Core Insights - The report provides an analysis of the global and Chinese optical module industry, highlighting the product layout of representative companies and a comparative analysis of segmented products. Group 1: Product Layout of Representative Companies - Major Chinese optical module companies have product lines covering transmission rates up to 800G and below, including 10G, 25G, 40G, 50G, 100G, 200G, 400G, and 800G modules [1]. - The table outlines the specific products offered by companies such as Guangxun Technology, Zhongji Xuchuang, and others across various transmission rates, indicating a comprehensive coverage in the optical module market [1]. Group 2: 10G Optical Module Market - The 10G optical module market is mature, primarily featuring XFP and SFP+ modules, with SFP+ being favored for its lower cost, smaller size, and strong compatibility [3]. - 10G data center solutions typically involve 10G switches paired with SFP+ modules and LC fiber jumpers, emphasizing the importance of matching switch rates with corresponding optical modules [3]. Group 3: 40G Optical Module Demand - The 40G optical module, particularly the QSFP+ type, is widely used due to its compact design and ability to meet high-density, high-speed market demands [6]. - Transitioning from 10G to 40G is driven by the need for increased bandwidth and throughput in data centers, with 40G solutions often involving 40G switches and QSFP+ modules [6]. Group 4: 100G Optical Module Applications - The 100G optical module is primarily utilized in cloud data centers and high-speed networks, with QSFP28 emerging as the mainstream packaging method [7]. - Significant technological advancements in 100G modules include digital coherent receiver technology and advanced error correction coding, catering to evolving user demands [7]. Group 5: 400G Optical Module Commercialization - The 400G optical module is set to become commercially viable in 2023, driven by the increasing demand from AI model training and 5G network construction [10]. - Major Chinese telecom operators are expected to deploy 400G modules extensively, with significant market share anticipated by 2024-2025 [10]. Group 6: 800G Optical Module Projections - The 800G optical module is projected to become mainstream by 2025, primarily driven by the needs of AI data centers for large-scale GPU cluster interconnections [13]. - Different types of 800G modules are categorized based on transmission distance, catering to various applications from data center interconnections to long-distance transmission [15]. Group 7: 1.6T Optical Module Development - The 1.6T optical module is expected to see commercial rollout in 2025, with gradual scaling from initial small batch shipments to larger production volumes by year-end [16]. - Key players like Nvidia and Zhongji Xuchuang are leading the early adoption and certification processes for 1.6T modules [18].

Core Viewpoint - The A-share market has reached a historical high with 222 stocks closing above 100 yuan, indicating a significant trend in high-value stocks [1] Group 1: Stock Performance - The stock with the highest closing price is Cambrian Technology-U at over 1400 yuan, followed by Kweichow Moutai at 1376 yuan and Source Code Technology at 748.29 yuan [1] - Several stocks, including Moore Threads-U, Zhongji Xuchuang, Guodun Quantum, and Muxi Co., have also surpassed 500 yuan in closing price [1] Group 2: Sector Analysis - The majority of the top ten stocks by closing price are technology companies, with Kweichow Moutai being the only exception not in the tech sector [1]

Group 1 - The A-share market has reached a historical high with 222 stocks closing above 100 yuan as of January 19, 2026 [1] - On January 12, 2026, there were 219 stocks above 100 yuan, nearly matching the previous peak of 219 stocks on November 29, 2021 [1] - The top three stocks by closing price are Cambrian-U at over 1400 yuan, Kweichow Moutai at 1376 yuan, and Yuanjie Technology at 748.29 yuan [1] Group 2 - Several stocks, including Moer Thread-U, Zhongji Xuchuang, Guodun Quantum, and Muxi Shares-U, have also surpassed 500 yuan [1] - The majority of the top ten stocks above 100 yuan are from the technology sector, with Kweichow Moutai being the only non-tech stock in the top ten [1]

Market Overview - The Shanghai Composite Index fell by 0.45% last week, closing at 4101.91 points, with a high of 4190.87 points [1] - The Shenzhen Component Index increased by 1.14%, closing at 14281.08 points, with a high of 14459.21 points [1] - The ChiNext Index rose by 1.0%, closing at 3361.02 points, with a high of 3416.84 points [1] - In the global market, the Nasdaq Composite Index decreased by 0.66%, the Dow Jones Industrial Average fell by 0.29%, and the S&P 500 dropped by 0.38% [1] - In the Asia-Pacific region, the Hang Seng Index increased by 2.34%, and the Nikkei 225 Index rose by 3.84% [1] New Stock Issuance - Three new stocks were issued last week, with details as follows: - Stock Code: 688785.SH, Stock Name: 恒运昌, Subscription Date: 20260116 - Stock Code: 920050.BJ, Stock Name: 爱舍伦, Subscription Date: 20260112 - Stock Code: 920076.BJ, Stock Name: 国亮新材, Subscription Date: 20260114 [2] Margin Trading Situation - The total margin trading balance in the Shanghai and Shenzhen markets reached 27225.56 billion yuan, with a financing balance of 27054.52 billion yuan and a securities lending balance of 171.04 billion yuan [3] - The margin trading balance increased by 1034.04 billion yuan compared to the previous week [3] - The Shanghai market's margin trading balance was 13731.98 billion yuan, up by 519.85 billion yuan from the previous week, while the Shenzhen market's balance was 13493.58 billion yuan, up by 514.18 billion yuan [3] - A total of 3484 stocks had margin buying, with 424 stocks having buying amounts exceeding 1 billion yuan, led by 中际旭创 (187.63 billion yuan), 蓝色光标 (144.42 billion yuan), and 新易盛 (135.9 billion yuan) [3][4] Fund Issuance - One new fund was issued last week: 中邮睿信增强债券C [5][6] Company Buyback Amounts - Nine companies announced buybacks last week, with the top five by execution amount being: - Stock Code: 301536, Stock Name: 星宸科技 - Stock Code: 603605, Stock Name: 珀莱雅 - Stock Code: 605588, Stock Name: 冠石科技 - Stock Code: 300407, Stock Name: 凯发电气 - Stock Code: 600566, Stock Name: 济川药业 [7] - The highest buyback amounts were concentrated in the electronics, beauty care, and power equipment industries [7]

