Suzhou TFC Optical Communication 300394.SZ 300394 CH Global Markets Research 26 August 2025 EQUITY: NETWORKING Solid 2Q25 results; optical upgrade cycle accelerates 1.6T & 3.2T transceivers, CPO to drive long-term growth Maintain Buy, raise TP to CNY169, implying 16.7% upside TFC reported 1H25 results with revenue/earnings growth of 58%/37% y-y, translating into 2Q25 growth of 83%/50% y-y (+60% / 66% q-q), beating our 2Q25 estimates by 33%/22%. We think the q-q increase in revenue growth was likely due to t ...

融券方面，腾景科技8月26日融券偿还0.00股，融券卖出0.00股，按当日收盘价计算，卖出金额0.00元； 融券余量0.00股，融券余额0.00元，超过近一年70%分位水平，处于较高位。 资料显示，腾景科技股份有限公司位于福建省福州市马尾科技园区珍珠路2号(自贸试验区内)，成立日 期2013年10月12日，上市日期2021年3月26日，公司主营业务涉及专业从事各类精密光学元件、光纤器 件研发、生产和销售。主营业务收入构成为：精密光学元组件79.78%，光纤器件17.09%，光测试仪器 2.94%，其他(补充)0.19%。 截至3月31日，腾景科技股东户数1.12万，较上期增加6.41%；人均流通股11525股，较上期减少6.02%。 2025年1月-3月，腾景科技实现营业收入1.13亿元，同比增长20.60%；归母净利润1303.40万元，同比增 长15.81%。 8月26日，腾景科技跌4.22%，成交额5.38亿元。两融数据显示，当日腾景科技获融资买入额7560.63万 元，融资偿还8155.10万元，融资净买入-594.47万元。截至8月26日，腾景科技融资融券余额合计3.51亿 元。 融资方面，腾景科技 ...

Group 1 - The core product of the company is passive optical devices, active optical devices, and optical sensing products, with passive optical devices accounting for over 90% of the revenue [1]

Group 1: Business Structure and Financial Performance - The company's main products are passive optical devices, active optical devices, and optical sensing products, with passive optical devices accounting for over 90% of revenue [2][4] - The gross margin for Q1 2025 was high due to product structure, but it is not expected to be a norm; Q2 gross margin decreased compared to Q1 due to production line expansion [3][4] - The company has maintained a gross margin of around 30% in recent years and is confident in sustaining this level in the future [3] Group 2: Capacity and Production - The company is expanding capacity significantly by renting new factories domestically and utilizing a production base in Vietnam [4] - The capacity changes disclosed in the semi-annual report do not reflect the true situation due to the variety of products involved [4] Group 3: Market and Trade Impact - The impact of U.S. tariffs on the company is minimal, as the settlement model with major clients is based on FOB, allowing for effective communication and compliance to mitigate tariff effects [5] - The company is optimistic about future development, especially in the context of AI-driven global computing demand [6] Group 4: Research and Development - The company has significantly expanded MT connector capacity and possesses advanced cutting and testing technology, enhancing the competitiveness of its single-mode low-loss MT connectors [7] - Ongoing R&D efforts focus on CPO-related products, including flexible boards and high-core-count connectors, maintaining a leading position in the flexible board sector [8][10] - The company is developing new products such as hollow-core fibers and V-groove products, targeting market-leading technologies and customer needs [11] Group 5: Customer Relations and Market Strategy - The company has a high dependency on its largest customer but maintains a strong supply relationship, aiming to diversify its customer base and product applications [17] - The company emphasizes the use of capital to accelerate development and plans to disclose relevant matters in accordance with regulatory requirements [18] Group 6: Employee Incentives - The company adheres to a principle of shared benefits and plans to continue incentivizing employees who contribute significantly to its success [18]

