rate of 133.89% [2][5]. - Earnings Per Share (EPS): EPS for 2023 was 0.97 CNY, projected to increase to 2.27 CNY in 2024 [2][5]. - Profitability Ratios: The company experienced a decline in gross margin in 2023 but showed a significant improvement in Q1 2024, with a gross margin of 42%, up 7.96% year-on-year [1][2]. Market Position and Growth Drivers - The company is benefiting from the increasing demand for 400G optical modules, with expectations of a more than 30% increase in shipment volume. The average selling price (ASP) of modules increased from 428 CNY to 503 CNY [1]. - The sales to major clients rose from 980 million CNY to 1.14 billion CNY, indicating strong demand and market positioning [1]. - The company is expected to leverage AI and cloud computing data center markets for long-term growth, with LPO+1.6T identified as a key growth point [1][2].