The optical module giant Eoptolink Technology Inc.,Ltd. (SZ: 300502) released its preliminary earnings forecast for the first half of 2026 on the afternoon of July 19. The company expects to achieve net profit attributable to shareholders of between 7 billion and 8 billion yuan for the first six months, representing a year-on-year increase of 77.56% to 102.93%. For the same period last year, the profit was approximately 3.942 billion yuan. It also forecasts adjusted net profit, excluding non-recurring gains and losses, of 6.981 billion to 7.981 billion yuan, a rise of 77.46% to 102.88% compared to the prior year's 3.934 billion yuan.
The company stated that this preliminary forecast is based on initial calculations by its finance department and has not been audited. Detailed financial data for the first half of 2026 will be disclosed in the company's semi-annual report, which is scheduled for release on August 25, 2026.
Second Quarter Performance Shows Strong Sequential Growth
According to Eoptolink's first-quarter 2026 report, the company achieved a net profit attributable to shareholders of 2.78 billion yuan and an adjusted net profit of 2.768 billion yuan. Based on this, the company projects its second-quarter net profit attributable to shareholders will be between 4.22 billion and 5.22 billion yuan, indicating a sequential growth of 51.80% to 87.77%. The projected adjusted net profit for Q2 is between 4.213 billion and 5.213 billion yuan, representing a quarter-on-quarter increase of 52.20% to 88.33%.
Furthermore, compared to the second quarter of 2025, where the company reported a net profit attributable to shareholders of 2.37 billion yuan and an adjusted net profit of 2.365 billion yuan, the forecast implies a year-on-year surge of 78.06% to 120.25% for net profit and 78.14% to 120.42% for adjusted net profit in Q2 2026.
The company attributed the significant year-on-year growth in first-half performance to sustained investment in AI-related computing power and product structure optimization, which are expected to drive substantial increases in both sales revenue and net profit. It also noted that non-recurring gains and losses are estimated to impact net profit by approximately 19 million yuan for the first half.
Significant Stock Price Pullback from Highs
In the first half of 2026, the global expansion of AI computing infrastructure has directly accelerated the upgrade cycle for optical module data rates. Surging bandwidth demands from computing servers and supercomputing clusters have made high-speed optical modules a primary procurement focus for downstream cloud providers. The industry is currently in a phase where "unexpectedly strong demand for 800G" coexists with the "batch delivery of 1.6T" products. Core manufacturers with mass production capabilities have secured orders covering the entirety of 2026, with schedules for some key clients extending into 2027.
However, the number of manufacturers capable of large-scale delivery of 1.6T and 800G modules remains limited, with high industry barriers concentrated in areas like technical thresholds and yield control. Leading companies, leveraging their technological advantages, have secured long-term orders from cloud service providers in advance, locked in production capacity, and achieved simultaneous volume and price increases for high-end products.
According to previous disclosures by Eoptolink, 1.6T and 800G modules are its main delivery products for this year. Orders for 1.6T optical modules have seen a substantial increase compared to last year and are expected to show rapid sequential growth quarter by quarter throughout 2026.
Just over a month ago, the company also disclosed plans to issue H shares and list on the Main Board of the Hong Kong Stock Exchange, marking a key step in its global capital strategy. The proposed H share issuance would not exceed 8% of the total share capital post-issuance (before any exercise of an over-allotment option), with a 15% over-allotment option granted to the overall coordinator. Proceeds are intended for core technology R&D, smart manufacturing upgrades, capacity expansion, strategic mergers and acquisitions, and working capital supplementation.
Despite these positive developments, the A-share market, led by the optical communications sector, has recently undergone significant adjustments. Taking Eoptolink as an example, its stock price fell sharply by 11.01% on Friday, July 17, with a daily turnover of 37.486 billion yuan and a turnover rate of 6.06%. Based on its closing price of 482.88 yuan per share that day, the stock has retreated approximately 21.97% from its historical intraday high of 618.87 yuan per share (adjusted) reached on July 1.
Peer Company Also Reports Earnings Forecast
Another major player in the A-share optical communications sector, TFC Optical Communication, also released its earnings forecast on Saturday, July 18. TFC Optical Communication expects its first-half 2026 net profit attributable to shareholders to be between 1.124 billion and 1.304 billion yuan, a year-on-year increase of 25% to 45%. Its projected adjusted net profit is between 1.089 billion and 1.284 billion yuan, representing growth of 25.56% to 48.02%.
Calculations based on its first-quarter 2026 report indicate that TFC Optical Communication anticipates a second-quarter net profit attributable to shareholders of 632 million to 812 million yuan, a sequential increase of 28.46% to 65.04%. The projected Q2 adjusted net profit is between 596 million and 791 million yuan, showing quarter-on-quarter growth of 20.89% to 60.45%.
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