EOPTOLINK(SZ:300502)2025-10-31 01:53Eoptolink Technology (300502.SZ) 3Q25 Investor Call Summary Company Overview - Company: Eoptolink Technology - Industry: Optical Communication Technology Key Financial Highlights - 3Q25 Revenue: Rmb 6.1 billion, up 153% YoY but 18% below Bloomberg consensus [1][6] - 3Q25 Gross Profit: Rmb 2.8 billion, up 185% YoY, 14% below consensus, with a gross margin of 46.9%, a 5.4 percentage points increase YoY [1][6] - 3Q25 Operating Profit: Rmb 2.6 billion, up 196% YoY, 18% below consensus [1][6] - 3Q25 Net Profit: Rmb 2.4 billion, up 205% YoY, 18% below consensus and below investor expectations of Rmb 3.0 billion [1][6] Management Insights - Order Delays: Management indicated that delays in customer order pull-ins impacted 3Q25 results but expect fulfillment in 4Q25, leading to a rebound [2] - Demand Outlook: Strong demand for 4Q25 and 2026 is anticipated, with management ramping up capacity to meet this demand [2][3] - Capacity Expansion: Capacity ramp-up is on track, with expectations for continued growth in 2026 and 2027 to fulfill customer demand [3] Market Position and Future Outlook - Market Demand: Management noted robust demand for SiPh products, particularly in the 800G and 1.6T segments, which are expected to see significant YoY increases [3] - Investment Recommendation: Despite the disappointing 3Q25 results, the company is viewed as a potential bottom-fishing opportunity with a robust demand setup for 2026 and 2027 [1] Valuation Metrics - Current Price: Rmb 406.10 [4] - Target Price: Rmb 472.00, implying a potential upside of 16.2% [4] - Market Capitalization: Rmb 403.65 billion (approximately US$ 56.86 billion) [4] Risks to Consider - Investment Risks: Potential risks include slower-than-expected data center investments, lower optical network capex by telecoms, margin pressures from price competition, and geopolitical tensions affecting technology sectors [9] Conclusion Eoptolink Technology's 3Q25 results were below expectations primarily due to order delays, but management's outlook for 4Q25 and beyond remains positive, supported by strong demand and capacity expansion plans. The stock is recommended for investors looking for potential recovery opportunities in the optical communication sector.