Daiwa: Upgraded Changfei Optical Fiber H shares to "Buy" rating, maintaining target price of HKD 230.

Morgan Stanley's report states that Changfei Optical Fiber Cable has dropped by about 50% since its peak in June 2026, but the profit growth trajectory supported by the AI-driven fiber optic super cycle remains unchanged. The bank believes that the valuation adjustment has created an extremely attractive buying opportunity, and has decided to upgrade its H-share rating from "In line with the market" to "Hold", maintaining a target price of HK$230. The report points out that Changfei Optical Fiber's performance pre-announcement released on July 14 showed that second-quarter profit is expected to reach 19 to 25 billion yuan, making it very likely that the bank's forecast of 7.5 billion yuan for the full year will be met. In addition, although the market was previously concerned about supply risks from new capacity expansion, the bank expects that capacity expansion will take time, while the strong demand brought about by the booming AI infrastructure development will not undergo substantial changes in profit growth momentum in the next 6 to 12 months. Changfei Optical Fiber is also a leader in next-generation technological innovation, successfully completing the world's first field trial of a hollow-core fiber optic wave-division multiplexing transmission system in June 2026, further solidifying its technological leadership position.