20260813-招银国际-4Q_earnings_beat_optical_demand_stays_robust_w／capacity_playing_catch-up_5页_1mb

Coherent (COHR US) Summary

Core Content and Key Highlights

Coherent (COHR US) reported strong financial results for 4QFY26, with revenue increasing by 34% year-over-year (YoY) and 13% quarter-over-quarter (QoQ) to US$2.05 billion, surpassing both the Bloomberg consensus and the high end of its guidance. The non-GAAP gross profit margin (GPM) expanded to 40.2%, exceeding expectations.

The company is experiencing robust demand in the optical market, particularly in 800G, 1.6T, and emerging optical architectures. However, growth is increasingly constrained by supply issues, with InP (Indium Phosphide) being the principal bottleneck. The company expects Datacenter revenue growth to exceed 80% YoY in Q1FY27 due to the increase in InP laser output by ~80% YoY.

Key Financial Metrics

Revenue Growth

• FY25A: US$5,810 million
• FY26A: US$7,118 million
• FY27E: US$10,944 million (up 53.7% YoY)
• FY28E: US$15,052 million (up 37.5% YoY)
• FY29E: US$18,042 million (up 19.9% YoY)

Gross Margin (GPM)

• FY25A: 39.4%
• FY26A: 39.6%
• FY27E: 41.9% (up 2.5ppt)
• FY28E: 43.6% (up 1.7ppt)
• FY29E: 44.6%

Adjusted Net Profit

• FY25A: US$1,096.6 million
• FY26A: US$2,056.0 million
• FY27E: US$3,143.2 million (up 87.5% YoY)
• FY28E: US$4,036.2 million (up 52.9% YoY)

Earnings Per Share (EPS)

• FY25A: US$5.61
• FY26A: US$10.17
• FY27E: US$15.55
• FY28E: US$19.96

P/E Ratio

• FY25A: 63.4
• FY26A: 35.0
• FY27E: 22.9
• FY28E: 17.8

Investment Recommendation

• Maintain BUY with an adjusted target price of US$435, based on a 28x FY28E P/E.
• The previous target price was US$465, and the current price is US$355.64, indicating a 22.3% upside.

6-inch InP and Margin Expansion

The 6-inch InP platform is driving structural margin expansion rather than just operating leverage. Yields on the 6-inch platform have already exceeded those on the 3-inch platform across various products like EML, CW lasers, and photodiodes. The larger wafer provides ~4x the output at half the cost, improving unit economics and enabling further earnings leverage.

CPO and NPO Opportunities

Coherent is not seeing displacement in its CPO (Co-Packaged Optics) opportunity due to NPO (New Packaging Optics). Both architectures offer comparable monetization opportunities, supported by a broad portfolio of lasers, ELS (Electro-Optical Subsystems), and fiber components. The upcoming PhotonLink platform supports integrated optics, shifting the company toward higher-value optical solutions.

Key Risks

• Slower-than-expected capacity expansion
• Geopolitical uncertainties
• Market volatility and other external factors

Shareholding and Stock Data

• Market Cap: US$69,563.2 million
• Average 3-month trading volume: US$828.5 million
• 52-week High/Low: US$426.89 / US$86.55
• Total Issued Shares: 195.6 million

Analyst Information

• Saiyi HE, CFA: (852) 3916 1739 | hesaiyi@cmbi.com.hk
• Kevin ZHANG: (852) 3761 8727 | kevinzhang@cmbi.com.hk
• Aaron GUO: (852) 3916 3715 | aaronguo@cmbi.com.hk

CMBIGM Ratings

• BUY: Stock with potential return of over 15% over next 12 months
• HOLD: Stock with potential return of +15% to -10% over next 12 months
• SELL: Stock with potential loss of over 10% over next 12 months
• NOT RATED: Stock not rated by CMBIGM
• OUTPERFORM: Industry expected to outperform the relevant broad market benchmark
• MARKET-PERFORM: Industry expected to perform in-line with the relevant broad market benchmark
• UNDERPERFORM: Industry expected to underperform the relevant broad market benchmark

Conclusion

Coherent is well-positioned for continued growth and margin expansion, driven by increased InP capacity, strong demand in optical technologies, and diversified product offerings. The company is expected to benefit from structural improvements in its 6-inch platform and expanding into integrated optics with the PhotonLink platform. Despite the challenges of supply bottlenecks, the company is on track to meet its GPM targets and maintain a competitive position in the market.