China Communications Infrastructure — What's New from Citi 2026 China Conference: HGtech (000988.SZ; Not Covered)

HGtech (000988.SZ; Not Covered) attended the Citi 2026 China Conference on 11 November. Management guided domestic datacom optical module demand above 20mn units in 2026E, with 400G over 50% and 800G around 40%, while 800G plus 1.6T volume grows about 50% YoY in 2027E with 400G flat and blended datacom gross margin near 20%. NPO orders start in 2027 with mass production by end-2027; the 3.2T NPO is expected to price at 1.7-1.8x 1.6T pluggables with GPM above 30% and domestic share no lower than pluggable modules. HGTech has signed over US$1bn of long-term DSP agreements with leading overseas suppliers covering most 2027E demand, targets roughly 100% domestic DSP for 400G in 2027, and ranks shortages as DSP, high-end PCB, high-end MLCC and InP substrates, with laser chips relatively loose. Overseas optics revenue grew about 400% YoY in 9M26, Thailand capacity should exceed 1mn units per month from 3Q27, and overseas revenue could surpass domestic in 2027E. FCC risks remain an overhang b