Multiple growth engines ahead; leadership intact: 2.4T transceiver / NPO to start in 2027, 3.2T / CPO in longer term

Research evidence excerpt

Multiple growth engines ahead; leadership intact: 2.4T transceiver / NPO to start in 2027, 3.2T / CPO in longer term

Global Markets Research

Zhongji InnoLight 300308.SZ 300308 CH 31 July 2026

EQUITY: TECHNOLOGY

RatingMultiple growth engines ahead; leadership intact Remains Buy

Target price2.4T transceiver / NPO to start in 2027, 3.2T / CPO in Increased from CNY 1,375.00longer term CNY 1,325.00

Action: Maintain Buy; raise TP to CNY1,375, implying 52% upside Closing31 July 2026price CNY 902.01

Despite a recent pull-back in the share price, we think the strong fundamental growth

drivers for InnoLight remain unchanged over FY26-28F: 1) 1.6T and Silicon photonics Implied upside +52.4%

(SiPh) transceiver upgrades; 2) commercialization of 2.4T coherent-lite transceivers and

NPO (near-field packaging optics) beginning 2027F; and 3) 3.2T transceiver, XPO (extra- Market Cap (USD mn) 155,913.2

dense pluggable optics), and CPO (co-packaged optics) market expansion in the long ADT (USD mn) 5,251.3

term. We forecast FY26-27F global shipment forecasts for 800G/1.6T transceivers at

40.8-57.8mn/25.1-68.8mn, and we also estimate FY27-28F 2.4T transceivers Relative performance chart

shipments at 3-8mn units and NPO at 8mn/25mn units. Therefore, we raise FY26-28F

revenue/earnings forecasts by 2-5%/4-10%, to reflect the strong product upgrades and

margin expansion. We maintain our Buy rating and raise our TP to CNY1,375, based on

21x (previously 20x) FY27F EPS of CNY65.47, in line with WIND’s China A share

tech/electronic component sector median P/E. The stock is currently trading at 13.8x

FY27F EPS.

Margin expansion to continue with the ease of components shortage and product

upgrades in 2H26F

We think supply bottlenecks for upstream material (i.e., InP wafer) and components (i.e.,