仕佳光子20250605

Summary of the Conference Call for Shijia Photonics Company Overview - Company: Shijia Photonics - Industry: Optical Communication Key Points and Arguments Production and Capacity Expansion - The Thai factory of Shijia Photonics is expanding production in an orderly manner, with capacity gradually being released in Q2. Domestic expansion is also ongoing to meet increasing market demand [2][4] - The company has strategically stocked materials to mitigate supply shortages, including fiber optics and connectors, ensuring optimistic growth in overall performance for Q1 and Q2 [3] Demand and Market Trends - Significant growth in demand for optical modules is expected next year, particularly for FR2 and FR4 products, with a stable and optimistic supply situation for AWG components [2][8] - The data center construction is driving an increase in high-margin multi-core optical cable orders, with good performance in Q1 and growth in both gross profit and revenue [2][14] Financial Performance - The company reported a loss in Q1 but expects to narrow losses or achieve breakeven in Q2, contingent on successfully transitioning to three-inch indium phosphide substrates and price increases for 2.5G DFB products [2][11] - The traditional 2.5G DFB market is expected to remain flat compared to last year due to capacity constraints, with a gradual shift to three-inch wafers anticipated to improve capacity over time [10] Strategic Developments - The company has made breakthroughs with strategic large customers, particularly overseas component suppliers, with increasing demand for MPO products [2][5] - Continuous recruitment and training of personnel are being conducted to support MPO business development, with production lines operating in shifts to maximize output [2][27] Future Outlook - Over the next three years, the market demand for 800G optical modules is projected to grow significantly, with AWG product penetration expected to increase [2][26] - The company is optimistic about the future, particularly in the CW business, with incentive programs in place to enhance yield and gross margins [9] Challenges and Risks - The company faces challenges in the traditional access network business, where profitability remains difficult if it continues to focus on 2.5G products. A shift towards 10G or 25G products is seen as a more favorable direction [11] - The impact of tariffs on various business segments is minimal, as the company has the ability to switch production origins to benefit from exemption policies [6][7] Additional Insights - The AWG component's gross margin is expected to improve as production scales up, with lower equipment amortization costs contributing to higher profitability [18] - The company is cautious about expanding production capacity blindly and will evaluate the situation based on order demand [22][25] Conclusion - Shijia Photonics is positioned for growth in the optical communication sector, with strategic expansions, a focus on high-demand products, and a commitment to improving financial performance through operational efficiencies and market adaptations [2][28]