Goldman Sachs has comprehensively raised its profit forecasts for 2026 through 2028 and increased its 12-month price target for Eoptolink following the company's latest first-half net profit estimate.
Based on the disclosed first-half 2026 net profit guidance, the investment bank has significantly upgraded its earnings projections for the coming years and lifted its target price for the stock.
Strong Q2 Profit Exceeds Expectations: AI Capex Drives Demand Surge
Eoptolink Technology Inc.,Ltd. (ASX: 300502) disclosed a net profit forecast range of 7 to 8 billion yuan for the first half of 2026. Combined with the already reported Q1 2026 net profit of 2.774 billion yuan, this implies a Q2 net profit range of 4.2 to 6.2 billion yuan, representing a year-on-year increase of 78% to 163%.
Goldman Sachs identified two core drivers for the earnings beat: first, the continued expansion of AI capital expenditure fueling robust demand for high-speed optical modules; second, the company's ongoing product mix upgrade towards these high-speed modules, coupled with improved optical chip supply and capacity expansion, driving sequential acceleration in revenue and profit.
Looking at the quarterly profit cadence, Goldman forecasts diluted earnings per share for 2026 to be 1.99 yuan in Q1, 3.34 yuan in Q2, 4.56 yuan in Q3, and 4.96 yuan in Q4, indicating a pattern of accelerating growth throughout the year.
Accelerating Ramp of 800G/1.6T Modules: Contribution to Increase in Second Half
The bank attributes the structural reason for the outperformance to the accelerated ramp-up of 800G and 1.6T optical modules. With the gradual easing of optical chip supply bottlenecks and the company's own capacity expansion, shipments of high-speed modules are entering a phase of rapid growth.
Looking ahead to the second half of 2026, Goldman expects the following trends to strengthen further: the revenue contribution from 1.6T modules will increase; the penetration rate of Silicon Photonics products will continue to rise; and strong customer demand for 800G+ products will support shipment growth.
Although the optical chip supply remains tight in the near term, Goldman believes that increasing Silicon Photonics penetration and overall industry capacity expansion will provide solid support for future shipment growth. Over a longer horizon, the bank anticipates that from 2027 onward, demand will gradually evolve from the current focus on scale-out to include scale-up and scale-across, opening new growth avenues for the company.
Comprehensive Forecast Upgrades and Revised Price Target
Given the strong Q2 guidance and the expected increase in 800G/1.6T module shipments driven by improved chip supply and capacity expansion, Goldman Sachs has raised its profit forecasts for Eoptolink Technology Inc.,Ltd. (ASX: 300502) by 7% for 2026, and by 2% each for 2027 and 2028. Key forecast data includes projected 2026 revenue of 51.457 billion yuan and net profit of 20.683 billion yuan; 2027 revenue of 73.911 billion yuan and net profit of 30.080 billion yuan; and 2028 revenue of 84.975 billion yuan and net profit of 34.576 billion yuan.
The approximately 2% upward revisions to 2027 and 2028 revenue and profit forecasts reflect Goldman's continued optimistic view on the company's medium-to-long-term high-speed module shipment growth.
For valuation, Goldman applied a forward price-to-earnings (P/E) methodology, basing it on the 2027 forecast net profit. The target P/E multiple was set at 29.3x, up from 28.4x previously, leading to a 12-month price target increase from 600.71 yuan to 633 yuan. The bank noted that this 29.3x multiple aligns with the stock's historical average forward P/E of around 28x since September 2018.
With the current stock price at 482.88 yuan, the new target of 633 yuan implies a potential upside of approximately 31.1%. The company's market capitalization is approximately 672 billion yuan.
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