Solid 3Q with intact near-term prospects; Maintain BUY

（以下内容从招银国际《Solid 3Q with intact near-term prospects; Maintain BUY》研报附件原文摘录）
中际旭创(300308)
Innolight released its3Q results.Revenue went up by115.2%YoY/9.4%QoQ,while net profit went up by104.4%YoY/3.3%QoQ,in-line with our expectations.Mgmt.attributed the slower sequential revenue growth(9.4%in3Q24vs.31.3%/23%in1Q/2Q24)to two main factors:1)supply chain bottlenecks of keycomponents(like DSPs&EMLs),and2)unfavorable fluctuations in the USD/RMBexchange rate during3Q.Excluding the impact of exchange rate movements,thecompany still achieved double-digit revenue growth in3Q.GPM remained steadyat33.3%in3Q24(vs.33.4%/33.5%in2Q24/3Q23),while NPM was21.4%(vs.22.7%/22.5%in2Q24/3Q23).We remain confident in the company’s growthtrajectory,driven by the ramp-up in400G/800G shipments and the upcomingproduction ramp-up of1.6T products.Maintain BUY,with an adjusted TP ofRMB186,reflecting26.9x rollover2025E P/E(previously30x2024E P/E).
Sequential slowdown due to exchange rate and supply chain issues:The company highlighted that3Q performance was negatively impacted byunfavourable USD/RMB exchange rate fluctuations.Excluding this impact(~RMB100mn),the company still posted double-digit sequential growth,continuing the strong growth momentum seen in previous quarters.Additionally,supply chain challenges related to key components constrainedshipment growth,with mgmt.noting that order growth outpaced shipmentgrowth,contributing to the slower-than-expected sequential revenueincrease.
Demand intact,400G/800G shipments to ramp through4Q24:Mgmt.reiterated strong demand for the company’s high-speed optical products,particularly400G&800G,which remain key growth drivers.Looking aheadto2025,the company expects faster adoption of800G products compared to400G as customers progress towards newer tech.Additionally,massshipments of1.6T products will begin in the coming months.Mgmt.emphasized strong demand from overseas hyperscalers,which contributedto over half of the company's400G/800G orders in2024..
Price increases in the optical supply chain driven by AI demand:Therecent announcement(link)by Marvell(MRVL US,NR)of price hikes acrossits entire product line due to sustained AI-driven demand could lead to higherraw material costs for Innolight.However,we believe the company is well-positioned to mitigate these impacts by passing on price increases to itscustomers,given the strong demand for its products that gives company thebargaining power.
Maintain BUY,with TP adjusted to RMB186,corresponding to rollover26.9x2025E P/E,the same as its5-year historical avg.The stock iscurrently trading at22.5x2025E P/E.Risks:1)China-US trade tensions,2)rising raw material costs,and3)weaker-than-expected ramp-up speed.