After a period of consolidation, the trio of optical communication leaders, collectively known as "Yi Zhong Tian" — ZJ INNOLIGHT, Eoptolink Technology, and T&S Communications — has staged a robust rebound. Analysts attribute this surge to a broad recovery in the tech sector and a bullish research report from Goldman Sachs that strongly favors ZJ INNOLIGHT. Overall, the optical communications sector continues to exhibit strong upward momentum; while the secondary market has seen notable volatility, the industry's positive trajectory remains intact.
ZJ INNOLIGHT has spearheaded the counterattack. Compared with domestic institutions, overseas investment banks are more optimistic about the A-share optical communications sector, offering higher target prices for its leading companies. Recently, Goldman Sachs initiated coverage on ZJ INNOLIGHT's H-shares with a "Buy" rating and a 12-month target price of HK$3,267. Fueled by assumptions of higher revenue and gross margins, Goldman Sachs' net profit forecasts for ZJ INNOLIGHT in 2026 and 2027 exceed consensus market expectations by 25% and 42%, respectively. In its report, Goldman Sachs highlighted ZJ INNOLIGHT's leading position in silicon photonics modules, the accelerating mass production of 1.6T and higher-end solutions, a stable supply chain and diversified manufacturing bases, and manageable competition from co-packaged optics (CPO), all of which form its core competitive advantages. Additionally, with new technology roadmaps such as 2.4T, 3.2T, NPO, and CPO, technical barriers are expected to rise, limiting the pool of capable suppliers. Backed by sustained R&D investment and a robust product pipeline, Goldman Sachs believes the company will retain its industry leadership. Beyond the high 12-month H-share target, Goldman Sachs also reiterated its "Buy" rating on ZJ INNOLIGHT's A-shares, maintaining a target price of RMB 2,645.
Buoyed by Goldman Sachs' lofty price target, ZJ INNOLIGHT delivered a standout performance on September 7, with both A-shares and H-shares opening higher and surging through the session. By the close, the H-shares had jumped 19.18% to HK$1,199, while the A-shares climbed 10.38% to RMB 898.46. These levels imply potential upside of 172.47% and 194.39% for the H-shares and A-shares, respectively, relative to Goldman Sachs' targets. While domestic institutions generally hold a positive view of the "Yi Zhong Tian" stocks, their price targets are more conservative than those of Goldman Sachs. According to the latest research from Nomura Orient International Securities, easing upstream supply constraints in the second half of the year will benefit ZJ INNOLIGHT's shipments of 800G and 1.6T optical modules in 2027, while the commercialization of 2.4T modules is expected to accelerate next year. Reflecting an acceleration in product upgrades and margin improvements, the firm has raised its A-share target price for ZJ INNOLIGHT to RMB 1,375. It is worth noting that despite this upward revision, the target remains significantly below Goldman Sachs' RMB 2,645.
In the secondary market, given the high correlation among the "Yi Zhong Tian" stocks, the surge in ZJ INNOLIGHT was accompanied by notable gains in Eoptolink Technology and T&S Communications. By the close of trading on September 7, Eoptolink Technology rose 8.08% to RMB 417.20, while T&S Communications advanced 7.36% to RMB 267.00. Notably, the combined market capitalization of the three "Yi Zhong Tian" companies surged by a massive RMB 162.5 billion in a single day.
The optical communications sector's high prosperity continues. While the short-term rebound in "Yi Zhong Tian" stocks is partly driven by positive news, the industry's underlying trend remains unchanged. After the earlier pullback, valuation risks have been significantly mitigated. Looking ahead, institutions are broadly optimistic. Galaxy Securities analyst Zhao Liangbi pointed out that OpenAI recently unveiled GPT-6 Astra, hailing it as the most intelligent and best-aligned model to date. The release of GPT-6 Astra once again confirms that frontier model training remains on an expansion path characterized by ultra-large clusters, heavy capital intensity, and strong interconnect dependence. Furthermore, the immediate beneficiaries are the 800G, 1.6T, and future 3.2T high-speed optical module chains, as the number of GPUs in training clusters and the optical connections per GPU are set to increase concurrently, with network speeds rapidly transitioning from 400G and 800G to 1.6T, which will become the mainstream incremental driver in 2026. With the disclosure of 2026 interim results for A-share companies complete, the core earnings picture for the optical communications sector is becoming clearer, with leading companies' explosive growth once again validating sustained AI computing demand and infrastructure buildout.
Industry insiders note that despite the high base from the same period last year, the optical communications sector maintained strong growth in the first half of 2026, further confirming that the industry is in a high-prosperity cycle. Going forward, market focus is likely to remain on downstream computing power demand dynamics, the pace of high-speed optical module volume ramp-ups, and companies' progress in capacity expansion and customer acquisition. From a broader industry perspective, the global computing race fueled by generative AI is intensifying, with North American cloud giants continuously raising capital expenditure. Optical modules, serving as the "vessels" for data transmission, represent the segment with the highest certainty of earnings delivery across the entire AI infrastructure. Technology iteration shows no signs of slowing: just as 800G products enter the peak of scaled shipments, the upgrade cycle to 1.6T is already on the horizon. More importantly, Chinese manufacturers have established formidable global competitive moats, deeply integrated into overseas supply chains, with order visibility and profitability for leading companies remaining at historical highs.
Guolian Minsheng Securities analyst Zhang Ning also believes that with sustained investment by North American CSPs in AI data centers, combined with the expansion of GPU cluster scale, increased per-card interconnect bandwidth, and accelerated upgrades from 800G to 1.6T, demand for optical modules, optical chips, and high-speed optical interconnects is expected to sustain high growth. Following the recent sector correction, concerns over slowing AI capital expenditure are likely to be gradually alleviated, and the continued high prosperity of the optical communications industry, along with a sector rebound, remains a key outlook.
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