Morgan Stanley: Maintains "Overweight" rating on Zhongji Innolight (03308), target price HK$1,385

Morgan Stanley released a research report stating that at the 2026 OCP Global Summit, Zhongji Innolight (03308, 300308.SZ) presented its vision and roadmap for open optical interconnect solutions, highlighting the following three core products. The bank maintains its "Overweight" rating on Zhongji Innolight, with an H-share target price of HK$1,385. 1) Open CPX MSA (pluggable CPO/NPO optical engines) defines standardized, connectorized pluggable co-packaged and near-packaged optical engine modules, with each slot capable of delivering up to 6.4-7.2T bandwidth, meeting AI scale-up requirements for density, thermal management, and maintainability while reducing power consumption. 2) XPO MSA (12.8T ultra-high-density pluggable optical modules) adopts an integrated liquid cooling design, with a single module capable of supporting up to 400W power consumption. The module solutions cover fully retimed, half-retimed (RTLR), and LPO. 3) Regarding SDM4 multi-core fiber (MCF) MSA, Zhongji Innolight is collaborating with Corning, Sumitomo, and AFL to lead the development of the SDM4 standard, aimed at addressing fiber routing congestion and excessive cable counts in AI scale-up and scale-out network architectures. As for the industry's first USFP (ultra-small form factor pluggable) 400G per channel optical transceiver module released at the summit, the bank believes Zhongji Innolight is well-positioned to become a key partner and capture significant market share; the bank expects commercial production to begin in 2028.