Investment Rating - The report initiates coverage on the company with a "Buy" rating [5]. Core Views - The company has a comprehensive layout in the optical communication industry chain, with a strong vertical integration capability, which is expected to enhance its market share [9][51]. - The demand for optical modules is anticipated to surge due to advancements in AI algorithms, particularly with the introduction of DeepSeek, which is expected to drive a 56.5% year-on-year increase in high-speed shipments by 2025 [34][39]. - The company is well-positioned to benefit from the rapid growth in domestic computing infrastructure, with significant investments from major cloud service providers [49][51]. Financial Forecasts - Revenue projections for the company are as follows: 2023A: 60.61 billion CNY, 2024E: 75.88 billion CNY, 2025E: 104.10 billion CNY, and 2026E: 135.18 billion CNY, with growth rates of -12.31%, 25.20%, 37.19%, and 29.86% respectively [2]. - Net profit forecasts are: 2023A: 6.19 billion CNY, 2024E: 7.23 billion CNY, 2025E: 11.61 billion CNY, and 2026E: 15.02 billion CNY, with growth rates of 1.80%, 16.74%, 60.53%, and 29.42% respectively [2]. - The diluted EPS is projected to be 0.78 CNY in 2023, increasing to 1.89 CNY by 2026, with corresponding PE ratios decreasing from 74.70 to 30.80 [2]. Company Overview - The company has over 40 years of experience in the optical communication field and has established a vertically integrated platform covering optical chips, devices, and modules [9][51]. - It ranks fifth globally in the optical module industry as of 2023, with a market share of 5.8% [15]. - The company has a strong R&D team and advanced technology platforms, enabling rapid market response and innovation [54]. Market Dynamics - The optical module market is expected to grow significantly, driven by the increasing demand for high-speed data transmission in AI applications [39][46]. - The domestic optical module market is projected to reach approximately 6.5 billion USD by 2029, with a market share of 20-25% globally [52][51]. - The company is expected to benefit from the ongoing shift towards higher-speed optical modules, particularly in the context of AI and cloud computing [51][54].