Investment Rating - The report maintains a "Buy" rating for the company, with a target price raised to 591 RMB, reflecting a potential upside of 23.1% from the current price of 480 RMB [1][3][8]. Core Insights - The company's quarterly performance reached a new high, with Q3 revenue of 10.2 billion RMB, representing year-on-year and quarter-on-quarter growth of 57% and 26%, respectively. The gross margin significantly increased to 42.8%, up 9.2 and 1.3 percentage points from the same period last year and the previous quarter [1][8]. - Net profit surged to 3.1 billion RMB, marking a historical peak with year-on-year and quarter-on-quarter growth of 125% and 30%. The net profit margin improved to 30.7%, compared to 21.4% and 29.7% in the same period last year and the previous quarter [1][8]. - The demand for 800G optical modules and the increased adoption of silicon photonics solutions contributed to the scale effect and improved profitability. The management expects continued growth in 800G optical module demand and anticipates large-scale production of 1.6T silicon photonics products to begin in early 2026 [1][8]. Financial Summary - For FY23A, the company reported sales revenue of 10.7 billion RMB, with a year-on-year growth of 11.2%. Projections for FY24A, FY25E, FY26E, and FY27E are 23.9 billion RMB, 37.9 billion RMB, 73.4 billion RMB, and 105.7 billion RMB, respectively, with significant growth rates of 122.6%, 59.0%, 93.5%, and 44.0% [2][15]. - The gross margin is expected to improve from 33.0% in FY23A to 41.6% in FY25E, peaking at 44.3% in FY26E before slightly declining to 43.5% in FY27E [2][15]. - Net profit is projected to grow from 2.2 billion RMB in FY23A to 5.2 billion RMB in FY24A, reaching 10.8 billion RMB in FY25E, and further increasing to 23.2 billion RMB and 33.4 billion RMB in FY26E and FY27E, respectively [2][15]. Market Position and Outlook - The company is positioned as a leader in the optical module market, which is expected to mitigate supply chain risks. The management has secured long-term capacity with key suppliers to address potential supply chain challenges [1][8]. - The expansion of capital expenditures by major cloud service providers for AI infrastructure is anticipated to drive further sales growth for the company. Notable increases in capital expenditure forecasts from companies like Google, Meta, and Microsoft reinforce this positive outlook [1][8].