The sustained growth in artificial intelligence-related computing power investment is expected to drive a significant earnings improvement for optical module manufacturer Eoptolink Technology Inc.,Ltd. in the first half of the year.
On July 19th, Eoptolink released its preliminary financial results for the first half of 2026. The company forecasts net profit attributable to shareholders to be in the range of 7.0 billion to 8.0 billion yuan, representing a year-on-year increase of 77.56% to 102.93% from the 3.942 billion yuan reported in the same period last year.
After excluding non-recurring gains and losses, the company anticipates a net profit between 6.981 billion and 7.981 billion yuan, a rise of 77.46% to 102.88%. This growth rate is essentially in line with the increase in net profit, indicating that the performance boost stems primarily from the expansion of core business operations, not one-off items.
The Core Business is the Primary Growth Driver
Eoptolink estimates that non-recurring items will have a minimal impact of approximately 19 million yuan on its net profit for the period.
Relative to the projected net profit range of 7.0 to 8.0 billion yuan, this 19 million yuan impact is negligible. The precise difference between the forecasted ranges for net profit and non-recurring-adjusted net profit is about 19 million yuan, confirming that the vast majority of the anticipated profit originates from regular operating activities.
Specifically, the projected growth rate for adjusted net profit, at 77.46% to 102.88%, closely mirrors the 77.56% to 102.93% increase forecast for net profit. For the market, this data signifies that the company's performance is not reliant on non-operational factors like investment returns, government subsidies, or asset disposals. The core support comes from sales growth driven by AI computing demand.
Two Key Factors Propelling Profit Acceleration
In its announcement, Eoptolink explicitly attributed the strong performance to the "sustained growth in artificial intelligence-related computing power investment and optimization of the product structure," expecting both sales revenue and net profit to see substantial year-on-year increases.
The deployment of AI model training and inference applications, coupled with rising capital expenditure from cloud service providers, is accelerating the upgrade of data center networks towards higher bandwidth, lower latency, and greater density. As a critical component for high-speed interconnections within data centers, demand for optical modules typically rises alongside switch rate upgrades and computing cluster expansions.
In this context, market focus has expanded beyond mere shipment volumes to include the proportion of high-speed products, customer mix, product iteration pace, and changes in profitability. Eoptolink's mention of "product structure optimization" suggests that higher value-added products are likely contributing more to both revenue and profit, enabling faster profit growth relative to revenue.
The forecasted net profit growth, nearing a doubling at the upper end, reflects the operating leverage the company is achieving during this high-demand phase. However, detailed figures on revenue scale, gross margin changes, shipment performance across product categories, and expense ratios will require further verification upon the release of the full half-year financial report.
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