Tianfu Communication's net profit is expected to grow by over 50% in 2025, but the amount falls short of institutional expectations.
The 1.6 trillion optical engine has achieved mass production, but the gross profit margin of optical communication components has decreased by 3.67 percentage points.

Ask AI · Why is Tenda Communication’s net profit growth not meeting institutional expectations?

Daily Economic News Reporter: Cai Ding Daily Editor: Bi Luming

Tenda Communication (SZ300394, stock price 317.36 yuan, market value 246.7 billion yuan) released its 2025 annual report on the evening of April 7. The company achieved approximately 5.16B yuan in revenue in 2025, a year-on-year increase of 58.79%; net profit attributable to shareholders of the listed company was about 2.02B yuan, up 50.15% year-on-year; and non-recurring net profit was approximately 1.98B yuan, an increase of 50.42%. The company plans to distribute a cash dividend of 7 yuan (including tax) for every 10 shares based on 777M shares, and to transfer 4 shares for every 10 shares from capital reserve, without issuing bonus shares.

According to Tenda Communication’s performance forecast disclosed in late January 2025, the company had expected to achieve a net profit attributable to the parent of 1.88B to 2.15 billion yuan in 2025, with a year-on-year growth of 40%–60%. Therefore, the actual disclosed figures are in the middle of this expected range.

Optical communication component gross margin declines by 3.67 percentage points

From a vertical perspective, this is the first time Tenda Communication’s revenue has exceeded 5 billion yuan in a single fiscal year, and net profit attributable to the parent has broken through 2 billion yuan for the first time. Quarterly, Tenda Communication achieved approximately 1.25B yuan in revenue in Q4 2025, a 45.28% year-on-year increase and a 14.87% decrease quarter-on-quarter; net profit attributable to the parent was about 552 million yuan, up 50.35% year-on-year and down 2.51% quarter-on-quarter.

In addition to performance growth, the annual report shows that net cash flow from operating activities during the reporting period increased by 47.97% to 1.868 billion yuan.

According to data compiled from Wind Financial Terminal, 21 institutions’ consensus forecasts for Tenda Communication’s 2025 revenue and net profit attributable to the parent are approximately 1.87B yuan and 5.59B yuan, respectively. Based on the disclosed data, the actual figures are below expectations, with the disclosed values being 7.65% and 4.16% lower than the consensus forecasts.

Image source: Wind

In terms of R&D, Tenda Communication’s annual R&D investment increased by nearly 15%, with the R&D team expanding by over 40%, and nearly 200 patents domestically and internationally.

In the optical module and core device business, market attention mainly focuses on the speed of technological iteration. The annual report explicitly discloses that the company successfully completed mass production of 1.6T optical engines and the development of CPO (co-packaged optics) supporting optical devices, laying a foundation for next-generation supercomputing centers and AI (artificial intelligence) cluster applications. Meanwhile, the company actively layouts next-generation technologies such as silicon photonics integration to build long-term core product competitiveness.

The annual report shows that the company’s core “optical communication components” output increased by 42.58%, mainly due to a year-on-year increase in the production of optical components; sales volume increased by 21.78% from the previous period; revenue was about 2.11B yuan, a year-on-year increase of 57.27% from approximately 5.08B yuan in the same period last year. However, the gross margin of this business declined from 57.29% in the same period last year to 53.62%, a cumulative decrease of 3.67 percentage points.

Looking at products, Tenda Communication’s revenue from passive optical devices increased by 32.23% year-on-year to about 3.23B yuan, accounting for 40.37% of revenue, down from 48.47% in 2024; active optical devices’ revenue grew by 81.11% year-on-year to about 2.08B yuan, increasing their share of revenue from 50.91% to 58.06%.

Among them, the gross margin of passive optical devices fell by 4.74 percentage points to 63.67%, while the gross margin of active optical devices declined by 0.06 percentage points to 46.63%.

At the same time, Tenda Communication also disclosed in the annual report that there is a risk of declining product gross margins. The company stated, “The high-speed optical engine project funded by issuing shares to specific targets has relatively low gross margins. As the project’s sales increase gradually, it may reduce the company’s overall gross margin.” Additionally, the initial production phase of the Thailand factory faces issues such as operator proficiency and capacity utilization, leading to higher overseas production costs compared to domestic, further compressing profit margins.

Customer concentration further increases

Although revenue volume is large, the Daily Economic News reporter noted that Tenda Communication’s customer structure during the reporting period was relatively concentrated — the combined sales amount from the top five customers accounted for 89.73% of total annual sales, further up from 86.8% in 2024. Among them, the company’s largest customer (Fabrinet) had sales of 3B yuan, accounting for 63.31% of the annual sales, up from 61.69% in 2024.

Image source: Tenda Communication Annual Report

The annual report also shows that Tenda Communication’s export revenue share in 2025 decreased from 76.06% in the previous year to 74.35%. However, due to exchange rate fluctuations, the company still incurred a foreign exchange loss of 47.52 million yuan, leading to a 66.24% increase in financial expenses year-on-year, directly eroding part of the profit.

Meanwhile, the company also mentioned in the annual report that “due to the pace of upstream capacity release, yield ramp-up, and other factors, some key materials in the industrial chain face phased supply tightening, longer delivery times, and price volatility risks, which may adversely affect order delivery, costs, gross margins, and the production speed of new products,” exposing that the company’s order fulfillment and cost control are facing substantial challenges amid upstream capacity release.

Outlook for 2026, Tenda Communication states that this year it will continue to focus on core businesses, deepen technological research and product iteration, respond swiftly and with high quality to strategic customer demands, and proactively layout next-generation technology directions to strive for steady growth in both quality and scale. Meanwhile, the company will accelerate global capacity and supply chain deployment, promote digitalization and intelligent empowerment, strengthen compliance and security governance, and drive high-quality, sustainable development.

Daily Economic News