HK Stock Market Move | Optical communication concept stocks lead the decline; market continues to focus on the outlook for AI capital expenditure; institutions say earnings may catalyze valuation repair.

Optical communication concept stocks led the decline. As of press time, TRIGIANT (01300) fell 10.13% to HK$2.085; Cig Shanghai (06166) fell 7.95% to HK$68.3; YOFC (06869) fell 6.60% to HK$104.8; Zhongji Innolight (03308) fell 5.37% to HK$714. On the news front, a latest Nomura report said AI capital expenditure is caught in a dilemma. If hyperscaler capex continues to accelerate, the market will focus heavily on the sustained consumption of free cash flow and further question the sustainability of overall financing; if hyperscaler capex slows materially, the AI trade will face a more violent shock. Huatai believes that volatility in the sector in recent weeks has been driven more by trading and sentiment factors, while computing power expansion and interconnect upgrades still support industry demand. Optical modules benefit from port rate upgrades and expanding cluster scale, while fiber demand grows with increased scale-up and scale-out connections; continued investment is expected to support orders and earnings delivery across the supply chain. The optical module and fiber sectors have gone through a period of bottoming, and earnings catalysts are approaching; the valuation repair opportunities of leading companies are worth watching.