Citi has issued a research report marking its first coverage of ZJ INNOLIGHT (03308) H-shares, assigning a "Buy" rating with a target price of HK$1,524. This valuation is based on 16.2 times the forecast 2027 price-to-earnings ratio.

The brokerage projects that the company's revenue and net profit compound annual growth rates will reach 129% and 149%, respectively, over the 2025 to 2028 period. This anticipated growth is driven by robust demand for AI optical communications, bandwidth upgrades, rapid production capacity expansion, an improved product mix, rising adoption of silicon photonics technology, and operational leverage.

Citi believes the company's comprehensive product portfolio, scalable manufacturing capabilities, cutting-edge technological advancements and R&D strengths, flexible and resilient supply chain, along with its solid relationships with leading global cloud service providers and AI customers, will support its market leadership position in the AI era.