Optical stocks rose in Hong Kong market. CIG up nearly 5%; ZJ Innolight, Xizhi Tech up over 3%; YOFC, CreaLights up over 2%.
On the news front, Guotai Haitong Securities significantly raised its earnings forecast and target price for CIG to 424 yuan, maintaining an Overweight rating, citing that the rapid increase in high-speed product mix will drive substantial profit growth. The broker projects attributable net profits of 1.836/10.407/16.303 billion yuan for the next three fiscal years, assigning a 15x multiple and lifting the target from 112.84 yuan.
The upgrade is underpinned by strong first-half results: CIG posted revenue of 2.705 billion yuan, up 32.92% year-over-year, with attributable net profit surging 171.08% to 328 million yuan. Gross margin improvement was primarily driven by a higher revenue contribution from 800G optical modules. The company disclosed that 800G products have completed certification with multiple major customers and entered batch shipment, while 1.6T modules are expected to enter mass production in the second half, and 3.2T development is progressing on schedule.
