Optical communication demand remains strong; Nomura reiterates Buy on Accelink and raises its target price to CNY217.5

Overview

This report reviews Accelink's 1H26 and 2Q26 results and assesses the boost to optical communication product demand from investment in AI data centers in China. Nomura believes the company's business momentum remains intact and that proactive component inventory building may be preparation for faster growth in 2H26F. It therefore raises its FY26-28F forecasts and target price while reiterating its Buy rating.

Core views

Accelink's 1H26 revenue and earnings increased 26.1% and 56.3% y-y, respectively, with net profit reaching CNY582mn, at the midpoint of the company's earnings guidance range of CNY558.6mn to CNY615.0mn. 2Q26 revenue and earnings increased approximately 27% and 54% y-y, respectively, and 38.3% and 42.6% q-q. Nomura primarily attributes the growth to strong demand for high-end optical transceiver modules and optical components from the AI data center market. The company's overall gross margin in 1H26 increased 3.0ppt y-y to 25.5%; its 2Q26 gross margin increased 4.3ppt y-y to 24.6% but declined 2.3ppt q-q, which the report attributes mainly to higher raw material procurement costs. By business segment, 1H26 Transmission business revenue increased 50.5% y-y, with gross margin rising 0.45ppt y-y to 28.83%; Access & Data business revenue increased 16.0% y-y, with gross margin rising 3.61ppt y-y, which Nomura believes may reflect a greater contribution from high-end optical transceiver modules. As an integrated solution provider for China's data communications and telecommunications markets, the company has a product portfolio that includes OCS optical circuit switches, NPO near-packaged optics, and XPO ultra-high-density pluggable optics. The report believes this positioning will help the company participate in technological upgrades across scale-out, scale-up, and scale-across networks. Nomura forecasts FY26-28F revenue CAGRs of 45% for the Access & Data business and 58% for the optical transceiver business; by FY28F, optical transceivers may account for 66% of total revenue. 1H26 recorded a cash outflow of CNY1.24bn, representing a 1051.8% y-y decline, which the report mainly attributes to increased component inventory. Nomura believes this proactive inventory building may support faster growth in 2H26F. Based on Chinese cloud service providers' active development of AI infrastructure and stronger demand for data center optical modules, Nomura raises its FY26-28F revenue forecasts by 4-13% and earnings forecasts by 3-18%, while slightly raising its gross margin forecasts by 0.0-0.4ppt to reflect a greater contribution from higher-margin products such as 800G and 1.6T. Specifically, it raises its Access & Data business revenue forecasts by 5-15% and China market revenue forecasts by 4-35%. Nomura's revised FY26-28F revenue forecasts are 4-20% above WIND consensus, while its earnings forecasts are 6-34% higher, reflecting its more positive view on data center and telecommunications market demand growth over the next two years. The report reiterates its Buy rating and raises its target price from CNY158.5 to CNY217.5. The new target price is based on FY27F EPS of CNY3.45 and a P/E multiple of 63x, versus 52x previously; the 63x valuation matches Nomura's forecast FY26-28F earnings CAGR of 63%. The report states that the stock was then trading at approximately 51.5x FY27F earnings, with the CNY217.5 target price implying 22.3% potential upside from the CNY177.88 closing price. Regarding ESG, the report notes that the company, as a leading optical component manufacturer, provides infrastructure products for telecommunications networks and data centers. The land, equipment, and other materials required for telecommunications equipment manufacturing may have environmental impacts, while factory automation may help reduce these impacts; corporate governance, particularly shareholder returns, still requires improvement.

Analysis framework

Nomura first compares 1H26 net profit with the company's earnings guidance and breaks down 2Q26 y-y and q-q performance and changes in gross margin. It then analyzes revenue, product mix, and profitability by the Transmission and Access & Data businesses before revising its business-segment and regional forecasts based on inventory, AI infrastructure investment, and demand for high-end optical modules. Finally, the report compares its forecasts with WIND consensus and derives its target price using FY27F EPS and a P/E multiple.

Methodology notes

• Valuation methodP/E and PEG valuation

  Forward EPS-based P/E valuation

  The report derives its CNY217.5 target price by applying a 63x P/E multiple to FY27F EPS of CNY3.45 and supports this valuation multiple with a forecast FY26-28F earnings CAGR of 63%.

• Company fundamentals and financial framework

  Earnings forecast revisions by business segment and region

  The report separately adjusts its assumptions for the Access & Data business, China market revenue, and overall gross margin, then aggregates them into its FY26-28F revenue and earnings forecasts and compares them with WIND consensus.

Asset mapping & comparison

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

• Accelink Technologies (002281 CH)

  The report views the company as a potential beneficiary of China's AI data center optical communication value chain, with demand for high-end optical modules and network technology upgrades driving revenue and earnings growth.

  Strengths

  A leading Chinese supplier of optical transceiver modules and optical communication equipment, with products spanning OCS, NPO, and XPO; strong Transmission business growth and a rising share of high-end products are driving gross margin improvement.

  Weaknesses

  Higher raw material procurement costs caused 2Q26 gross margin to decline q-q, manufacturing activities have environmental impacts, and corporate governance areas such as shareholder returns still require improvement.

  Comparison

  Nomura's FY26-28F revenue and earnings forecasts are 4-20% and 6-34% above WIND consensus, respectively.

  Risks

  Weaker-than-expected demand, delays in optical chip R&D, price competition and margin dilution, and escalating technology sanctions or geopolitical risks.

Key data

• 1H26 revenue growth+26.1% y-yDriven primarily by demand for high-end optical transceiver modules and optical components.
• 1H26 earnings growth+56.3% y-yNet profit was CNY582mn, at the midpoint of the earnings guidance range.
• 2Q26 revenue and earnings growth+27%/+54% y-yIncreased 38.3% and 42.6% q-q, respectively.
• 1H26 overall gross margin25.5%Increased 3.0ppt y-y.
• 2Q26 overall gross margin24.6%Increased 4.3ppt y-y and declined 2.3ppt q-q.
• 1H26 Transmission business revenue growth+50.5% y-yGross margin increased 0.45ppt y-y to 28.83%.
• 1H26 Access & Data business revenue growth+16.0% y-yGross margin increased 3.61ppt y-y.
• 1H26 cash outflowCNY1.24bnDeclined 1051.8% y-y, mainly due to increased component inventory.
• FY26-28F revenue and earnings forecast revisions+4-13%/+3-18%Reflecting stronger demand for optical communication products and a greater contribution from high-end products.
• FY26-28F business revenue CAGRAccess & Data 45%; optical transceivers 58%Optical transceivers are expected to account for 66% of total revenue in FY28F.
• Relative to WIND consensusRevenue 4-20% higher; earnings 6-34% higherNomura is more positive on data center and telecommunications demand over the next two years.
• Target price valuationCNY217.5Based on 63x FY27F EPS of CNY3.45; the previous valuation multiple was 52x.

Impact & implications

The report believes that accelerated AI infrastructure investment by Chinese cloud service providers will continue to support demand for high-end optical modules and optical components. Accelink's relatively comprehensive product portfolio, proactive inventory building, and rising share of high-end products position it to capture this growth. Accordingly, Nomura raises its revenue, profit, and valuation assumptions, although raw material costs, competition, and R&D progress could still affect the realization of growth.

Risks

• Demand for optical components and optical modules in the data communications and telecommunications markets may be lower than expected.
• Optical chip R&D progress may be slower than expected.
• Price competition may exceed expectations and dilute margins.
• Worsening technology industry sanctions or escalating geopolitical risks may affect the business.