The company's quarterly report shows steady operations, waiting for changes in demand.

The company released its Q1 2024 report, achieving revenue of 220 million yuan, a year-on-year increase of 17.5%, but a quarter-on-quarter decline of 14.7%. The net profit attributable to the parent company was 31.75 million yuan, a year-on-year increase of 10.8%, but a quarter-on-quarter decline of 36.8%. Overall performance met expectations, but there has not yet been a clear turning point in the quarter-on-quarter results, and the market is waiting for changes in artificial intelligence demand.

From the first quarter situation, both revenue and profit achieved year-on-year growth, but did not show the trend of leading optical module manufacturers on a quarter-on-quarter basis. This may be related to the relatively lagging pace of fiber optic connector-related products, and is also affected by the purchasing pace of major overseas customers and the progress of new customer products. With the tightening of upstream components, the company's MT plug-type products and MPO-type products are expected to benefit. Combined with the increase in capital expenditure by leading overseas cloud manufacturers, the overall demand is expected to be released, and the company's subsequent order revenue may see changes.

The company has been布局 in the optical communication field for many years. Based on ceramic inserts, PLC wafers, and chips, it has developed high-density optical fiber connectors, conventional optical fiber connectors, wavelength division multiplexers, PLC optical splitters, integrated functional modules, and other optical passive products, and has gradually expanded into optical active products such as optical modules, AOC, and DAC. Based on FBG technology, the company has also developed a series of sensors and monitoring systems suitable for various bridge engineering application scenarios. The company’s product category expansion is progressing well, with downstream application fields continuously expanding, laying a foundation for future growth.

With the development of artificial intelligence, the demand level and market space for optical connections have increased with communication upgrades. The company offers a rich variety of optical interconnection products, with outstanding technical indicators and high product yield stability, earning a good reputation in the North American market. Driven by artificial intelligence, overseas technology companies are increasingly making investments, and the demand from the company's traditional major clients overseas is expected to continue growing, with potential new customer progress possibly accelerating.

The company's performance in 2023 was relatively flat, mainly due to the unfulfilled demand for artificial intelligence, while traditional cloud computing experienced a certain degree of adjustment influenced by customer changes. As we enter 2024, with overseas tech giants ramping up investments in artificial intelligence, demand related to optical connectivity is expected to be definitively released. The company's net profit attributable to the parent company for 2024-2026 is expected to be 250 million yuan, 330 million yuan, and 400 million yuan, respectively.

Risks to be aware of include the failure of new product expansion to meet expectations and intensified market competition.