Eoptolink receives a buy rating from China Galaxy, with revenue quality showing impressive growth
Eoptolink recently received a buy rating from China Galaxy, with a significant expected revenue growth in the next three years. It is projected that the revenue will be 6.408 billion yuan in 2024, 13.218 billion yuan in 2025, and 17.959 billion yuan in 2026, with average annual growth rates of 106.87%, 106.28%, and 35.86% respectively. By increasing the proportion of high-speed optical module products and research and development capabilities, the company's market share is expected to continue to rise. The optical module industry is expected to achieve growth of over 20% in 2025, and in the long term, the market space is expected to exceed 20 billion US dollars
On September 8, 2024, Eoptolink received a Buy rating from China Galaxy Securities, with 6 research reports focusing on Eoptolink in the past month.
The research reports project that Eoptolink will achieve revenues of 6.408 billion yuan, 13.218 billion yuan, and 17.959 billion yuan in 2024, 2025, and 2026, respectively, with year-on-year growth rates of 106.87%, 106.28%, and 35.86%. The reports believe that the improvement in revenue quality for Eoptolink is mainly due to the significant increase in the proportion of high-speed optical module products. Additionally, the company's research and development capabilities are outstanding, with significant breakthroughs and progress in high-speed optical modules, silicon optical modules, coherent optical modules, and 800GLPO optical modules. It is expected that as the recognition of the company's high-speed optical modules in overseas markets gradually increases, the company's market share is expected to continue to rise, empowering the company to maintain the momentum of the first half of 2024 and sustain long-term high-speed growth. Furthermore, the benign growth in AI capital expenditure by cloud vendors also drives high growth in the datacom optical module market. According to Lightcounting's forecast, the optical module industry is expected to grow by over 20% in 2025, and will maintain double-digit growth in 2026-2027, with the market size expected to exceed 20 billion US dollars by 2027. As optical module manufacturers are a core part of the industry chain, Eoptolink has significant production capacity and technological advantages, with the highest global market share. Therefore, it is expected that with continuous investment from cloud computing vendors in AI, the revenue quality of Eoptolink is likely to further improve, and performance is expected to marginally improve.
Risk Warning: Risks include AI development falling short of expectations, new product introductions falling short of expectations, R&D progress falling short of expectations, and intensified industry competition, among others
