EOPTOLINK(300502) 高盛·2025-04-24 01:55Investment Rating - The report maintains a "Buy" rating for Eoptolink, with a revised 12-month target price of Rmb123, indicating a potential upside of 51.5% from the current price of Rmb81.2 [9][17]. Core Insights - Eoptolink's revenue for 1Q25 reached Rmb4.05 billion, representing a 264% year-over-year increase and a 15% quarter-over-quarter increase, which aligns closely with Goldman Sachs' estimate of Rmb3.99 billion. The net profit of Rmb1.57 billion exceeded estimates by 11%, driven by strong margin expansion with a gross margin of 48.7% [1][2]. - The company is well-positioned to benefit from the ramp-up of 400G and 800G optical transceivers, particularly in AI infrastructure, which is expected to be a primary earnings driver in 2025 [15]. - Eoptolink's net profit has converged with that of its larger peer, Innolight, despite having a market capitalization that is only 65% of Innolight's, suggesting a potential narrowing of the valuation gap due to Eoptolink's strong profitability and growth momentum [1][12]. Summary by Sections Revenue and Profitability - Eoptolink's revenue growth has been robust, with sequential increases of 49%, 46%, and 15% quarter-over-quarter in 3Q24, 4Q24, and 1Q25, respectively. The company is expected to achieve a net profit of Rmb6.4 billion in 2025, reflecting a year-over-year growth of 126% [2][9]. - The gross margin has shown significant improvement, reaching 48.7% in 1Q25, which is well above peer levels, attributed to better cost efficiency and the ramp of 800G products [2][6]. Estimate Revisions - Revenue estimates for 2025-2027 have been revised upward by up to 10%, and net profit estimates have been increased by up to 40% due to the reversal of negative pricing impacts from tariffs and stronger-than-expected margin performance [8][9]. - The new revenue estimates for 2025E are Rmb17.12 billion, with a gross margin projected at 48.8% [10][17]. Market Position and Valuation - Eoptolink is trading near its historical trough level P/E, which is considered attractive given the expected growth and profitability [15]. - The report highlights that the stock's valuation is set in line with the company's trough level P/E during 2021-2025, reflecting uncertainties in the tariff and demand outlook [9][15].