Goldman Sachs YOFC (6869.HK): AI Data Center Growth to Drive Optical Fiber Growth and Mix Upgrade; 2Q26 NI Better than Expected; Neutral
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Key Views
Goldman Sachs expects YOFC to continue benefiting from the optical fiber pricing upcycle and views specification upgrades for CPO/NPO high-speed interconnects favorably. China G652.D fiber prices dipped slightly to Rmb81.9/fkm in May 2026 (from Rmb83.4 in March) but remain well above approximately Rmb15.5/fkm in May 2025, supported by data center and defense demand.
The firm's base-case supply-demand analysis projects a 4% demand CAGR versus 6% supply growth for 2025–30E, with the supply-demand imbalance reversing by 2028E.
Outlook
Goldman Sachs raised 2026–28E net income forecasts by 11%/8%/7%, reflecting higher data center customer revenue, with gross margin lifted by 1.2/0.7/1.1 percentage points. The target price is unchanged at HK$290, based on a discounted 2029E P/E of 16.4x (previously 17.7x).
Recommended Securities
- YOFC (6869.HK): Neutral; 12-month target price HK$290.
Key risks include fiber price fluctuations, AI capex changes, competition intensity, and HCF commercialization pace.
Key exhibits
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