上调目标价至人民币1,650元：全栈光器件供应商受益于更强劲周期

Reiterate Rating:BUY| PO:1,650 CNY| Price:1,180 CNY Raise earnings estimates andPO to CNY1,650 10 June 2026 We raiseour 2026-28E earnings by 16-70% to reflect strong 1.6T demand into 2027 andrising contribution from new solutions. We expect 1.6T/NPO to contribute ~68%/~14% ofInnolight’s revenue in 2027.We lift our PO to CNY1,650 (25x 2027E P/E) from CNY1,100(30x 2H26-1H27E P/E).We lowered our P/E target multiple to reflect the market’s forwardlooking on earnings amidextended lead-time as well as lingering debates around CPO. Wesee market tend to value more on further earnings upside for transceiver makers and more Equity Pluggablesdemand trending stronger Weexpect 1.6T demand to trend even stronger into 2027 and last into 2028, proved byupstream suppliers’extended backlog: (1) Tower Semi’s US$1.3bn contracts for 2027 andlarger commitment for 2028; (2) Lumentum’s capacity fully booked through 2028; and (3)higher supply/demand gap to over 30%. We also see stronger Google TPU volume asanother driver to 1.6T volume, and we expect global 1.6T shipment to reach 20mn/56mn Katherine Zhu>>Research AnalystMerrill Lynch (Hong Kong)kexin.zhu@bofa.com New solutions:NPO visibility improving, CL emerging Robert Cheng>>Research AnalystMerrill Lynch (Taiwan)robert.cheng@bofa.com NPO demand isbecoming increasingly visible in 2027, and we expect more than oneCSP to deploy NPO in its scale-up systems. Based on our analysis, each 5mn-unit NPOorder could generate CNY10bn+ in earnings for Innolight. We are also seeing growingmarket discussions around a 2.4T Coherent-Lite (CL) solution, which could potentially bedeployed by Google. This suggests that high-value Coherent solutions are moving fromscale-across to scale-up architectures. We note that the Coherent optics market remains Doris Kao>>Research AnalystMerrill Lynch (Taiwan)doris.kao@bofa.com This research report provides general information only. No part of this report may beusedor reproduced or quoted in any manner whatsoever in Taiwan by the press or otherpersons without the express written consent of BofA Securities. NPO: near-packaged opticsSiPh: silicon photonicsTPU: tensor processing unit >> Employed by a non-US affiliate of BofAS and is not registered/qualified as a research analystunder the FINRA rules. Refer to "Other Important Disclosures" for information on certain BofA Securities entities that takeresponsibility for the information herein in particular jurisdictions. BofA Securities does and seeks to do business with issuers covered inits researchreports. As a result, investors should be aware that the firm may have a conflict ofinterest that could affect the objectivity of this report. Investors should consider thisreport as only a single factor in making their investment decision.Refer to important disclosures on page 9 to 11. Analyst Certification on page 6. Price iQprofileSMZhongji Innolight (A) Company SectorIT Hardware Company Description Zhongji Innolight, a China-based high-speed opticaltransceiver solution provider, was founded in 2008 andlisted in 2017 (via a reverse takeover). Innolight is now tiedas the largest optical transceiver provider globally. It has acomplete product portfolio for datacenter, 5G, networking Investment Rationale We have a Buy rating on Zhongji Innolight.Innolight, theglobal number-1 optical transceiver supplier, is a keybeneficiary of the AI uptrend, led by (1) rapidly risingvolume/content at transceivers and (2) its strong project Stock Data Price to Book Value18.6x Earnings upgrade, PO to CNY1,650 We raise our 2026-28E earnings by 16-70% to reflect the strong 1.6T demand into 2027and rising contribution from new solutions. We expect 1.6T/NPO to contribute~68%/~14% of Innolight’s revenue in 2027. We lift our PO to CNY1,650 (25x 2027E P/E)from CNY1,100 (30x 2H26-1H27E P/E). We lowered our P/E target multiple to reflectmarket’s forward looking on earnings amid extended lead-time as well as lingeringdebates around CPO. We note Innolight has traded above 27x (+1SD) previously but Pluggables trending stronger, NPO taking offWe expect 1.6T demand to trend even stronger into 2027 and last into 2028, as indicated by upstream suppliers’extended backlog. We expect global 1.6T shipments toreach 20mn/56mn units in 2026/27, while we expect Innolight to maintain over 40% Besides pluggables, NPO demand is becoming increasingly visible into 2027, and weexpect more than one CSP to deploy NPO in its scale-up systems. Based on our analysis,each 5mn-unit NPO order could generate CNY10bn+ in earnings for Innolight, assumingUSD1,000 ASP and similar 30% net margin. We are also seeing increasing marketdiscussion around a 2.4T Coherent-Lite solution, could potentially be deployed byGoogle. This suggests that high-value Coherent solutions are expanding from scale-across to scale-up architectures. We note that the Coherent optics market is largely Exhibit7:We expect 1.6T shipment to remain strong into 2027-28Ewith NPO to tak