Guosheng Securities: Initial payment target price of HK$220 for Haiguang Xinzheng (01191) “buy” rating

The Zhitong Finance App learned that Guosheng Securities released a research report saying that with the gradual deployment of the company's high-speed optical modules and the strategic NPO/CPO circuit, combined production capacity climbing to release scale effects and the increase in the share of silicon light products, the revenue growth of Haiguang Xinzheng (01191) is expected to resonate with the improvement in gross margin. The bank expects the company's revenue in 2026-2028 to be about RMB 2.0/101.7/RMB 14.91 billion, and net profit to mother about RMB -0.3/8.6/1.6 billion yuan. Based on 20x 2027e P/E, the bank gave Haiguang Core a target price of HK$220, which covered the “buy” rating for the first time.

Guosheng Securities's main views are as follows:

Self-developed silicon light foundation, card position AI optical interconnection

Haiguang Core is a supplier of optoelectronic interconnection products, leading in silicon technology in China. Established in 2011, Haiguang Core is one of the few companies in the world that has both silicon photonic chip design capabilities and silicon photonic module R&D and mass production capabilities. The company's product line covers a full range of 400G-1.6T silicon optical modules, AOC/AEC, etc., and has a 6.4TNPO layout, which can cover all levels of connectivity requirements within AI data center cabinets, from cabinet to cluster.

Benefiting from continued investment in AI computing power infrastructure and transmission rate upgrades, the company's revenue grew rapidly

In 2023-2025, the company's revenue was 1.75/8.62 billion yuan, respectively, with a compound annual growth rate of 164%. The company's product structure was upgraded simultaneously. The total revenue share of 2026H1, 400G/800G rose to 82.9%, and the revenue share of silicon light products rose to 39.0%. Gross margin showed a trend of rising first and then falling: in 2023, the gross loss ratio was 17.9%; in 2024, it changed to 11.8%; in 2025, it fell to 9.0% due to a decline in the share of high-margin overseas business and domestic price competition; and 5.6% in 2026H1, mainly due to production capacity not fully meeting orders from high-margin customers. Gross margin is expected to pick up as IPO fund-raising and production capacity climbs, high-speed silicon module release, and overseas business advances.

At the industry level, the AI optical module market is rapidly expanding, and silicon photonic solutions have advantages such as cost and power consumption

According to Frost & Sullivan, the global and Chinese AI optical module markets are expected to reach 347.5/99 billion yuan respectively in 2030, with a compound growth rate of 30.6%/36.0% in 2026-2030, respectively. The next-generation NPO/CPO market is expected to grow from 600 million yuan in 2025 to 204.2 billion yuan in 2030. Silicon photonics is a key basic technology for high-density, high-speed, and energy-efficient optical interconnections. It not only forms the foundation for optical modules, but also provides underlying support for more advanced NPO and CPO technologies. The optical module industry has high barriers and outstanding concentration in terms of technology, customer certification, supply chain, product comprehensiveness and globalization. In 2025, the global optical module CR5 is about 63.5%. The company entered the market with differentiated silicon photonics routes and ranked 17th in global optical module revenue in 2025 (0.8% share).

The company continues to expand its product, technology, production capacity and client layout around the high-speed silicon optical main line

1) Product side: A 1.6T series optical module based on 8×212.5G/224GPAM4 has been launched and will be shipped to leading overseas AI computing power customers in the second half of 2026; a 6.4 TNPO light engine has been launched, and a strategic agreement has been reached with industry partners to develop and commercialize NPO/CPO solutions.

2) Technical side: Master end-to-end capabilities from self-developed silicon chip design, wafer testing to module manufacturing. Self-developed WIMO packaging test platform, relying on a 12-inch wafer platform, the overall cost of the module is 20-30% lower than that of competing products.

3) Supply chain and production capacity side: Orders for about 10 million DSP chips have been locked in advance in 2027 to guarantee high-speed product delivery, and advanced packaging cooperation has been reached with Baiwei Storage and Grofond; the IPO raised about 53.4% to expand production. Among them, the production capacity of 800G and 1.6T optical modules at the Nantong base will reach 100,000 and 300,000 units per month, respectively.

4) Clients: Domestic cooperation with leading customers has been strengthened through the JDM model to keep up with market demand; overseas has accelerated product entry, customer verification and channel construction, and has signed JDM/ODM agreements with US customers.

Risk Alerts

The risk of technology iteration and product commercialization falling short of expectations, the risk of increased industry competition, the risk of supply chain stability and rising raw material costs, and the risk of overseas market expansion and trade policy uncertainty.