Investment Rating - The report initiates coverage with a "Buy" rating for the company [5] Core Insights - The company is a leading provider of "laser + intelligent manufacturing" system solutions, with a significant competitive advantage in the optical communication sector, ranking among the top ten globally in optical module business [5] - The optical module market is experiencing robust growth, with a projected compound annual growth rate (CAGR) of approximately 27% from 2023 to 2029, expanding from a market size of USD 6.25 billion to USD 25.8 billion [13] - The company is expected to achieve substantial revenue growth, with projected revenues of RMB 16.33 billion, RMB 22.14 billion, and RMB 27.56 billion for 2025, 2026, and 2027, respectively, representing year-on-year growth rates of 39.4%, 35.6%, and 24.5% [5][30] - The company’s net profit is forecasted to reach RMB 1.86 billion, RMB 2.30 billion, and RMB 2.82 billion for the same years, with growth rates of 52.5%, 23.3%, and 23.0% [5][30] Financial Data and Profit Forecast - Total revenue for 2023 is reported at RMB 10.21 billion, with a projected increase to RMB 11.71 billion in 2024, and further growth to RMB 16.33 billion in 2025, reflecting a year-on-year growth of -15.0%, 14.7%, and 39.4% respectively [4][30] - The company’s gross margin is expected to improve from 21.5% in 2024 to 22.9% in 2025, driven by the increasing sales of high-speed optical modules [5][30] - The return on equity (ROE) is projected to rise from 12.0% in 2024 to 15.5% in 2025, indicating enhanced profitability [4][30] Market Position and Competitive Landscape - The company’s optical module business has seen a significant increase in revenue, with a 124% year-on-year growth in the first half of 2025, driven by the successful delivery of 400G and 800G modules [5] - The company is strategically positioned to capitalize on the growing demand for optical modules in AI computing and supercomputing scenarios, with expectations of a demand for 40 to 50 million units in overseas markets by 2025 [5][30] - The competitive landscape is characterized by a shift towards higher-speed products, with the company’s 800G modules expected to gain market share as they transition from 400G [5][30]