AI computing power demand boosts the prosperity of optical devices, Tianfu Communication expects its net profit to increase by 25%–45% in the first half of the year | Earnings report insight

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Benefiting from the accelerated construction of global artificial intelligence infrastructure, TFC (Tianfu Communication) continued to expand its profitability in the first half of the year.

On the evening of July 18, the company released its performance forecast, expecting net profit attributable to shareholders of the listed company in the first half of 2026 to be between 1.124 billion and 1.304 billion yuan, a year-on-year increase of 25% to 45%; net profit after deducting non-recurring gains and losses is predicted to be between 1.089 billion and 1.284 billion yuan, an increase of 25.56% to 48.02% year-on-year. In the same period last year, net profit was 899 million yuan, and net profit after deductions was 867 million yuan.

The company attributes the performance growth mainly to the accelerated development of the global AI industry and the wave of data center construction driving stable and continuous growth in the demand for high-speed optical devices. Meanwhile, exchange losses led to higher financial expenses year-on-year, exerting some drag on profit growth. As of market close on July 17, TFC's share price was 211.37 yuan, with a market capitalization of about 230.6 billion yuan.

AI and Data Center Demand Drives Boom in Optical Devices

TFC clearly stated in its announcement that the core driving force behind this period's performance growth comes from the downstream demand — the continuous expansion of data center construction has directly driven the steady increase in demand for high-speed optical device products.

The company said that, relying on a highly reusable general technology platform and the competitive advantage of highly vertically integrated products, it is able to provide customers with a wealth of optical interconnect product solutions. At the same time, the company continues to promote automation upgrades, drive intelligent manufacturing and lean improvements, and effectively convert incremental revenue into profit growth in the context of expanding demand.

It is noteworthy that the announcement mentioned that shortages of some materials during the reporting period had a certain impact on the capacity improvement of some products, indicating that there are still some bottlenecks at the supply chain level, but overall these have not constituted a substantial obstacle to performance growth.

Exchange Losses Pose Phased Negative Impact

While profits are growing, TFC is also facing financial pressure caused by exchange rate fluctuations. According to the announcement, the company’s financial expenses rose year-on-year due to exchange losses during the reporting period, exerting a certain negative impact on this period’s profit growth.

The company did not disclose the specific amount of exchange losses, but listed it as one of the main unfavorable factors affecting profit growth for the period. For optical device manufacturers mainly reliant on exports for revenue, the impact of RMB exchange rate fluctuations on financial expenses is something investors should continue to pay attention to.

Additionally, an increase in tax-deductible costs associated with employee equity incentives during the reporting period had a positive impact on net profit. The company expects that non-recurring gains and losses will contribute approximately 20 million to 35 million yuan to the net profit attributable to shareholders of the listed company.

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