YOFC's stock plummeted 5.13% during intraday trading on Tuesday, extending recent losses in the optical communications sector.

The decline reflects continued sector-wide pressure driven by multiple headwinds. Nomura has flagged accelerating capacity expansion in the fiber optic industry, warning that if new entrants successfully develop high-end products and execute expansion plans, market competition will intensify and incumbent players face margin compression. Additionally, Corning's newly announced glass bridge technology has raised market concerns over long-term demand for midstream fiber optic components, prompting short-term capital to continuously mark down valuations across the sector.

UBS, however, maintained a Buy rating with a HK$290 target price, arguing the pullback is sentiment-driven rather than fundamental, noting new capacity requires 1.5 to 2 years from construction to volume production. Peer companies including Hangzhou Cable reported strong H1 earnings growth, suggesting robust underlying demand persists.