Despite maintaining rapid growth, Eoptolink Technology Inc.,Ltd. (300502), a leading player in the Co-Packaged Optics (CPO) sector, saw significant stock price fluctuations after its first-quarter profit growth fell short of market expectations. On the evening of April 23rd, the company released both its 2025 annual report and its 2026 first-quarter report.
The 2025 annual report showed the company achieved operating revenue of 24.842 billion yuan, a year-on-year increase of 187.29%. Net profit attributable to shareholders reached 9.532 billion yuan, surging 235.89% compared to the previous year. The company proposed a dividend distribution, offering 10 yuan per share (before tax) based on the total share capital, totaling approximately 994 million yuan in cash dividends. Additionally, it proposed a capital reserve transfer of 4 additional shares for every 10 shares held. Against a high base from the previous year, Eoptolink's performance in 2025 continued its explosive growth, driven by the sustained market release of sales fueled by its core technological competitiveness. The annual report also highlighted breakthroughs in multiple R&D projects for new products and technologies, with sales of high-speed optical modules accounting for an increasing proportion of total revenue. The company has successfully launched a full series of 400G, 800G, and 1.6T optical module products based on silicon photonics and thin-film lithium niobate technologies. It has also developed multiple optical module products featuring high density and low power consumption advantages utilizing LPO/LRO, XPO, and NPO technical solutions. Building on this, the company continues to enrich its product matrix, having launched a new-generation 1.6T DR4 OSFP optical module based on the intensity modulation direct detection standard, a 6.4T NPO module based on silicon photonics technology, and the industry's first 12.8T XPO optical module. Furthermore, the company possesses substantial technical reserves and product layouts in cutting-edge fields like OCS and CPO.
In contrast to the strong annual report, Eoptolink's 2026 first-quarter results, while still showing rapid growth, indicated a slowdown in the growth rate, and net profit fell below general market forecasts. The first-quarter report revealed operating revenue of 8.337 billion yuan, a year-on-year increase of 105.75%. Net profit attributable to shareholders was 2.78 billion yuan, representing a growth of 76.79% year-on-year. The performance change was primarily attributed to a significant increase in sales revenue due to continued growth in computing power investments by end customers during the reporting period.
In the secondary market, Eoptolink's stock opened more than 9% lower on April 24th and continued to fluctuate at low levels. Within half an hour of trading, the turnover rate reached 4.05%. Behind the rapidly expanding trading volume, divergences among investors became noticeably more pronounced. The primary reasons for the significant stock price volatility were the mismatch between the Q1 net profit growth rate and the operating revenue growth rate, indicating a decline in profitability. Furthermore, the net profit figure was below the market's general expectation of approximately 3.2 billion yuan. Finally, the net profit achieved in the first quarter declined compared to the previous quarter.
An examination of Eoptolink's balance sheet and income statement reveals clues for the earnings miss. Firstly, the company's prepayments in Q1 reached 681 million yuan, a massive increase of 3920% year-on-year, mainly due to increased prepayments for raw materials. Although prepayments surged significantly for the quarter, against a backdrop of shortages for certain raw materials in the industry, locking in supplies early can ensure smooth subsequent production. Besides the substantial increase in prepayments, financial expenses in the first quarter amounted to 522 million yuan, a sharp year-on-year increase of 1678%, which the company attributed mainly to increased exchange losses. Given that over ninety percent of Eoptolink's revenue comes from overseas, fluctuations in the RMB exchange rate indeed impact the company's performance.
Following a multi-fold increase in its stock price, institutional investors showed heightened divergence at high levels, with selling being the dominant theme among leading institutions. In the fourth quarter of 2025, CITIC Securities and the Harvest CSI 300 ETF established new positions, entering the list of top ten circulating shareholders. Meanwhile, the E Fund ChiNext ETF, the Huatai-PineBridge CSI 300 ETF, the E Fund CSI 300 ETF, and the ChinaAMC CSI 300 ETF reduced their holdings to varying degrees. In the first quarter of 2026, the E Fund CSI Artificial Intelligence Theme ETF established a new position. The E Fund ChiNext ETF, the Huatai-PineBridge CSI 300 ETF, and the E Fund CSI 300 ETF continued to sell down their holdings after reducing them in the previous quarter. The ChinaAMC CSI 300 ETF and the Harvest CSI 300 ETF exited the list of top ten circulating shareholders.
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