2015年第一季度盈利稳健，利润率强劲

Innolight (300308 CH) Solid 1Q25 earnings w/ strong beat on margins Target PriceRMB151.00(Previous TPRMB186.00)Up/Downside86.0%Current PriceRMB81.19 Innolighthasannounced 1Q25 results. Revenue was up 38% YoY and 2% QoQto RMB6.7bn, driven by continuedglobalcloud capex and growing demand for400G/800G optical transceivers. NP was up 57% YoY and 12% QoQ toRMB1.6bn, driven by growth in orders andabetter margin. GPM improved to36.7% (vs. 32.8%/35.1% in 1Q24/4Q24), significantly above BBG consensus of31.9% despite that 1Q GPM was normally lower due to seasonality and priceadjustments. Mgmt. attributedthe1Q25 margin beat to 1)afavourable productmix (greater revenue contribution from 800G), 2) operation optimization,and 3)margin improvements from overseas factories. Maintain BUY on Innolight, asthe company is a key AI beneficiary.We reviseTP to RMB151based on 21.5x2025E P/E (vs. prior 27x),at par with the peers’ averageand reflecting risinggeopolitical uncertainties and lower sector sentiment. China Semiconductors Lily YANG, Ph.D(852) 3916 3716lilyyang@cmbi.com.hk KevinZHANG(852) 3761 8727kevinzhang@cmbi.com.hk Expect solid 400G/800Gdemand from overseas/domestic CSPs in2025;1.6Tshipmentstoacceleratestartingin2Q.Mgmt.remainsconfident in 800Gsales, as overseas customers have largely transitionedfrom400Gto800Gdeployments.While400Gshipmentsdeclinedtemporarily, the company noted a pickup in domestic demand, supported byrising domestic cloud capex, driving a recovery in 400G shipments in thecoming quarters.1.6T contribution was lower than expected in 1Q butisforecasted to grow sequentially, per mgmt.We expect Innolight's revenue toincrease by 47% in FY25 (vs. 123% YoY in FY24), driven bycontinuedcloudspending on AI infrastructure. Jiahao Jiang(852) 39163739JiangJiahao@cmbi.com.hk We project the company's GPM tostayat around 35%-36% in FY25/26E,driven by continued800G shipments,1.6T ramp-up, and annual priceadjustments.The company's 1Q GPM was up 1.6ppt QoQ (vs.-3.2ppt/-2.6ppt for 1Q23/1Q24) and beat our estimate by 4.8ppt.We forecast itsFY25GPM to be 35.3%. Tariff risks mitigated by offshore capacity.Mgmt. noted minimal tariffexposure with all shipments now coming from its 70k sqm Thailand facility,which manufactures high-end 400G/800G products and benefits from zero-tariff treatment under the current trade rules.However, wemaintain acautious stance in light of ongoing geopolitical uncertainty. MaintainBUYwithTPadjustedtoRMB151.WebelieveInnolight'sfundamentals are intact, with revenue/NP revised up slightly by 3%/1% forFY25.ThecompanyremainsakeybeneficiaryofAIinfrastructureinvestment and enjoys growth potential from both overseas and domesticcloud capex. New TP is based on 21.5x 2025E P/E (vs. prior 27x), which ispeers avg. The company's stock is currently trading at 11.4x 2025E P/E,which is lower than 1SD-below historical 5-years avg. of 12.8x,undemandingin our view.Risks:1)future tariff uncertainty that may affect the company’soperations;2) risingraw material costs, and 3) slower-than-expected ramp-up speed. Source: FactSet Source:Bloomberg, CMBIGM estimates Source:Bloomberg, CMBIGM estimates Disclosures& Disclaimers Analyst CertificationThe research analyst who is primary responsible for the content of this research report, in whole or in part, certifies that with respect to the securities or issuerthat the analyst covered in this report: (1) all of the views expressed accurately reflect his or her personal views about the subject securities or issuer; and (2)no part of his or her compensation was, is, or will be, directly or indirectly, related to the specific views expressed by that analyst in this report.Besides, the analyst confirms that neither the analyst nor his/her associates (as defined in the code of conduct issued by The Hong Kong Securities and Futures Commission) (1) have dealt in or traded in the stock(s) covered in this research report within 30 calendar days prior to thedate of issue of this report; (2) willdeal in or trade in the stock(s) covered in this research report 3 business days after the date of issue of this report; (3)serve as an officer of any of the HongKong listed companies covered in this report; and (4) have any financial interests in the Hong Kong listed companies covered in this report. CMBIGM RatingsBUY : Stock with potential return of over 15% over next 12 monthsHOLD: Stock with potential return of +15% to-10% over next 12 monthsSELL: Stock with potential loss ofover 10% over next 12 monthsNOT RATED: Stock is not rated byCMBIGM :Industry expected to outperform the relevant broad market benchmark over next 12 months:Industry expected to perform in-linewith the relevant broad market benchmark over next 12 months:Industry expected to underperform the relevant broad market benchmark over next 12 monthsGlobal MarketsLimited Address: 45/F, Champion Tower,3 Garden Road, Hong Kong, Tel: (852) 3900 0888Fax: (852) 3900 0800CMB InternationalGlobal MarketsLimited (“CMBI