Popular Analysis of Yangtze Optical Fibre and Cable (06869.HK) in Hong Kong Stock Market

Yangtze Optical Fibre and Cable (06869.HK) has recently become a popular target in the Hong Kong stock market, with core drivers coming from two aspects. First, the company’s rights issue: on December 10, it announced plans to place 70 million new shares at HK$32.26 per share (a 14.93% discount to the previous closing price), with net proceeds of approximately HK$2.23 billion, 80% of which will be used for overseas business expansion [1][2]. Second, the industry-level explosion of AI computing power demand: Changjiang Securities’ research report points out that the growth of global AI computing power demand has driven up the demand for Data Center Interconnection (DCI), and the optical communication industry chain (optical chips, optical modules, fiber optic cables) is in strong demand. As an industry leader, Yangtze Optical Fibre and Cable directly benefits from this [1][2].

From the perspective of market performance, after the news was released, the stock price rose continuously. It closed up by over 10% on December 10, opened nearly 4% higher on December 11, and as of 12:25 midday that day, it was quoted at HK$44.74, an increase of 6.32% [3]. Trading volume simultaneously expanded to 250,300 lots, significantly higher than the daily average, indicating active market trading [3]. The company was also included in the East Money App Hong Kong Stock Popularity List, with increased attention on social media [0].

1. Market Interpretation of the Rights Issue Announcement
   : Although there is a discount on the rights issue price, the market is more concerned about the long-term growth potential brought by the investment direction (overseas business expansion). Combined with the AI industry demand logic, this offsets short-term dilution concerns and drives the stock price upward.
2. Transmission Effect of AI Computing Power Demand
   : The explosion of AI computing power demand not only drives upstream products such as optical modules and optical chips but also extends to infrastructure fields such as fiber optic cables. As an industry leader, Yangtze Optical Fibre and Cable benefits from the upward cycle of the entire optical communication industry chain.
3. Signal of Rising Volume and Price
   : The continuous rise in stock price accompanied by an increase in trading volume indicates that the market has a high degree of recognition of the company’s development prospects, and short-term sentiment is relatively optimistic [3].

• Global AI computing power demand continues to grow, and the optical communication industry is in an upward cycle. As an industry leader, the company is expected to continue to benefit [1][2].
• If the overseas business expansion plan is successfully implemented, it will open up new growth space [1][2].

• Rights Issue Dilution Effect
  : The discount on the rights issue price may bring short-term stock price dilution pressure.
• Demand Sustainability
  : Whether the explosion of AI computing power demand is sustainable remains to be observed. If cloud vendors’ capital expenditures are lower than expected, it may affect long-term demand [1][2].
• Overseas Business Risks
  : Overseas expansion faces uncertainties such as geopolitics and exchange rate fluctuations.

• Stock Code: 06869.HK, Name: Yangtze Optical Fibre and Cable, Listing Venue: Hong Kong Exchanges and Clearing Limited.
• Core Catalysts: Rights issue announcement (net proceeds of HK$2.23 billion for overseas business), AI computing power-driven industry demand growth.
• Recent Performance: Up by over 10% on December 10, up 6.32% to HK$44.74 at midday on December 11, with a trading volume of 250,300 lots [3].
• Market Sentiment: Included in the East Money App Hong Kong Stock Popularity List, with active trading.

• Support Level: Around the closing price on December 10 (approximately HK$41.00-HK$42.00).
• Resistance Level: Around HK$45.00 (possible resistance driven by short-term sentiment).