--- title: "Net profit growth is more than double revenue, Feisu Innovation is reaping the profit dividends from the AI network" type: "Topics" locale: "en" url: "https://longbridge.com/en/topics/42849391.md" description: "If a large shopping mall sees a tenfold increase in foot traffic but only expands its stores without simultaneously widening elevators, corridors, and parking lots, the added capacity will be continuously consumed by congestion. Similarly, as the number of GPUs in an AI computing cluster continues to increase, if related actions do not keep pace, network bandwidth, communication latency, and connection stability will begin to affect the effective output of the entire cluster. On July 21, Feisu Innovation projected that H1 revenue would grow by 25% to 27%, net profit by 60.1% to 70.1%, with high-performance network solutions growing at approximately 45.4%..." datetime: "2026-07-22T08:49:43.000Z" locales: - [en](https://longbridge.com/en/topics/42849391.md) - [zh-CN](https://longbridge.com/zh-CN/topics/42849391.md) - [zh-HK](https://longbridge.com/zh-HK/topics/42849391.md) author: "[港股研究社](https://longbridge.com/en/profiles/3199113.md)" generator: "portal-rs" --- # Net profit growth is more than double revenue, Feisu Innovation is reaping the profit dividends from the AI network If a large shopping mall sees its foot traffic increase tenfold but only expands its stores without simultaneously widening elevators, corridors, and parking lots, the added capacity will be continuously consumed by congestion. The same logic applies to AI computing clusters: as the number of GPUs continues to increase, if supporting actions do not keep pace, network bandwidth, communication latency, and connection stability will begin to impact the effective output of the entire cluster. On July 21, Feisu Innovation (FSI) projected that H1 revenue would grow by 25% to 27%, net profit would grow by 60.1% to 70.1%, and high-performance network solutions would see growth of approximately 45.4%. Currently, Feisu Innovation's profits are outpacing its revenue, and high-speed interconnects have evolved from supplementary procurement to a key budget item in computing infrastructure construction. **Profits consistently outperforming revenue, the share of high-performance products is reshaping Feisu Innovation's profitability structure** The acceleration in Feisu Innovation's profits began in Q1 2026. Data shows In Q1 2026, the company's revenue was 787 million RMB, up 24.6% year-on-year; net profit was 156 million RMB, up 57%; adjusted net profit was 177 million RMB, up 72.2%; and revenue from high-performance network solutions grew by 40.8%. Roughly splitting based on the semi-annual forecast minus Q1 data, Q2 revenue is estimated at approximately 962 million to 990 million RMB, with net profit around 282 million to 309 million RMB, corresponding to a quarterly net profit margin of approximately 28.4% to 32.1%. Although this result is based on unaudited forecast figures, it already indicates that profit release accelerated further in Q2. A longer financial sequence provides reference. In 2025, Feisu Innovation achieved revenue of 2.966 billion RMB, up 13.5% year-on-year; net profit was 601 million RMB, up 51.4%. Revenue from high-performance network solutions increased from 831 million RMB to 1.073 billion RMB, a 29.1% increase, accounting for over one-third of the company's total revenue. Meanwhile, the gross margin for this business rose from 44.8% to 49.5%, the company's overall gross margin rose from 50% to 54.5%, and the net profit margin rose from 15.2% to 20.3%. Based on the latest forecast range, the H1 2026 net profit margin is further estimated to rise to approximately 24.6% to 26.6%. Among the above data, compared to revenue scale, the profit changes driven by product structure are more critical. Feisu Innovation categorizes network solutions with transmission rates of 100G and above as high-performance business. The increasing share of high-performance optical transceivers, fiber optics, and high-speed network products has driven improvements in average selling price and gross margin. As the company's revenue expanded, fixed investments in R&D, sales, warehousing, and platform operations were also amortized more fully. In 2025, cost of sales increased only from 1.306 billion RMB to 1.350 billion RMB, a growth rate significantly lower than revenue growth, allowing economies of scale to enter the income statement. The gap between the growth rate of cost of sales and revenue growth is a direct manifestation of economies of scale. After fixed costs are amortized, every additional 1 RMB of