The Zhitong Finance App learned that Citi released a research report stating that it will maintain the “buy” rating of Zhongji Xuchuang (03308) H shares and the target price of HK$1,394, while keeping the target price of A shares (300308.SZ) unchanged at RMB 1,212. The bank believes that Zhongji Xuchuang A shares and H shares fell by 12.7% and 10.9% respectively on November 3, which is believed to be related to investors' concerns about order cuts, but management has clarified that the company did not have extensive order cuts, and only individual customers made limited structural adjustments. Citi believes that the relevant stock price adjustments may be excessive, and the company's fundamentals are still stable, but the stock price is being dragged down by the cooling of artificial intelligence market sentiment.
The bank pointed out that demand for Zhongji Innotech's 800G and 1.6T products is still strong. Most 2027 orders have been locked in, and at least one major customer has provided clear 2028 demand guidance. There were no signs of slowing demand between the fourth quarter of 2026 and the first quarter of 2027. The supply of optical modules is still tight, product pricing is resilient, and the overall pricing environment is favorable.
On the supply chain side, the supply of DSP, optical chips and PCBs has gradually improved since the third quarter of 2026, which is expected to help shipments increase quarterly over the next few quarters. The company believes that the potential merger of leading DSP and laser suppliers will have no significant impact on supply availability.