Tianfu Communication has guided to a robust 40–60% rise in 2025 net profit, forecasting RMB 1.881 billion to RMB 2.150 billion, lifted by accelerating artificial‑intelligence applications and a global wave of data‑centre building. The company credits sustained demand for high‑speed optical components and gains from ongoing smart‑manufacturing programmes that have cut costs and improved efficiencies across both active and passive product lines. Converted to dollars, the guidance implies roughly $260m–$300m in net profit, a meaningful step up from the prior year but narrowly missing the sell‑side mean of RMB 2.17 billion.
Management flagged two headwinds that temper the headline improvement. Exchange‑rate losses pushed up financial expenses during the reporting period and trimmed the profit gain, while an increase in non‑recurring items also padded headline earnings: non‑recurring gains are expected to contribute about RMB 42–52 million this year, versus RMB 29.54 million a year earlier. The company’s disclosure makes clear that these one‑off items are not reflective of core operating momentum, even as they lift the final reported number.
The operational story underneath the guidance is straightforward and strategically important. Demand for high‑speed optical devices — including modules and components that feed AI accelerators and hyperscale data centres — is a structural tailwind for suppliers like Tianfu. As compute nodes proliferate and bandwidth expectations rise, vendors of optical interconnects stand to capture a disproportionate share of incremental spend, especially if they can marry scale with manufacturing efficiency.
For investors, however, the detail that Tianfu’s top‑end guidance falls just short of broker consensus is the crucial nuance. Analysts’ mean estimate of RMB 2.17 billion sits above the company’s RMB 2.15 billion ceiling, a gap that could cap upside in the stock despite strong underlying demand. The presence of both elevated financial costs and a bigger contribution from non‑recurring items suggests volatility around reported margins and underlines the need to separate recurring cash generation from headline accounting gains.
Looking beyond the immediate numbers, Tianfu’s update is a microcosm of a broader theme in Chinese technology manufacturing: secular demand from AI and data‑centre expansion is creating winners, but success depends on managing currency exposure, supply‑chain constraints and competitive pressure. Market participants should watch order growth for core optical products, gross‑margin trends excluding one‑offs, and the company’s hedging strategy for foreign‑exchange risks as the next set of indicators of sustainable performance.