Summary of Sunny Optical (2382.HK) Conference Call Company Overview - **Company**: Sunny Optical Technology Group Co., Ltd. (2382.HK) - **Industry**: Optical components and optoelectronic products Key Financial Highlights - **1H25 Revenue**: CNY 19.652 billion, a 1% increase HoH and a 4% increase YoY [6] - **Gross Margin (GM)**: Improved to 19.8% in 1H25 from 19.3% in 2H24, with optoelectronic products GM at 10.6% (up from 8.2% in 1H24) [6][13] - **Operating Income (OP)**: Increased by 18% HoH to CNY 1.484 billion, 5% ahead of Bloomberg consensus [6][7] - **Net Income**: CNY 1.646 billion, a 2% increase HoH and a 53% increase YoY [6] - **Operating Expense (Opex) Ratio**: Improved to 12.3% in 1H25 from 12.9% in 2H24 [6] Segment Performance - **Optoelectronic Products**: Revenue growth of 2% YoY to CNY 13.4 billion, accounting for 68% of total revenues; driven by vehicle modules [13] - **Optical Components**: Revenue growth of 11% YoY to CNY 6.1 billion, representing 31% of total revenues; supported by handset lens and vehicle lens sales [9][13] Margins and Ratios - **Gross Profit (GP)**: CNY 3.894 billion in 1H25, a 20% increase YoY [6] - **Operating Profit Margin (OPM)**: Increased to 7.6% in 1H25 from 6.5% in 2H24 [6] - **Net Margin (NM)**: Improved to 8.4% in 1H25 from 8.3% in 2H24 [6] Future Outlook and Valuation - **Target Price**: HK$89.00, implying an upside of 18.7% from the current price of HK$74.95 [10][16] - **Valuation Methodology**: Based on a target P/E of 21.6x for 2026E, consistent with historical trading range [10][14] - **Risks**: Include competition in handset lens, shipment growth variability in camera modules, and currency fluctuations [15] Additional Insights - **Product Mix Improvement**: The better product mix in optoelectronic products contributed to margin improvements [1] - **Market Position**: The company maintains a strong position in the optical components market, particularly in vehicle and handset lenses [9][13] - **Growth Drivers**: Increased demand for AR/VR cameras and vehicle modules are key growth drivers for the company [13] This summary encapsulates the essential financial metrics, segment performance, and future outlook for Sunny Optical, providing a comprehensive overview for potential investors and stakeholders.

Investment Rating - The investment rating for Sunny Optical is maintained at Neutral with a 12-month price target of HK$89.00, indicating an upside potential of 18.0% from the current price of HK$75.45 [18][16][10]. Core Insights - Handset lens shipments decreased by 13% YoY and 3% MoM to 95 million units in June, leading to a total of 594 million units in 1H25, which is a 6% decline YoY [8][9]. - Camera modules saw a slight increase of 1% YoY and 11% MoM, totaling 42 million units in June, resulting in a 21% decline YoY to 228 million units in 1H25 [9][8]. - Vehicle lens shipments grew significantly by 45% YoY and 3% MoM to 11 million units in June, contributing to a total of 65 million units in 1H25, which is a 22% increase YoY [8][9]. Summary by Sections Shipment Analysis - Handset lens shipments were 95 million units in June, down 3% MoM and 13% YoY, with 1H25 shipments totaling 594 million units, reflecting a 6% decline YoY [8]. - Camera modules increased to 42 million units in June, up 11% MoM and 1% YoY, with 1H25 shipments at 228 million units, down 21% YoY [9]. - Vehicle lens shipments reached 11 million units in June, up 3% MoM and 45% YoY, leading to 1H25 shipments of 65 million units, a 22% increase YoY [8]. Earnings Revision - Earnings for 2025-2027 have been revised upwards by 3% to 4% due to higher revenues from vehicle lens shipments and improved gross margins driven by product mix changes [10][11]. - The gross margin is expected to improve by 0.1 to 0.2 percentage points across 2025-2027 due to operational efficiencies [10]. Valuation - The target price is derived from a near-term P/E multiple of 21.6x for 2026E, reflecting a correlation between peers' P/E and net income growth [11][16]. - The target price has been raised to HK$89.0 from HK$83.1, aligning with the company's historical trading range [11][16].

Core Viewpoint - The CPO (Co-Packaged Optics) industry is nearing a critical point of explosion, with mass production expected in the second half of 2025, and the market's previous fears of disruption have been exaggerated [1][2][19]. Group 1: CPO Industry Outlook - CPO technology is anticipated to accelerate growth compared to previous optical communication technology transitions, with a significant market shift expected by 2027 [2][12]. - The total market size for CPO is projected to exceed $5 billion by 2030 [12]. - The optical components industry is transitioning from fear of technological disruption to being supported by strong fundamentals driven by AI [30]. Group 2: Performance and Profitability - CPO technology offers tangible performance advantages, including over 30% reduction in power consumption, doubled port density, and enhanced signal integrity [7][9]. - The gross margin for CPO business is expected to exceed 50%, significantly higher than the 30% margin for traditional pluggable transceivers [22][19]. - Coherent and Lumentum are positioned as core beneficiaries, with Coherent's EPS forecasted to reach $5.70 in 2027, and Lumentum's EPS expected to rise to $5.90 in the same year [22][24]. Group 3: Market Dynamics and Key Players - The market for pluggable transceivers is projected to grow from $11 billion in 2025 to $23 billion by 2030, with a compound annual growth rate of 17% [16]. - Major players benefiting from the CPO supply chain include Broadcom, NVIDIA, TSMC, Corning, and Fabrinet, each playing a crucial role in the development and deployment of CPO technology [26][31].

