Goldman Sachs Raises Eoptolink Target Price to 841 Yuan; Three Investment Banks Point to 2027 as Key Validation Year
N.R. Finch
Goldman Sachs, Citi, and Morgan Stanley have all raised their targets on Eoptolink (新易盛), with Goldman going as high as ¥841. The real disagreement is not direction but timing — on 1.6T and NPO ramp — and all three lock in 2027 as the pivotal year for product-line validation.
Three targets, ¥140 apart — what's the actual debate?
Goldman at ¥841, Citi at ¥701, Morgan Stanley at ¥710 — all bullish, but the spread is ¥140.
The gap is not about whether Eoptolink rises. It is about when 1.6T optical transceivers (the next-generation module that doubles data transmission speed), 3.2T, and NPO — near-package optics, an architecture that places optical connections right next to the chip — actually ramp into revenue.
This means → the banks are done debating "up or down." The fight is over how fast, and on which product line.
Why is Goldman the most aggressive?
Goldman raised its target twice in two months: from ¥518 to ¥737 in April, then to ¥841 on May 31 / June 1 — a cumulative revision of more than 60%.
The new thesis: 1.6T is ramping on two parallel paths — EML (a mature laser-based approach) and silicon photonics (a chip technology that moves signals with light instead of electricity — lower power, higher integration) — while 3.2T and 6.4T NPO enter the long-range revenue model from 2027 onward.
But Goldman itself notes: "800G EML transceivers remain the primary revenue source this year." This means → the ¥841 price is not paying for 2026 profits; it is paying for the certainty that high-speed products take a bigger share after 2027.
How do Citi and Morgan Stanley differ?
Citi's industry assumption is the boldest: global optical interconnect market reaching $92 billion by 2028, implying a three-year CAGR of 65%. Yet Citi values Eoptolink at only 20× 2027E P/E, well below Goldman's 28.4×. In plain terms = Citi sees a huge market but is more cautious about how much share Eoptolink can capture.
Morgan Stanley uses a residual-income model — a valuation method that blends bull, base, and bear scenarios into a weighted average — and sharply raises 2027–2028 shipment forecasts for 1.6T, calling Eoptolink "the key beneficiary of 800G and 1.6T module share gains."
This reflects a shared consensus: Eoptolink is a "platform player." The disagreement is strictly about what multiple to assign and how big a risk discount to apply.
Why is 1.6T the single most important near-term variable?
Goldman says Eoptolink began shipping 1.6T modules in Q1 2026, with a gradual ramp in Q2 and acceleration on both EML and silicon-photonics paths in Q3–Q4.
The EML path is mature but 200G-per-lane EML chip supply remains tight. Silicon photonics can bypass some of that bottleneck and raise system integration, but yield, design, and customer qualification all need concurrent validation.
This means → if 1.6T starts contributing meaningful revenue without a visible gross-margin decline, it validates the "platform" pricing thesis — and the premise behind every bank's high target holds.
What exactly does 2027 need to prove?
Goldman shifts its valuation base year to 2027. Citi writes CPO — co-packaged optics, a technology that embeds optical components directly inside the chip package — /NPO and 3.2T volume into its 2027 model. Morgan Stanley's scenario analysis also clusters the CPO breakthrough after 2027.
In plain terms = all three banks are betting on the same year, which means the market's real trading horizon has stretched from 2026 half-year shipments to the 2027 product-line transition.
Key metrics to watch in upcoming earnings: 1.6T revenue share, Thailand capacity ramp, inventory and prepayment trends, gross-margin stability, and customer-project progress on NPO and 3.2T.
Where is the biggest risk?
The number-one risk flagged by all three banks: if CPO eats into pluggable-module and NPO market space faster than expected, Eoptolink's revenue-growth thesis compresses.
Other pressure points: 200G EML yield falling short, overseas order volatility, and intensifying price competition.
This means → today's high targets rest on the assumption that "pluggable modules and NPO still have at least a two-to-three-year window." If CPO matures ahead of schedule, valuations revert to a more conservative P/E framework.
Content is for reference only, not financial advice.