Daiwa: Initiates "Buy" rating for YOFC (06869) with a target price of HKD 152.

Daiwa has published a research report stating that it initiates coverage on YOFC (06869) with a "Buy" rating and a target price of HKD 152, equivalent to a forecasted price-to-earnings ratio of 10 times for next year. Daiwa indicated that Yangtze Optical Fibre And Cable Joint Stock benefits from the current strong upcycle in the optical fiber industry. It is expected that the company's technological leadership and the growth potential in its optical interconnection business will support it, with the gross profit compound annual growth rate for the optical interconnection business projected at 137%, driving a compound annual growth rate for net profit from 2025 to 2028 of 135%. In terms of overseas business, Daiwa believes that Yangtze Optical Fibre And Cable Joint Stock's global layout and close relationships with international clients are key advantages for capturing overseas AI infrastructure demand. The bank predicts the compound annual growth rate for overseas gross profit from 2026 to 2028 will be 109%, with gross profit margins expected to be 53%, 56%, and 48% respectively during the same period.