Core Viewpoint - The stock prices of optical module companies have surged, with notable increases in companies like Tianfu Communication, Zhongji Xuchuang, and LianTe Technology, while the communication ETF (515880) rose over 3% [1] Group 1: Market Performance - In the first four months of 2025, China's optical module export total was 13.2 billion yuan, a year-on-year decrease of 1.2% [1] - Sichuan province's export value reached 3.173 billion yuan, showing a year-on-year increase of 83.7% [1] - Hubei province's export value was 1.341 billion yuan, with a year-on-year growth of 84.6% [1] - Shanghai's export value was 920 million yuan, reflecting a significant year-on-year increase of 427.2% [1] Group 2: Industry Growth Projections - By 2025, China's total optical module exports are expected to grow by 13.5% year-on-year [1] - In Q1 2025, the combined capital expenditure of the four major cloud service providers in North America was 76.5 billion dollars, marking a year-on-year increase of 64% [1] - Cignal AI forecasts that the data center optical device market will grow by over 60% in 2025, driven by the continued rollout of 400G and 800G products [1] Group 3: Future Trends - Operators are expected to transition to 1.6T optical modules and 800ZR coherent modules on a large scale starting in the second half of 2025 [1] - The 800G data center optical modules aimed at AI and general computing are projected to be the fastest-growing segment in 2025 [1] - The optimistic outlook for capital expenditure from leading cloud providers, along with the recovery of the overseas computing power market and the development of AI, is expected to drive stable and continuous growth in the demand for optical device products [1]

Financial Data and Key Metrics Changes - Third quarter revenue was $425.2 million, exceeding the high end of guidance, with non-GAAP EPS of $0.57 [21] - Non-GAAP gross margin for Q3 was 35.2%, up 290 basis points sequentially and 650 basis points year-over-year [21] - Non-GAAP operating margin was 10.8%, an increase of 290 basis points sequentially and 1,100 basis points year-over-year [21] - Cash and short-term investments decreased by $30 million to $867 million [23] Business Line Data and Key Metrics Changes - Cloud and Networking segment revenue was $365.2 million, up 8% sequentially and 16% year-over-year [23] - Industrial Tech segment revenue decreased by 5% sequentially but increased by 14% year-over-year, with a profit margin of 4.3% [24] - Cloud and Networking segment profit increased to 20%, up 380 basis points sequentially and 540 basis points year-over-year [24] Market Data and Key Metrics Changes - The overall market is expected to grow at a compound annual growth rate of over 25% over the next five years, driven by the convergence of optics and electronics [9] - Demand from hyperscale cloud customers continues to be a significant driver of revenue growth [11] Company Strategy and Development Direction - The company aims to achieve quarterly revenue of $750 million, gross margins above 40%, and operating margins greater than 20% [8] - Focus on expanding capabilities in the optical components market, particularly in transceivers and co-packaged optics [10][13] - Strategic investments are being made in high-growth areas, particularly cloud and AI applications [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving medium and long-term financial targets despite macroeconomic uncertainties and tariff impacts [19] - The company is focused on pricing, disciplined spending, and execution to navigate challenges [19] - Anticipated strong sequential growth in the Cloud and Networking segment for Q4, driven by new capacity and demand from network equipment manufacturers [16] Other Important Information - The company is ramping production in CW lasers for silicon photonics transceiver applications [12] - The company has taken actions to rationalize the Industrial Tech portfolio, closing two R&D sites [17] Q&A Session Summary Question: How is the company tracking towards the $500 million revenue target? - Management confirmed they are still on track for the $500 million target by the end of the year, guiding quarter by quarter [31] Question: Update on datacom chip business performance? - The company is outperforming initial expectations in terms of volume and ASP, with a focus on EMLs [32][34] Question: Clarification on tariff headwinds? - The company quantified a 100 basis point headwind to gross margins due to increased component costs and tariffs [41][43] Question: Contributions from co-packaged optics? - Co-packaged optics are expected to take time to ramp, with a focus on laser components in the near term [48] Question: Telecom performance and supply constraints? - Telecom performance met expectations, with improvements anticipated in supply for pumps and tunables moving into Q4 [99][100] Question: Guidance caution related to macro or tariffs? - Management acknowledged macro uncertainty but expressed confidence in the guidance provided, with an overall positive trend in demand [105]