Goldman Sachs maintains Buy on Eoptolink as volume growth in 800G/1.6T optical modules drives upward earnings revisions

Overview

Goldman Sachs published a company update on Eoptolink (300502.SZ), focusing on the accelerating ramp-up of 800G/1.6T high-speed optical modules and better-than-expected 2Q26 net profit guidance. The company guided 1H26 net profit at Rmb7bn to Rmb9bn, implying 2Q26 net profit of Rmb4.2bn to Rmb6.2bn, up 78% to 163% YoY. The report believes that rising AI capex, improved optical chip supply, company capacity expansion, and product mix upgrades together support revenue and profit growth.

Core views

Goldman Sachs' core view is that Eoptolink will benefit from growing demand for 800G and 1.6T optical modules, with contribution from 800G+ products, 1.6T modules, and silicon photonics products continuing to increase in 2H26E; starting from 2027E, demand is expected to expand from scale-out to scale-up/scale-across scenarios. Based on higher revenue and earnings assumptions, Goldman Sachs maintains a Buy rating and raises the target price to Rmb633.

Analysis framework

The report uses the company's 2Q26 net profit guidance, product shipment cadence, improved optical chip supply, capacity expansion, and product mix upgrades in high-speed optical modules as the basis for revising earnings forecasts; on valuation, it uses a near-term 2027E P/E approach and references the relationship between peer trading P/E multiples and forward fundamentals.

Methodology notes

• Valuation methodsNear-term P/E valuation method

  2027E target P/E

  Goldman Sachs uses a target 2027E P/E of 29.3x to derive a 12-month target price of Rmb633.0; this multiple is raised from the previous 28.4x and is broadly in line with Eoptolink's historical average forward P/E of about 28x since September 2018.

• Fundamental analysisEarnings forecast revision

  Upward revisions to revenue, margin, and net profit forecasts

  The report raises 2026-2028E earnings forecasts by 7%/2%/2%, mainly reflecting increased shipments of 800G/1.6T optical modules, improved optical chip supply, and capacity expansion.

• Factor frameworkGS Factor Profile

  Growth, financial returns, valuation multiples, and composite percentile

  Goldman Sachs' factor profile compares growth, financial returns, valuation multiples, and composite metrics against the market and industry peers to provide investment context for the stock; this framework is a disclosure-oriented methodological explanation, not the sole basis for the target price in this report.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Eoptolink (300502.SZ) stock

  Directly covered by the report

  Strengths

  Accelerating ramp-up of 800G/1.6T optical modules, strong AI capex demand, improved optical chip supply, and capacity expansion supporting shipments.

  Weaknesses

  Industry optical chip supply remains tight in the short term, and growth is highly dependent on the shipment pace of high-speed optical modules.

  Comparison

  The target P/E of 29.3x is close to the company's historical average forward P/E of about 28x since September 2018; the rating is given relative to Goldman Sachs' coverage universe.

  Risks

  Slower-than-expected 800G ramp-up, geopolitical impacts on the supply chain, intensified competition leading to price erosion and lower margins.

Key data

• 1H26 net profit guidanceRmb7bn-Rmb9bnCompany-announced guidance.
• Implied 2Q26 net profitRmb4.2bn-Rmb6.2bnImplies YoY growth of 78%-163%.
• Extent of 2Q26 net profit midpoint beat44%Versus Goldman Sachs' previous forecast.
• 2026E revenue forecastRmb51,457mRaised 6% from the previous forecast of Rmb48,395m.
• 2026E net profit forecastRmb20,683mRaised 7% from the previous forecast of Rmb19,308m.
• 2027E net profit forecastRmb30,080mRaised 2% versus the previous forecast.
• 2028E net profit forecastRmb34,576mRaised 2% versus the previous forecast.
• 2027E target P/E29.3xUsed to derive the 12-month target price.
• 12-month target priceRmb633.0Previously Rmb600.71.
• Current share priceRmb482.88As of the close on July 17, 2026.
• Upside31.1%Based on target price versus current price.

Impact & implications

If the report's view plays out, Eoptolink's investment thesis will extend from a short-term 2Q26 earnings beat to higher value contribution from high-speed optical modules in 2H26E and broader AI network architecture upgrade demand in 2027E. The upward earnings revision and target price increase reinforce the positive outlook, but valuation already significantly depends on the sustainability of high growth and improving industry supply-demand conditions.

Risks

• The ramp-up of 800G optical modules is slower than expected.
• Geopolitical issues may affect the optical transceiver supply chain.
• Stronger-than-expected competition may lead to price erosion and margin compression.
• Industry optical chip supply remains tight in the short term, and if improvement falls short of expectations, shipments may be affected.

What to watch

• Whether revenue contribution from 800G+ optical modules, 1.6T modules, and silicon photonics products continues to increase in 2H26E.
• Progress in improved optical chip supply and industry capacity expansion.
• Whether AI capex growth can continue translating into customer orders for high-speed optical modules.
• How demand expansion from scale-out to scale-up/scale-across in 2027E materializes.
• Whether gross margin, operating margin, and net margin can remain at the high levels projected in the report.