On Monday (September 28), Chinese optical fiber concept stocks suffered a sharp decline, with Yangtze Optical Fibre and Cable (YOFC) H-shares leading the fall by 16.03% to HKD 156.6. The direct trigger for this decline was Hengtong Optic-Electric's private placement plan disclosed on the evening of September 24, which aims to raise no more than RMB 6.636 billion for the expansion of optical fiber preform and specialty optical fiber production capacity, sparking a new round of market concerns about oversupply in the industry.

However, UBS simultaneously published a research report, maintaining a "Buy" rating for YOFC H-shares against the trend. It significantly raised its net profit forecasts for 2026-28 by 116%-158% to RMB 9.1 billion, RMB 15.6 billion, and RMB 19.1 billion, respectively. The target price was also raised from HKD 290 to HKD 330, implying an upside potential of approximately 73% from the current share price. UBS believes that market concerns about overcapacity are severely overestimated, as AI-driven data center demand is fundamentally reshaping the supply and demand dynamics of the optical fiber industry, and the tight supply-demand situation for high-end optical fibers will continue until 2027-28. UBS pointed out that YOFC's strategic value as a core player in the global AI supply chain is severely underestimated.