Summary of Conference Call Records Industry Overview - The telecommunications industry is expected to experience strong growth over the next three years, with leading companies like Zhongji Xuchuang and Xinyi Sheng showing impressive performance, indicating a positive outlook for 2025 [1][3] - The demand for the telecommunications sector is optimistic for 2026 and beyond, driven by overseas wafer factory expansions, GPU upgrades, VR glasses, and public demand [1][5] - The domestic computing power industry chain is set to initiate procurement and bidding for 2026 starting in the second half of 2025, with significant growth expected in the IDC sector [1][6] Key Insights and Arguments - The current GPU power consumption is high, with approximately 1.5GW for one million cards, leading to a total demand of around 5GW when including other devices [1][7] - Internet capital expenditure is expected to continue growing, which will drive demand in the IDC market, potentially leading to a supply-demand imbalance [1][8] - The SDN network is a significant growth area in the network equipment sector, with major internet companies like ByteDance, Alibaba, and Tencent launching their SKAP network frameworks [1][9] Investment Opportunities - Companies with strong performance, such as Xuchuang, Xinyi Sheng, Yuanjie, and Bochuang, are highlighted as key investment opportunities in the optical module sector [1][5] - The optical fiber industry is experiencing price increases, with G657A2 optical fibers in short supply, prompting operators to adjust bidding strategies [1][14] - New technology directions in optics, such as onboard optics, CPO, and NPO, present significant growth potential, with companies like Robertco and Zhichuang Technology being noteworthy [1][15] Market Dynamics - The IDC market is expected to see a significant increase in bidding activity, with a large-scale bidding market anticipated in early 2026 [1][6] - The optical communication sector is projected to be a critical allocation direction due to clear demand forecasts for 2026 and 2027 [1][13] - Second-tier module manufacturers may have opportunities to capture overflow orders, with the 800G and 1.6T market expected to reach 70-80 million units this year [1][17][18] Future Outlook - TSMC's capital expenditure plans for the next three years are significantly higher than expected, indicating a clear industry outlook [1][12] - The upcoming earnings forecasts are expected to alleviate concerns regarding fourth-quarter performance fluctuations and material impacts, leading to a focus on the first quarter and 2027 [1][19]

Group 1: Outdoor Apparel Industry - The outdoor footwear and apparel industry has maintained rapid growth since 2021, with a CAGR of 25.3% for outdoor apparel and 18.4% for outdoor footwear, projected to grow by 24.5% and 16.3% year-on-year in 2025 respectively [24][26] - Online sales of outdoor footwear are growing faster than apparel, with outdoor footwear online sales growth maintaining over 40%, while certain apparel categories like jackets and sun-protective clothing are experiencing slower growth [24][26] - Key outdoor brands such as Kailas and Berghaus are showing strong momentum, while brands like The North Face are underperforming; the market is becoming more diversified with new brands emerging [25][26] Group 2: AI Application in Computing Industry - Major international companies are focusing on AI application in vertical scenarios, with OpenAI and Anthropic launching healthcare-focused AI models, enhancing compliance and professional services [28] - Domestic companies are also advancing in AI applications, with Alibaba upgrading health services and Tencent providing comprehensive support for mini-programs, indicating a strong push towards AI integration [28] - The market for AI applications is expected to see significant growth, with predictions indicating that the GEO market will reach $24 billion globally by 2026, driven by high consumer trust in AI applications in China [30][32] Group 3: Public Utilities Industry - The public utilities sector, including electricity, gas, and water, is characterized by its "essential" nature, with stable long-term growth prospects [32] - The transition to low-carbon energy sources is accelerating, with the share of clean energy consumption expected to reach 28.6% of total energy consumption by 2024, up 2.2 percentage points year-on-year [32][33] - There is a growing trend of overseas funds over-allocating to the public utilities sector, with significant increases in holdings by institutional investors in this industry [33]

