On July 6, YOFC (Yangtze Optical Fibre and Cable) declined 4.03% in regular trading, trading at HK$182.4/share, with turnover of HK$1.101 billion. The stock extended the optical communications sector's deep correction, following a single-day plunge of over 22% on July 2 when the sector sold off collectively.

On the news front, Nomura flagged accelerating capacity expansion in the fiber optic industry, noting that new entrants such as Han's Laser and GCL-Poly are pursuing high-end products including hollow-core and multi-core fibers. If these players successfully execute expansion plans, competition will intensify and incumbents' margins face pressure. Separately, Corning's Glass Bridge glass optical interconnect platform raised market concerns over long-term demand for midstream fiber components, though the technology only applies to centimeter-scale CPO coupling scenarios and does not replace standard transmission fiber. Short-term funds continue to de-rate sector valuations as multiple headwinds converge. Nomura maintains a Buy rating on YOFC with a HK$266 target price based on 23.7x forward P/E on FY2027 EPS of RMB9.75.

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