Core Viewpoint - The company maintains profit forecasts, raises target price, and retains a buy rating, with strong performance in the first half of the year leading to a turnaround in profitability and revenue growth [1][2]. Financial Performance - The company reported a revenue of 214 million yuan for the first half of 2025, a year-on-year increase of 68.08%, and a net profit attributable to shareholders of 8.97 million yuan, marking a return to profitability [2]. - In Q2 alone, the company achieved a revenue of 120 million yuan, a year-on-year growth of 59.98% and a quarter-on-quarter increase of approximately 30%, with a net profit of 16.47 million yuan, up 171.53% year-on-year [2]. Technological Innovation - The company has made significant breakthroughs in high-power products and VCSEL technology, with a single-tube chip achieving a continuous power of 132W, surpassing the previous maximum of 100W [3]. - The efficiency of VCSEL chips has improved to 74%, with applications in consumer electronics, optical communications, and automotive laser radar [3]. - The company has developed capabilities in three types of optical communication chips: EML, VCSEL, and CW Laser, with 100G EML already in mass production and 200G EML samples being sent out [3]. Catalysts - The acquisition process is progressing smoothly, and the company has received orders for CW products [4].

Investment Rating - The investment rating for the company is "Accumulate" [4] Core Views - The company's performance in Q1 2025 showed significant improvement, primarily due to successful market expansion and increased revenue from high-power products. Additionally, previously established businesses in optical communication have gained recognition from end customers, leading to bulk shipments and opening up growth opportunities in other business areas [2][4] - The gross margin for 2024 decreased significantly to 23.85%, down 9.69 percentage points year-on-year, mainly due to intensified competition in the downstream market. However, the gross margin for Q1 2025 improved to 28.72%, up 2.76 percentage points year-on-year [3] - The company is recognized as a leader in domestic optical chips and is working towards becoming a platform-based enterprise, achieving breakthroughs in high-power semiconductor laser chips and VCSEL technology [4][8] Financial Summary - In 2024, the company achieved operating revenue of 273 million, a year-on-year decrease of 6.05%, and a net profit attributable to the parent company of -100 million, down 8.47% year-on-year. For Q1 2025, the operating revenue was 94 million, an increase of 79.63% year-on-year, with a net profit of -7 million, up 61.44% year-on-year [1][11] - The company forecasts operating revenues of 406 million and 524 million for 2025 and 2026, respectively, with a projected net profit of 51 million and 109 million for the same years. The EPS is expected to be 0.29 and 0.62 for 2025 and 2026, respectively [11][14] - The company’s total market capitalization is approximately 9.972 billion, with a free float market capitalization of about 6.008 billion [4]