revenue requires only about 0.26 RMB in additional costs. This is one of the core drivers behind the net profit margin rising from 15.2% to 20.3%. Peter Lynch believes that "understanding the company" is the basic prerequisite for holding stocks. To understand Feisu Innovation, beyond labels like 800G and 1.6T speeds, one must also check whether the share of high-performance business, customer count, sales volume, cross-selling, and expense efficiency can improve synchronously. In 2025, the number of customers for high-performance solutions increased from approximately 12,100 to 13,500, and product sales volume increased from approximately 618,000 units to 756,300 units. Customer expansion and product volume growth jointly drove revenue, giving profit recovery a more solid foundation than simple price hikes. However, risks are also embedded in the same structure. High-performance products have stronger profit elasticity but also face faster technological iteration. If customers centrally switch product specifications, inventory management, compatibility certification, and supply chain response could all increase costs. Next, Feisu Innovation needs to continuously prove that the increase in profit margins comes from product competitiveness and operational efficiency. **GPU numbers continue to increase, network equipment begins to shift from supplementary procurement to the center of cluster efficiency** Global AI capital expenditure remains on an upward trend. In its Q1 2026 earnings report, Meta raised its full-year capital expenditure guidance from $115–135 billion to $125–145 billion, mainly considering rising component prices and future data center capacity construction. Microsoft's capital expenditure reached $31.9 billion in the fiscal quarter ending March 2026, with about two-thirds invested in short-cycle assets such as GPUs and CPUs. Currently within the industry, computing chips are still absorbing most of the budget, while switches, optical modules, high-speed cables, and network management systems also need simultaneous upgrades. Of particular note is that the bottleneck in large clusters is gradually shifting from single-chip performance to cluster coordination. GPUs need to frequently exchange parameters and data; the problem is that insufficient network bandwidth increases wait times, and latency and packet loss reduce cluster utilization. Consequently, high-speed interconnects have gained higher budget priority, and industry demand has shifted from purchasing single components to a comprehensive comparison of network architecture, compatibility, delivery, and O&M capabilities. Feisu Innovation's business boundaries are wider than those of a single optical component supplier. The company serves enterprise customers directly through the FS.com platform, with products covering optical modules, high-speed cables, fiber optics, switches, optical transmission equipment, and structured cabling, while also providing network operating systems and cloud management capabilities. As disclosed in the 2025 annual report, the company owns over 120,000 proprietary brand SKUs, serves over 500,000 customers, and covers more than 200 countries and regions. Such a broad product portfolio helps Feisu Innovation undertake the bundled needs of data centers from access and switching to transmission. 1.6T products add a new growth entry point to this system. The company's official website currently features a product combination of 1.6T OSFP224 optical modules, InfiniBand XDR cables, and Ethernet high-speed interconnect products, and disclosed at the 2026 OFC review that the product range has expanded from 100G to 1.6T. Based on existing public information, it can basically be confirmed that Feisu Innovation's product layout and commercial shelf have taken shape, though revenue scale, customer composition, and gross margin contribution still await formal semi-annual report disclosure. Global channels also bring regional concentration risks. In 2025, Feisu Innovation's US market revenue was 1.59 billion RMB, accounting for about 54% of the company's total revenue; US accounts receivable accounted for 57% of trade receivables. Delays in US customer capital expenditure, adjustments in trade rules, exchange rate fluctuations, and changes in cross-border supply chains could all transmit to orders, delivery, and payment collection. The company's annual report also lists intensified industry competition, international business risks, and changes in Sino-US trade policies as major uncertainties. DTC platforms, multi-category network equipment, and global warehousing services can diversify single-product