Goldman Sachs Boosts Zhongji Innolight to 'Buy', Sees 200% Upside Potential
Goldman Sachs has given Zhongji Innolight a 'Buy' rating, citing upside potential exceeding 200%. The firm's core bullish thesis rests on the accelerated mass production of 1.6T optical modules and the company's competitive moat in silicon photonics technology.
The report projects that Zhongji Innolight will achieve a compound annual revenue growth rate of 78% from 2026 to 2028, with net profit forecasts for 2026 and 2027 exceeding market consensus by 25% and 42%, respectively. This optimism stems from a more favorable outlook on the company's revenue growth and gross margins.
The company has also announced a share buyback program worth up to RMB 8 billion, which is expected to help restore its market capitalization to the trillion-yuan mark. Goldman Sachs' target P/E ratio for the A-shares is 35.6x, based on the correlation between peers' earnings growth and operating margins.