HK Stock Market Move | YOFC (06869) dropped more than 9% in the afternoon. The expansion of fiber optic companies will eliminate shortages. The next two years may be the peak of profitability.

YOFC (06869) fell more than 9% in the afternoon, as of the time of writing, it has fallen by 8.03%, trading at 130.5 Hong Kong dollars with a turnover of 33.79 billion Hong Kong dollars. On the news front, the explosive growth in demand for AI computing power has pushed the optical fiber industry into an upward price channel. The significant increase in optical fiber prices and the existing industry supply-demand gap are driving multiple enterprises to initiate plans for expanding optical rod and optical fiber production. On the evening of July 10th, Fiberhome Telecommunication Technologies and Lingyi Itech both issued announcements. The former plans to raise funds of up to 2.913 billion yuan for projects such as intelligent manufacturing of optical fibers, while the latter plans to participate in regenerating Futong Jiashan and enter the optical fiber communication track. Furui released a research report stating that although AI and geopolitical conflicts are driving demand for optical fibers, the US supply chain is also facing serious shortages. However, as China and the global market significantly increase production, the increase in supply will gradually eliminate the shortage situation. YOFC may face the risk of market share loss, and profits in 2026 to 2027 may peak cyclically. Furui has downgraded YOFC's rating from "buy" to "hold", but has raised the target price from 10.73 Hong Kong dollars to 153.74 Hong Kong dollars.