On September 29, YOFC rose 3.34% in regular trading, trading at 159.0 HKD/share, with turnover of 621 million HKD, staging a recovery bounce after plunging over 16% in the prior session.

The previous session's sharp decline was triggered by Hengtong Optic-Electric's announcement of a 6.6 billion yuan secondary offering to expand optical communications capacity, which ignited fears of an industry-wide overcapacity cycle. The broader Hong Kong-listed optical communications sector saw heavy selling, with peers such as ZJ Innolight falling nearly 12%.

Providing a counterweight to bearish sentiment, UBS recently initiated coverage on YOFC with a Buy rating and a target price of 330 HKD, arguing that overcapacity risks are significantly overstated. The bank highlighted that AI-driven structural demand for high-end optical fiber will sustain a tight supply-demand balance through 2027-2028, with core equipment bottlenecks delaying new capacity rollouts. UBS raised its net profit forecasts for YOFC to 9.1 billion, 15.6 billion, and 19.1 billion yuan for 2026-2028, substantially exceeding market consensus by 7%-19%.

(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.)