Faster volume ramp-up of 800G/1.6T optical modules; Goldman Sachs maintains Buy rating on Eoptolink

Overview

This report is a company update by Goldman Sachs on Eoptolink (300502.SZ). The key catalyst is the company's disclosed 1H26 net profit guidance of Rmb7bn to Rmb9bn, implying 2Q26 net profit of Rmb4.2bn to Rmb6.2bn and yoy growth of 78% to 163%, with the guidance midpoint 44% above Goldman Sachs' previous forecast. Goldman Sachs attributes the better-than-expected performance to demand growth driven by AI capex, product mix upgrades toward 800G/1.6T high-speed optical modules, improved optical chip supply, and capacity expansion.

Core views

Goldman Sachs maintains its Buy rating and believes 800G/1.6T optical modules have entered an accelerated ramp-up phase. As optical chip supply improves and the company expands capacity, 800G/1.6T optical modules will drive quarter-on-quarter revenue growth; contribution from 1.6T modules and silicon photonics products is expected to continue increasing in 2H26E. Although industry optical chip supply remains tight in the short term, rising silicon photonics penetration and industry capacity expansion are expected to support subsequent shipments.

Analysis framework

The report uses earnings guidance updates, revisions to revenue and profit forecasts, analysis of product mix changes, and a relative valuation approach. Goldman Sachs incorporates 2Q26E guidance into its model, raises 2026-2028E revenue, gross profit, operating profit, and net profit forecasts, and derives the 12-month target price using near-term 2027E P/E valuation.

Methodology notes

• Valuation methodsNear-term P/E valuation

  The target P/E is based on the relationship between peers' trading P/E multiples and future fundamental indicators, combined with the company's 2027-2028E net profit growth and operating margin.

  Goldman Sachs uses a target 2027E P/E of 29.3x to derive a 12-month target price of Rmb633.0, up from the previous target price of Rmb600.71; this multiple is close to the company's historical average forward P/E of about 28x since September 2018.

• Factor analysisGS Factor Profile

  Compares a stock's position relative to the market and industry peers based on growth, financial returns, valuation multiples, and composite factors.

  The growth factor references forward revenue, EBITDA, and EPS growth; the financial return factor references ROE, ROCE, and CROCI; the multiple factor references P/E, P/B, EV/EBITDA, etc.; and the composite factor is a combination of growth, financial returns, and low valuation.

Asset mapping & comparison

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

• Eoptolink (300502.SZ)

  Covered stock in the report, rated Buy

  Strengths

  Volume ramp-up of 800G/1.6T optical modules, driven by AI demand, improved chip supply, capacity expansion, and relatively high margin forecasts.

  Weaknesses

  Short-term optical chip supply remains tight, and performance is highly dependent on the shipment pace of high-speed optical modules.

  Comparison

  The target P/E of 29.3x is broadly in line with the company's historical average forward P/E of about 28x since September 2018.

  Risks

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

Key data

• 1H26 net profit guidanceRmb7bn-Rmb9bnCompany announcement, implying 2Q26 net profit of Rmb4.2bn-Rmb6.2bn.
• 2Q26 net profit yoy growth78%-163%Calculated based on the company's guidance range.
• 2Q26 net profit guidance midpoint vs. previous forecast+44%Goldman Sachs said the guidance midpoint was 44% above its previous forecast.
• 2026E/2027E/2028E net profit forecastRmb20,683mn / Rmb30,080mn / Rmb34,576mnRevised forecast.
• 2026E/2027E/2028E revenue forecastRmb51,457mn / Rmb73,911mn / Rmb84,975mnRevised forecast.
• Magnitude of earnings forecast revisions2026E +7%; 2027E +2%; 2028E +2%Mainly driven by upward revisions to 800G/1.6T optical module revenue.
• Target P/E29.3x 2027E P/EPreviously 28.4x.
• 12-month target priceRmb633.0Previous target price Rmb600.71.

Impact & implications

The report is positive for Eoptolink: 2Q26 earnings guidance validates demand for high-speed optical modules and product mix upgrades, while upward earnings revisions strengthen valuation support. For the optical module supply chain, AI capex, 800G+ demand, 1.6T upgrades, and rising silicon photonics penetration remain the core variables to track; if supply chain bottlenecks ease and capacity expansion materializes, leading optical module manufacturers may continue to benefit.

Risks

• The ramp-up of 800G optical modules is slower than expected.
• Geopolitical issues may affect the optical transceiver supply chain.
• Competition may be more intense than expected, potentially leading to price erosion and lower margins.
• Short-term tight supply in the optical chip industry may constrain shipment pace.

What to watch

• Changes in 2H26E shipments and revenue mix of 800G/1.6T optical modules.
• Whether contribution from 1.6T modules and silicon photonics products continues to rise.
• Progress in optical chip supply improvement and industry capacity expansion.
• The intensity of AI capex and the sustainability of customer demand for 800G+ products.
• Whether expansion from scale-out to scale-up/scale-across demand in 2027E materializes.