On July 29, YOFC fell 3.48% in regular trading, trading at 105.7 HKD/share, with turnover of 922 million HKD. The stock has halved from its June high, extending the prior session's sector-wide rout in optical communications names.

The decline is driven by persistent concerns over an industry-wide capacity expansion wave. CLSA recently downgraded YOFC from Buy to Hold, projecting global fiber optic capacity to expand 69% by 2028 and warning the company faces market share erosion risk, with earnings in the near two years likely representing a cyclical peak. Multiple firms including Hengtong Optic-Electric, FiberHome, and others have announced preform expansion plans, intensifying supply-side pressure.

While Morgan Stanley maintains a 230 HKD target price and emphasizes the AI-driven fiber super-cycle earnings trajectory remains intact, short-term sentiment continues to be suppressed by supply expansion expectations and concerns over circular financing risks tied to AI infrastructure spending.

(The above content is based on publicly available market information, generated by a program or algorithm, and is intended solely as a stock movement alert. It does not constitute investment advice or a basis for trading decisions.)