Yangtze Optical Fibre and Cable (06869.HK) Hot Stock Analysis: AI-Driven Performance Growth and Valuation Balance

Yangtze Optical Fibre and Cable (06869.HK) is the world’s largest supplier of optical fiber preforms and optical fibers, and the second-largest supplier of optical cables globally [1]. Since 2025, the company’s stock price has risen by approximately 3x in the past six months, becoming a hot spot in the Hong Kong stock market [0]. Key driving factors include:

1. AI and Data Center Demand Surge
   : AI computing power demand has driven data communication business to become the core growth engine [3][7];
2. Significant Performance Growth
   : In Q1 2025, net profit increased by 161.9% year-on-year, and overseas market revenue grew by 19.4% year-on-year in the first half of 2025 [0];
3. Institutional Support
   : UBS raised its target price by 147% to HK$44 [3], DBS raised its target price to HK$40.3 [4], and Huatai Securities maintained an “Overweight” rating [5].

• Cross-border Transformation
  : The AI wave has driven the company to transform from a traditional telecom supplier to an AI infrastructure participant [7];
• Business Structure Upgrade
  : Data communication business has replaced traditional telecom business as the main growth driver [3];
• Institutional Consensus
  : Although some institutions believe the valuation is sufficient, most have raised their target prices, reflecting confidence in long-term growth [3][4][5].

• Opportunities
  : Sustained AI demand, global market expansion, leading technological advantages [0][7];
• Risks
  : Short-term valuation pressure (e.g., DBS’s “Fully Valued” rating), industry competition, supply chain fluctuations [4].

Yangtze Optical Fibre and Cable has become a hot spot due to its leading technological position and AI-driven performance growth. Investors should pay attention to the growth of data communication business and the progress of global expansion, while considering the valuation level [0][3][4][7].