A certain optical communication company reported Q1 revenue of 730 million, a year-on-year increase of 155%. The new factory in Thailand will begin trial production in May.

In the first quarter of 2024, a certain company achieved revenue of 730 million yuan, a year-on-year increase of 155%. The net profit attributable to the parent company reached 280 million yuan, a year-on-year increase of 203%, while the net profit attributable to the parent company after deducting non-recurring gains and losses was 270 million yuan, a year-on-year increase of 215%.

The performance in the first quarter is basically flat compared to the previous quarter. This is mainly due to the shortage of passive component production capacity during the Spring Festival, as well as the impact of equity incentive expenses on net profit. The company's passive component business has a certain reliance on skilled workers, and the turnover of production personnel increased before and after the Spring Festival, requiring a gradual improvement in the proficiency and efficiency of new employees. Currently, the issues of personnel shortage and production capacity have been significantly alleviated. It is expected that as new recruits arrive and skills improve, the shortage of production capacity will further improve.

The company's restricted stock incentive plan released in 2023 will start accruing expenses in 2024, with an estimated annual expense of about 82.4 million yuan, which will affect the net profit of each quarter.

In terms of inventory management, the company has performed excellently. As of the end of the first quarter, the inventory stood at 2.3 billion yuan, a decrease from 2.6 billion yuan at the end of the previous year. This reflects the company's focus on improving operational quality and long-term healthy development while achieving business growth, enhancing operational turnover capability through effective inventory management.

The company is actively promoting capacity construction, with the first phase of its production base in Thailand expected to begin trial production in May this year. Several employees are already on-site responsible for preliminary infrastructure and decoration work. After the production plant is put into operation, the company plans to dispatch some employees from domestic production bases and hire locally in Thailand. As capacity gradually expands, coupled with the rapid increase in demand for high-speed optical devices driven by AI development, the overall revenue scale of the company is expected to continue to grow, especially after the production of high-speed optical devices and other products at the Thailand base, which is expected to accelerate shipments.

It is expected that the company's operating revenue for 2024-2026 will be 3.8/5.8/7.4 billion yuan, and the net profit attributable to the parent will be 1.4/2.0/2.6 billion yuan, respectively. Considering the high prosperity of optical communication brought by AI, the company's development prospects are promising.

However, investors must also be aware of potential risks, including AICG development falling short of expectations, computational power demand not meeting expectations, and increasing market competition.