HK Stock Market Move | Concept stocks in optical communication led the decline. The shortage of optical fibers is determined by the supply-demand game. Nomura pointed out signs of accelerated industry capacity expansion.

Concept stocks in optical communication led the decline. As of the time of publication, Cig Shanghai (06166) fell by 23.13% to HK$116; YOFC (06869) fell by 21.46% to HK$200.4; TRIGIANT (01300) fell by 18.13% to HK$2.62; TIME INTERCON (01729) fell by 13.48% to HK$14.64. On the news front, on the afternoon of June 30, Yangtze Optical Fibre And Cable Joint Stock held its annual shareholders' meeting for the year 2025. Executive Director and CEO Zhuang Dan stated that it is expected that in the next three to five years, there will still be high investment in AI-related computing power infrastructure. The specific duration of the current shortage of optical fibers depends on the balance between supply and demand. "In the process of market competition, you can only do what you can control, which is to enhance the company's capabilities and maintain a larger market share in the high demand for AI." Public information shows that Hengtong Optic-Electric, Far East Smarter Energy, Tongding Interconnection Information, Hoshine Silicon Industry, Han's Laser Technology Industry Group, and others have initiated plans to expand their optical fiber production. Nomura stated that the supply constraints will continue in the short term, and Yangtze Optical Fibre And Cable Joint Stock can continue to benefit from higher spot prices and profit margin expansion due to their increased involvement in the AI data center market. However, if new entrants can successfully develop high-end products and smoothly implement their capacity expansion plans, the bank believes that market competition will intensify, and existing participants like Yangtze Optical Fibre And Cable Joint Stock may face pressure on profit margin expansion.