Driven by the continuous increase in demand for large model training and reasoning, the network bandwidth of data center is constantly upgraded, and optical interconnection, as the "expressway" of computing power system, is leaping from traditional communication facilities to one of the core tracks with the highest growth certainty in AI infrastructure.
According to the wind-chasing trading desk, Citi's latest report predicts that,The global optical interconnect market size will grow from approximately US$22 billion in 2025 to US$92 billion in 2028, representing a three-year compound growth rate of 65%。 Growth drivers have switched from traditional flow cycles toDual Resonance of AI Computing Power Cluster Expansion and Penetration Improvement of High-rate Optical ModulesThe industry is shifting from "cyclical fluctuation" to "structural expansion".
XinyishengIs one of the most concerned targets in Citi's current round of upward adjustment,The target price was sharply raised to 701 yuan from 353.57 yuan, nearly doubling。 The core logic is that the market is currently mainly priced at the short-term prosperity of 800G and 1.6T, while there is still a significant expected difference in the long-term growth of 3.2T product volume and commercialization of NPO light engine, and the continuous upgrading of product structure is expected to further enlarge profit elasticity.
Tianfu CommunicationsIt is also favored by Citi, and the target price is raised by about 32% to 419 yuan. The core logic lies in the fact that under the background of the large-scale implementation of CPO (co-packaged optics) scheme, the company's advantages in key devices such as light engine and FAU will be gradually realized.
3.2T takeover, NPO landing, optical interconnection three-year CAGR as high as 65%
Citi's report predicts that from 2025 to 2028, global optical interconnect shipments will increase from 110 million to 300 million, with a compound annual growth rate of 40%; The market size jumped from $22 billion to $92 billion, with a compound annual growth rate of 65%. The difference in volume and price growth rate stems from the upgrading of product structure — —The proportion of high-speed optical modules continues to increase, raising the overall average selling price. The industry is completely getting rid of the competition mode of relying on price reduction to grab share in the past communication equipment market.Data centers have become the main body of absolute demand, and the proportion of optical module shipments will increase from 71% to 89% within three years. The bandwidth upgrade of AI computing power cluster is the core driving force. The penetration rate of high-speed products of 800G and above in the field of data communication has soared from 37% to 89%, and the exit of low-speed modules has accelerated.
In terms of rate, 1.6T module will usher in heavy volume in 2027, with a three-year compound growth rate of 215%;Shipments of 3.2T modules started in 2027 and climbed rapidly the following year, taking over as the main growth force in the next round。 In the meantime,The new CPO/NPO packaging scheme will also be implemented on a large scale from 2027Where the NPO scheme accurately matchesGoogle、NVIDIAAnd other vendors' horizontal computing power cluster architecture.
The upstream optical chip link benefits simultaneously. The penetration rate of silicon photonic technology will increase from 29% to 60%, driving the rapid growth of demand for EML and CW laser chips. With its technical barriers and scarcity of production capacity, optical chips have become the most certain beneficiary link in the industrial chain. On the whole,The optical interconnection industry is leaping from communication supporting facilities to computing infrastructure. In the next three years, the path of volume and price expansion will be clear, and the first-mover advantage of head enterprises is expected to continue to expand.
Xinyisheng Valuation Revaluation Core: 3.2T + NPO Double Growth Curve Fulfilled
Citi sharply raised the target price of Xinyisheng to 701 yuan this time, nearly doubling the current share price.The core logic is that the market has only priced the short-term prosperity dividends of 800G and 1.6T at present, while the long-term increments such as 3.2T batch delivery and NPO light engine landing have not been fully accounted for。 Global customer barriers and industry-leading profitability provide the underlying support for the valuation rise.In terms of earnings forecast, Citi raised its net profit forecast for 2026 and 2027 by 8% and 13%, respectively.The increase was mainly attributable to the shipment of 3.2T products and the gradual fulfillment of NPO light engine orders。 In 2028, the net profit will further reach 65.828 billion yuan, with a three-year compound growth rate of 190%. The scale effect and product structure upgrade are continuously driving the gross profit expansion.
In terms of gross profit margin, the company is expected to remain at a high level of 52.9%, 53.9% and 54.0% from 2026 to 2028, which is about 10 percentage points higher than that of peers. Citi believes that this is due to its excellent cost control capabilities and deep binding with overseas head cloud vendors, which constitutes a moat that is difficult to replicate.
At the valuation level, the target price of 701 yuan corresponds to 20 times 2027 dynamic PE, which is 0.5 standard deviation below the company's five-year historical average. Citi believes,With the continuation of the prosperity of 800G and 1.6T, and the high certainty of the forward cash flow of 3.2T and NPO, the company should enjoy a growth premium higher than that of traditional communication enterprises.
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