T&S Communications' business prospects appear bright despite 2Q gross margin pressure, say Nomura analysts Bing Duan and Ethan Zhang. Rising shipments of high-end optical transceivers and growing adoption of technologies such as near-field packing and co-packaged optics are likely growth drivers, they say in a note. Despite competition, T&S could benefit from an undersupplied high-end optical connector market, potentially supporting sequential growth in 2H 2026 and 2027. The recent pullback in shares also makes the stock more attractive, it says. Nomura upgrades the stock to buy from neutral, and raises target price to 231.50 yuan from CNY138. Shares are down 7.8% at CNY183.86. (venkat.pr@wsj.com)