cycles but cannot completely eliminate regional concentration. Feisu Innovation will need to further expand revenue from European, Asia-Pacific, and domestic enterprise customers, and increase the contribution of software, technical services, and complete solution packages, reducing dependence on a single region and single-speed products. **Acquisition of Shanghai Boda fills R&D and manufacturing gaps, loss-making assets will also test integration efficiency** On July 4, Feisu Innovation announced the acquisition of 100% equity of Shanghai Boda for 330 million RMB using own funds. Established in 1994, Shanghai Boda's products cover routers, switches, industrial switches, xPON optical networks, wireless Wi-Fi, and network security, having cumulatively launched over 1,000 mature products. R&D personnel account for about 30% of the total employees, holding 45 invention patents and 94 software copyrights, with a production capacity of over 10 million units or sets per year. Feisu Innovation's original advantages lie in global branding, online platforms, optical communication products, customer reach, and digital operations. Shanghai Boda's accumulation lies more in routing and switching equipment, operating systems, production lines, and industry project delivery. Cooperation with Shanghai Boda can well supplement Feisu Innovation's relatively weak independent R&D, large-scale manufacturing, and supply chain management capabilities. However, the acquired assets also carry clear financial pressure. Shanghai Boda reported revenue of 463 million RMB in 2025 with a net loss of 64.58 million RMB; in the first five months of 2026, revenue was 171 million RMB with a net loss of 35.81 million RMB. As of the end of May 2026, Shanghai Boda's equity attributable to the parent company's owners was negative 142 million RMB. After the transaction, Shanghai Boda will become a wholly-owned subsidiary of Feisu Innovation and be included in the consolidated financial statements, meaning losses, personnel costs, and integration expenses may suppress short-term profitability. It should be noted that product lines, R&D teams, and manufacturing capabilities can be quickly merged into the reports, but organizational efficiency and customer synergy require more time. Feisu Innovation needs to address issues such as product overlap, staffing, inventory structure, sales channels, and internal procurement systems. The speed at which Shanghai Boda's losses narrow will become an important indicator for measuring acquisition quality. If new orders cannot cover fixed costs, the capacity and R&D resources brought by the acquisition may also turn into a burden on profits. Feisu Innovation's existing financial foundation can provide some buffer. Operating cash flow reached 817 million RMB in 2025, up 100% year-on-year; inventory decreased from 572 million RMB to 473 million RMB, and inventory turnover days dropped from 164.7 to 141.3 days. However, trade receivables increased from 155 million RMB to 221 million RMB, and receivables turnover days rose from 19.4 to 23.1 days. Following the expansion of high-speed business and the consolidation of Shanghai Boda, changes in operating cash flow, inventory, and receivables will reflect growth quality earlier than revenue growth rates. Rising industry profits will attract more enterprises to enter, and technological upgrades will continuously shorten product life cycles. Next observations on Feisu Innovation will be more specific: Can 1.6T products generate stable revenue? Can the share of high-performance business continue to rise? Can the concentration of US market revenue decrease? When will Shanghai Boda break even? And can the newly added R&D and manufacturing capabilities translate into shorter delivery cycles and higher customer repurchase rates? For Feisu Innovation, the peak profit growth of 70.1% merely provides a 阶段性 performance catalyst; long-term asset revaluation still requires support from M&A integration, product upgrades, and cash flow quality. ### Related Stocks - [03355.HK](https://longbridge.com/en/quote/03355.HK.md) - [META.US](https://longbridge.com/en/quote/META.US.md) - [MSFT.US](https://longbridge.com/en/quote/MSFT.US.md) - [MSFL.US](https://longbridge.com/en/quote/MSFL.US.md) - [MSFO.US](https://longbridge.com/en/quote/MSFO.US.md) - [MSFD.US](https://longbridge.com/en/quote/MSFD.US.md) - [MSFU.US](https://longbridge.com/en/quote/MSFU.US.md) - [MSFX.US](https://longbridge.com/en/quote/MSFX.US.md) - [MSFY.US](https://longbridge.com/en/quote/MSFY.US.md) --- > **Disclaimer: This article is for reference only and does not constitute any investment advice.**