Core Insights - Company reported a slight miss in Q3 2025 earnings expectations, with revenue of 4.03 billion yuan and a net profit of 228 million yuan, reflecting a year-on-year revenue growth of 20.93% but a net profit decline of 11.49% [1] - The company is experiencing a positive trend in internet switch revenue, driven by the delivery of data center products and innovative offerings such as 400G and 800G LPO optical modules [2] - The company has adjusted its profit forecasts for 2025 and 2026 downwards by 5.3% and 8.6% respectively, while maintaining an outperform rating and adjusting the target price down by 13.4% to 97 yuan [3] Financial Performance - For the first three quarters of 2025, the company achieved revenue of 10.68 billion yuan, a year-on-year increase of 27.50%, and a net profit of 680 million yuan, up 65.26% [1] - In Q3 2025, the company’s revenue was 4.03 billion yuan, showing a year-on-year growth of 20.93% but a quarter-on-quarter decline of 2.00% [1] - The gross margin for Q3 2025 improved to approximately 35.56%, a quarter-on-quarter increase of 5 percentage points, attributed to a recovery in the higher-margin campus network business [1] Business Development - The company is seeing a continuous increase in internet switch revenue, with a positive outlook for data center switch business as major internet firms prepare for new procurement rounds [2] - Innovative products such as the 1.6T silicon photonic LPO and ETH 128 supernode have been showcased, indicating the company's commitment to enhancing performance in low power consumption and reliability [2] - A new stock incentive plan has been proposed to motivate key employees, with performance targets set for net profit growth over the next three years [2] Profit Forecast and Valuation - The company has revised its profit forecasts for 2025 and 2026 downwards to 980 million yuan and 1.4 billion yuan respectively, reflecting cautious considerations regarding future expenses [3] - The current stock price corresponds to a P/E ratio of 44.0 times for 2026, with a target price adjustment based on a revised industry valuation [3]