中际旭创（300308）：Stronger into 2026 on 1.6T ramp and SiPh mix

中际旭创(300308) 　　Innolight delivered strong FY25 earnings, with revenue up 60% YoY toRMB38.2bn, in line with our estimate and Bloomberg consensus, while net profitrose 109% YoY to RMB10.8bn, 1.4% below our forecast but broadly in line withconsensus. GPM improved sharply to 42.6% from 34.7% in FY24, driven bycontinued strength in high-speed optical module shipments and higher SiPhmix. Momentum accelerated further in 4Q25, with revenue up 102% YoY and30% QoQ, while GPM expanded to 44.5% from 42.8% in 3Q25. We continue toview Innolight as a key domestic AI beneficiary, supported by improving supplychain readiness, clear leadership in pluggable modules, and further marginupside from deeper SiPh penetration. Maintain BUY, with TP unchanged atRMB707, based on 28x 2026E P/E. 　　Capacity expanded by 34% YoY in FY25, while shipments grew 45%,highlighting robust demand and solid ramp execution. Utilizationimproved from 74% in FY24 to 85% in FY25, while overseas salesaccounted for 92% of revenue and 86% of total shipments. Looking aheadin FY26E, we expect 800G to remain the primary shipment driver, while 1.6Tshould increasingly emerge as the key revenue and GPM growth driver,supported by higher SiPh penetration and a more favorable mix. Mgmt. alsoindicated it has strengthened supply assurance for key materials throughtighter agreements with core suppliers, higher strategic inventory, andbroader vendor qualification, which we believe should improve deliveryvisibility and support growth into FY26–27. 　　Looking beyond the current ramp, we believe the Company’s productroadmap remains one of the strongest in the sector. Mgmt. sees 800Gand 1.6T as the core demand pillars in FY26, with 1.6T likely to scale muchfaster as adoption broadens across CSPs and AI infrastructure customers.At the same time, the Company is positioning for the next phase of opticalinterconnect demand across scale-up and scale-cross networks, whilecontinuing to advance its 3.2T roadmap across multiple technology paths,including EML-based and SiPh-based solutions. We expect 3.2Tpluggable modules to begin to contribute revenue in FY28E. 　　Maintain BUY, with TP unchanged at RMB707, based on the same 28x2026E P/E. We remain positive on the Company’s earnings outlook, drivenby sustained 800G volume growth, rising 1.6T contribution, and furthermargin upside from deeper SiPh penetration. We lift our FY27E sales/netprofit forecast by 8%/12% as the Company continues to scale capacity tomeet robust demand on top of enhancing cost controls.