HK Stock Market Move | YOFC (06869) further dropped by nearly 4% with Q3 net profit declining by close to 11%. UBS stated that the impact of short-term hollow-core optical fiber on profits is limited.

YOFC (06869) fell nearly 4%, as of press time, down 3.61% to 33.62 Hong Kong dollars, with a turnover of 104 million Hong Kong dollars. On the news front, YOFC previously released its performance, with third-quarter revenue of 3.891 billion yuan, up 16.27% and 11.46% year-on-year and quarter-on-quarter respectively, with a net profit attributable to the parent company of 174 million yuan, down 10.89% year-on-year and up 20.75% quarter-on-quarter; revenue for the first three quarters was 10.275 billion yuan, up 18.18% year-on-year; net profit attributable to the parent company was 470 million yuan, down 18.02% year-on-year. UBS recently released a research report stating that the current market sentiment has already reflected the growth potential of YOFC's high-margin data communication business and preliminary optimistic expectations for hollow-core optical fiber. The future upside potential is moderate. At the same time, they believe that hollow-core optical fiber has long-term development potential, and they expect the technology to gradually mature and make significant revenue contributions in the next 2-3 years. It is a strategic growth lever for the group, but the short-term impact on profitability is still limited.