PANGAEA CONNECT (01473) issues positive profit alert, expects interim consolidated profit attributable to shareholders of not less than HK$80 million, representing a significant year-on-year increase.

PANGAEA CONNECT (01473) has issued an announcement that the Group expects to record an unaudited consolidated profit attributable to owners of the Company of not less than HK$80 million for the six months ended 30 September 2026, compared with an unaudited consolidated profit attributable to owners of the Company of approximately HK$15.4 million for the corresponding period in 2025. During the Period, the Group's revenue grew by over 80%, primarily driven by the Group's fulfilment and delivery of a substantial number of sales orders for 200Gb/s indium phosphide photodiode (PD) products. The resulting increase in sales volume and revenue drove the Group's net profit growth of over 400% during the Period. The Group currently delivers approximately 15 million PD products per month and expects this delivery volume to further increase in the second half of the current financial year and the next financial year. The Group supplies a comprehensive portfolio of optoelectronic and semiconductor components, including integrated circuits, lasers, photodiodes (PD) and related devices, which enable electrical-to-optical and optical-to-electrical signal conversion within high-speed optical 800G/1.6T/3.2T modules for AI data centre applications and optical interconnects. The Group's transimpedance amplifiers (TIA) are currently undergoing customer certification, while CW lasers are at the sample testing stage. In particular, the Group's 200Gb/s PD product business continued to benefit from strong market demand during the Period. This demand is primarily driven by the continued development of artificial intelligence infrastructure and the growing demand for high-speed optical connectivity for graphics processing unit (GPU) infrastructure. The Group believes that continued demand for its PD products, together with its existing backlog, will continue to provide a solid foundation for the Group's sustainable development. The Group's high-power industrial laser business is contributing increasingly and is expected to further diversify its revenue structure, raise average gross margins and deliver substantial profitability. The Group recently entered into an exclusive supply agreement with a leading domestic and global manufacturer of printed circuit board (PCB) laser drilling equipment for high-power laser light source systems (comprising laser light sources, power supply, air purification gas, cables and related accessories). The equipment is used by first-tier manufacturers to produce high-layer-count high-density interconnect (HDI) printed circuit boards and ultra-HDI printed circuit boards. The high-power laser light source systems are primarily applied in 1.6T/3.2T printed circuit board (PCB) laser drilling and laser circuit structuring. The Group commenced product deliveries in October 2026 and expects to deliver no fewer than 500 units in the financial year ending 31 March 2027 (expected revenue of no less than US$55 million). In addition to equipment sales, the Group has recently expanded its laser laboratory in Shenzhen to provide after-sales maintenance services, including laser head repair and replacement. This will further broaden the Group's revenue streams, enhance the laboratory's functions and capabilities as well as long-term overall profitability, and cultivate long-term customer relationships. The rapid expansion of AI data centres and high-speed AI communications is driving significant upgrades in computing and networking infrastructure. As bandwidth demand for hyperscale AI systems grows, the industry is accelerating its transition to 1.6T and 3.2T interconnect hardware, while adopting more powerful AI GPUs and advanced semiconductor packaging technologies. These systems require increasingly sophisticated, high-density PCBs and HDI boards with finer circuitry, more precise drilling, greater resistance to optical feedback, and significantly stricter manufacturing yield requirements. Consequently, as the AI infrastructure investment cycle progresses, demand for high-speed and high-precision laser processing (including micro-drilling, fine-line circuit structuring and other precision processes) is expected to grow accordingly. Against this backdrop, the Group is strategically positioned to capture the accelerating capital expenditure in the AI hardware supply chain. The Group's management expects the industrial laser business to become a key growth driver in the near future and to account for a significant proportion of profits in the financial statements in the coming years.