Silicon photonics supply chain explodes, Goldman Sachs calls for buying these two stocks
Commercial Times
February 16, 2025
Author Commercial Times Jane Weiser
February 16, 2025
Author Commercial Times Jane Weiser
Goldman Sachs Securities Greater China Technology Industry Research Director Zhang Bokai pointed out that benefiting from the progress of generative AI, data centers have been upgraded to 800G and 1.6T high-speed transmission, and the silicon photonics (SiPh) supply chain will usher in strong growth in 2024. Epitaxy silicon wafer suppliers Lianya (3081) and Xinxin (2455) are important early beneficiaries. They were both given a "buy" investment rating when they were first included in the research scope, and the estimated reasonable share prices are 686 yuan and 233 yuan respectively.
As the adoption of silicon photonic solutions in data centers increases, leading companies in the supply chain will benefit greatly. Goldman Sachs pointed out that Trina Solar is a leading manufacturer of epitaxial silicon wafers with vertical integration capabilities for CW lasers, and its service scope extends to cloud service providers in the United States and China. Its new product portfolio spans from smartphones to data centers and shifts from the receiving end to the transmitting end. The optimization of its product portfolio has led to an increase in gross profit margin.
Goldman Sachs Securities also noted that the high valuations of index stocks in the silicon photonics supply chain have always been a focus of market debate, but Triumph and Sun Hung Kai will benefit from the development of silicon photonics, which will help reduce their dependence on traditional businesses such as telecommunications and smartphones. In the next few years, they are expected to show completely different profit growth trajectories and impressive gross profit margin levels, thereby promoting a re-rating trend.
Foreign investment estimates that Lian Ya's revenue will have an annual compound growth rate of 60% from 2025 to 2028, crushing the 4% from 2013 to 2023. Its gross profit margin will increase several times from 13.1% in 2023 to 40.4% in 2028. Similarly, the new revenue compound annual growth rate from 2025 to 2028 is as high as 22%, significantly exceeding the 2% from 2013 to 2023, and the gross profit margin is expected to reach 46.5% in 2028.
It is worth mentioning that although Lian Ya has been included in the list of disposal stocks and is matched every 20 minutes, the disposal time will end on the 17th, and normal trading will resume on the 18th. The market is waiting to see whether it will set off a new wave of skyrocketing whirlwind.
In terms of profitability, foreign investors estimate that Lian Ya's net loss per share of NT$0.6 in 2024 will turn into a profit in 2025, with earnings per share (EPS) soaring to NT$9.33, and even reaching NT$28.91 in 2027, which is twice as much as this year.
Related link: https://www.ctee.com.tw/news/20250216700636-430201
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The content of this article only represents the author's personal views and has nothing to do with Kuiding.
The content, text and originality have not been verified by this website. This website does not make any guarantee or commitment to this article and all or part of its content, authenticity, completeness, or timeliness. It is for readers' reference only. Please verify the relevant content on your own.
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