Recently, Dongtian Micro unveiled its performance forecast for the first half of 2026, projecting a net profit attributable to the parent company ranging from RMB 85 million to RMB 95 million for this period. This represents a substantial year-on-year increase of 67.71% to 87.44%. Excluding non-recurring gains and losses, the net profit is expected to reach RMB 84 million to RMB 94 million, marking a year-on-year surge of 68.75% to 88.84%.

Given the net profit attributable to the parent company of RMB 28.0654 million in the first quarter, the estimated net profit for the second quarter alone stands at approximately RMB 57 million to RMB 67 million, reflecting a sequential increase of 102% to 138%. This sharp growth trajectory unequivocally demonstrates that the transmission effect of AI computing power demand on the upstream components of optical communication is significantly intensifying.

The core reason for this remarkable performance surge lies in the company's strategic adjustment of its business structure. Dongtian Micro initially ventured into consumer electronics imaging optical components, but the growth engine in the first half of 2026 has shifted to the optical communication sector. The revenue share of communication products, such as optical isolators, WDM modules, and Z-Blocks, has been continuously on the rise.

In the first quarter of 2026, the company's gross profit margin witnessed a significant sequential increase of 6.37 percentage points, reaching 25.73%. Simultaneously, the net profit margin rose by 5.06 percentage points sequentially to 13.61%. However, it is noteworthy that the gross profit margin in the first quarter experienced a slight year-on-year decrease of 0.71 percentage points, while the net profit margin increased by 0.73 percentage points year-on-year. The year-on-year pressure on the gross profit margin may stem from the consumer electronics business still being at the bottom of the cycle, thereby dragging down the overall gross profit level. The sequential improvement, on the other hand, reflects the strong pull of the incremental communication business.

It is worth highlighting that although the gross profit margin of communication optics was lower than that of imaging optics in 2025, the significant sequential increase in the gross profit margin in the first quarter was more attributable to the release of scale effects resulting from the increased capacity utilization of communication products, rather than mere changes in the revenue structure. Despite the revenue share of the communication optics business for the entire year of 2025 not yet surpassing that of imaging optics, its incremental contribution and the elasticity of profit margin improvement have started to dominate the company's growth narrative.

From the perspective of industry technical barriers, Dongtian Micro commenced its journey with optical coating processes and has amassed a wealth of experience in depositing over a hundred layers of thin films in the high-end filter sector. With the 800G and 1.6T high-speed optical modules entering a period of increased production, the demand for optical isolators and WDM filters has surged.

Dongtian Micro stated during institutional research that "currently, Faraday rotator sheets are primarily supplied by foreign manufacturers." The company has established multiple procurement channels, and its production and operations have not been significantly impacted. Dongtian Micro is precisely positioned to capitalize on this tight supply-demand balance. The company has completed the setup of its optical isolator product line and achieved bulk shipments. The equipment at the Nanchang optical communication base is arriving in stages, and the production line is releasing capacity in an orderly manner.

In June of this year, the company clearly stated during institutional research that orders for optical communication products are robust, and overall delivery is progressing steadily. Looking further ahead, the company announced in February of this year its plan to invest RMB 400 million in the construction of a global R&D center and a manufacturing headquarters in Daojiao, Dongguan. The strategic layout from Nanchang to Dongguan underscores its intention to build deeper competitive moats in the optical communication component sector.

From an industry-wide perspective, Dongtian Micro's performance surge is not an isolated phenomenon. In the first half of 2026, the profitability of the optical communication industry chain, spanning from fiber optic cables to optical modules and optical components, generally improved, and industry sentiment is spreading comprehensively. The resonance between industry trends (beta) and the company's unique strengths (alpha) constitutes the dual driving force behind Dongtian Micro's sustained performance upswing. The operational improvements, with revenue of RMB 877 million and net profit attributable to the parent company of RMB 101 million for the entire year of 2025, were further confirmed and amplified in the first half of 2026.

Furthermore, despite the rapid increase in the revenue share of communication products, the gross profit margin of communication optics was 19.70% in 2025, lower than the 26.36% of imaging optics. The sustainability of the overall gross profit margin improvement hinges on the further release of scale effects from communication products and the optimization of the high-value-added product structure.

At the same time, the optical communication industry is undergoing rapid technological iterations. The maturation and evolution of new paths, such as silicon photonics and CPO (Co-Packaged Optics), may reshape the demand landscape for components in the medium to long term, posing potential challenges to the company's existing product roadmap. However, the company stated in its performance briefing in July 2026 that the matching (supporting) components for CPO are in the early stages of R&D and sample evaluation, demonstrating its proactive intention to position itself in new technologies.

For now, amid the high-speed optical module production cycle driven by AI computing power, this precision optical component company is standing firm at the forefront of the industry wave, thanks to its breakthrough in communication optics.