Group 1 - On January 16, 2023, a total of 3,762 stocks in the A-share market received financing funds, with 738 stocks having a buy amount exceeding 100 million yuan [1] - The top three stocks by financing buy amount were Zhongji Xuchuang, TBEA, and Xinyisheng, with buy amounts of 3.309 billion yuan, 3.307 billion yuan, and 3.102 billion yuan respectively [1] - Four stocks had financing buy amounts accounting for over 30% of the total transaction amount, with Liaoning Energy, Changyou Technology, and Sichuan Meifeng leading at 35.91%, 33.95%, and 33.03% respectively [1] Group 2 - A total of 76 stocks had a net financing buy amount exceeding 100 million yuan, with China Ping An, TBEA, and Kweichow Moutai ranking the highest with net buys of 1.332 billion yuan, 1.12 billion yuan, and 1.028 billion yuan respectively [1]

Group 1 - On January 16, a total of 3,762 A-shares received financing funds, with 738 stocks having a buying amount exceeding 100 million [1] - The top three stocks by financing buying amount were Zhongji Xuchuang, Tebian Electric Apparatus, and Xinyi Sheng, with amounts of 3.309 billion, 3.307 billion, and 3.102 billion respectively [1] - Four stocks had financing buying amounts accounting for over 30% of the total transaction amount, with LiaoNing Energy, Changyou Technology, and Sichuan Meifeng leading at 35.91%, 33.95%, and 33.03% respectively [1] Group 2 - A total of 76 stocks had a net financing buying amount exceeding 100 million, with China Ping An, Tebian Electric Apparatus, and Kweichow Moutai ranking the highest at 1.332 billion, 1.12 billion, and 1.028 billion respectively [1]

Economic Information - Several smartphone manufacturers, including Xiaomi, OPPO, vivo, and Transsion, have lowered their annual shipment forecasts, with Xiaomi and OPPO reducing by over 20%, vivo by nearly 15%, and Transsion to below 70 million units [2] - Silver prices have surged over 50% in one month and over 150% in six months, impacting the photovoltaic industry, which consumes a significant amount of silver. The cost of raw materials for solar cells has increased by nearly 20% due to rising silver prices [2] - The company Xibei is expected to incur cumulative losses exceeding 600 million yuan from September 2025 to March 2026, leading to the closure of 102 stores, accounting for 30% of its total outlets [2] Company Alerts - Shenghong Technology anticipates a net profit increase of 260%-295% year-on-year for 2025, although Q4 performance fell short of expectations [4] - Cambridge Technology expects a net profit increase of 51%-67% year-on-year for 2025, with Q4 results also below expectations [4] - Multiple companies, including Weimait and Youyan Silicon, have announced plans to reduce their shareholdings by up to 4.98% and 3% respectively [4][11] Overseas Alerts - The three major U.S. stock indices collectively declined last Friday, with the Nasdaq China Golden Dragon Index dropping by 1.15%. Notable declines were seen in Chinese stocks such as Alibaba and JD.com [5] - The European Union is considering imposing tariffs on U.S. goods worth 93 billion euros in response to U.S. tariffs on eight European countries, which could take effect on February 6 if no agreement is reached [5]

Investment Rating - The report recommends a "Buy" rating for key companies in the optical communication sector, specifically highlighting the "Four Little Dragons 3.0" [10]. Core Insights - The investment logic in optical communication is shifting from leading companies to high-resilience, high-barrier, or core-positioned quality targets as the global AI computing competition intensifies [1][19]. - The report emphasizes the importance of companies with clear technological positioning and performance delivery capabilities in the emerging "Four Little Dragons 3.0" [1][19]. Summary by Sections Historical Perspective: Growth Logic of "Four Little Dragons" - In 2019, the report recommended the first generation of "Four Little Dragons" including Taicheng Light, New Yisheng, Tianfu Communication, and Quartz Co. [2][20]. - By the end of 2024, the second generation included Taicheng Light, Dekeli, Yuanjie Technology, and Tengjing Technology, benefiting from AIDC construction and optical module iteration [2][20]. Future Outlook: Rise of "Four Little Dragons 3.0" - The report suggests focusing on the new generation of "Four Little Dragons 3.0": Dongtianwei, Kecuan Technology, Huilv Ecology, and Zhishang Technology, as silicon photonics technology penetration increases [3][21]. - Dongtianwei is positioned in the upstream core components of optical communication, with a complete product matrix and proactive capacity expansion [21]. - Kecuan Technology benefits from the continuous penetration of silicon photonics, having launched its first 400G/800G high-speed optical module production line [21]. - Zhishang Technology is expected to benefit from the implementation of CPO, producing high-density optical connection solutions [22]. - Huilv Ecology is expanding into the high-speed optical module sector through acquisitions, establishing a comprehensive product matrix from 10G to 1.6T [24]. Investment Strategy - The report recommends focusing on companies in the optical communication sector such as Zhongji Xuchuang, New Yisheng, Tianfu Communication, Taicheng Light, and Tengjing Technology, among others [8][13]. - It also highlights the importance of companies involved in copper links, computing equipment, liquid cooling, edge computing platforms, and satellite communication [8][13]. Market Performance - The communication sector has shown strong performance, with the optical communication index rising by 2.6% and the IoT sector outperforming with a 4.8% increase [16][18].