HK Stock Market Move | CIG Shanghai (06166) rises by over 8%, demand for optical modules continues to increase, institutions are optimistic about the industry's profitability improvement.

Cig Shanghai (06166) rose during trading, up more than 8% at the time of writing, with a 8.09% increase, reaching 100.9 Hong Kong dollars, with a trading volume of 318 million Hong Kong dollars. On the news front, industry research institution LightCounting predicts that the global optical module market size is expected to exceed 37 billion US dollars by 2029, and the 1.6T optical module is expected to enter its commercial year in 2025, with global demand estimated to be between 2.5-3.5 million units. Huax Long Securities believes that benefiting from the strong demand for Ethernet switches and high-speed optical modules in AI infrastructure construction, as well as the application and promotion of optical interconnect technology in AI-scale-up networks, the optical module market size is expected to continue to grow rapidly. The bank believes that the increase in demand for high-speed optical modules is expected to drive industry profitability. Cig Shanghai previously announced its plan to raise funds through H shares to increase the capital of its overseas wholly-owned subsidiary CIG America by 100 million US dollars, for capacity expansion, research and development upgrades, market expansion, and supply chain security, among other core strategic layouts. In addition, Cig Shanghai's investor relations activity record sheet revealed that a large number of shipments of 1.6T optical modules are expected to be achieved in the first quarter of 2026. In 2026, the shipment ratio of the company's 1.6T optical modules is estimated to be around 20%, with this ratio expected to increase over time; 800G optical modules will still be the main force in shipments that year, with the ratio adjusting dynamically along with market demand and company capacity release.