Suzhou Tfc Optical Communication Co., Ltd. delivered a strong quarterly performance, with both revenue and profit growth exceeding 40%, benefiting from the accelerated expansion of the artificial intelligence industry and the faster pace of global data center construction.
According to the company's announcement, first-quarter revenue for 2026 reached 1.33 billion yuan, a year-on-year increase of 40.82%. Net profit attributable to shareholders of the listed company was 492 million yuan, up 45.79% compared to the same period last year. After excluding non-recurring gains and losses, the net profit was 493 million yuan, with the growth rate further expanding to 48.44%, indicating that the performance improvement was primarily driven by core business operations.
The company stated in its report that the revenue growth was mainly due to the accelerated development of the AI industry and global data center construction, leading to sustained and stable growth in demand for high-speed optical device products. Concurrently, the company has received shareholder approval to issue H-shares and list on the main board of The Stock Exchange of Hong Kong, marking an acceleration in its capital expansion efforts.
Alongside the high profit growth, net cash flow from operating activities decreased by 37.92% year-on-year to 182 million yuan, primarily attributable to a significant increase in expenditures for raw material procurement and tax payments. Exchange losses also significantly impacted financial expenses for the period, which increased by 326.37% year-on-year.
In the first quarter, the company achieved revenue of 1.33 billion yuan, an increase of approximately 385 million yuan compared to 945 million yuan in the same period last year. Net profit of 492 million yuan also rose by approximately 154 million yuan from 338 million yuan a year earlier. Basic earnings per share were 0.6331 yuan, an increase of 45.77%. The weighted average return on equity was 8.57%, up 0.44 percentage points from the previous year. Total assets at the end of the period reached 6.982 billion yuan, an increase of 8.25% from the end of 2025, while net assets attributable to shareholders of the listed company were 5.98 billion yuan, up 8.61% year-on-year. Operating costs grew by 30.15% to 577 million yuan, a rate slower than revenue growth, leading to an improvement in the gross profit margin. Total non-recurring gains and losses were -0.97 million yuan, having a minimal impact on net profit and indicating high profitability quality from the main business.
Research and development expenses for the quarter amounted to 87.31 million yuan, a substantial year-on-year increase of 41.98%, roughly matching the revenue growth rate and demonstrating the company's continued increased investment in AI optical device technology. The company attributed the rise in R&D spending to increased project investment and higher personnel costs. Regarding financial expenses, these reached 23.79 million yuan for the period, a significant deterioration compared to a net income of 10.51 million yuan in the same period last year, representing a 326.37% increase. This was mainly due to a notable year-on-year rise in exchange losses. This change partially offset the growth in operating profit and warrants attention. Additionally, credit impairment losses for the period were 6.84 million yuan, compared to a positive value of 0.34 million yuan a year earlier, resulting from an increase in bad debt provisions recognized based on credit impairment tests.
Despite the high profit growth, net cash flow from operating activities was 182 million yuan, a decrease of 37.92% year-on-year. The company explained that the primary reasons were increased expenditures for raw material purchases and tax payments. From the cash flow statement, cash paid for goods and services in the quarter reached 654 million yuan, a significant increase from 465 million yuan in the prior year period. Cash paid for various taxes also climbed to 171 million yuan from 97.51 million yuan. Although operating cash flow declined, the company's monetary fund balance at the end of the period remained substantial at 3.027 billion yuan, with cash and cash equivalents totaling 2.962 billion yuan, indicating overall liquidity remains ample. Prepayments at the end of the period increased by 365.14% from the beginning of the year to 966 million yuan, and other non-current assets increased by 400.19%, both related to increased advance payments for materials and equipment, potentially signaling that the company is actively building inventory to meet future order demand.
The company held an interim board meeting on March 14, 2026, and its first interim shareholders' meeting of 2026 on April 2, where a series of proposals related to the issuance of H-shares and listing on the main board of The Stock Exchange of Hong Kong Limited were reviewed and approved. These proposals covered the issuance plan, the plan for the use of raised funds, and related authorization matters. This signifies that the company will transition from being a domestic listed company to a dual-listed entity on both the A-share and H-share markets. The specific use of proceeds from the H-share issuance awaits further disclosure. The advancement of the Hong Kong listing plan will provide the company with broader international financing channels and is also expected to enhance its visibility and influence in the global optical communication market.
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