Analysis of the Reasons for Rising Popularity and Prospects of Yongding Co., Ltd. (600105.SH)

1. Reasons for Popularity and Driving Factors
   : Yongding Co., Ltd.'s rising popularity is mainly driven by three factors. At the sector level, the communication equipment sector continues to gain momentum due to 5G network expansion, data center construction, and growing demand for optical communication technology [0]; at the company level, it has built a full industry chain covering chips, devices, modules, and system integration, with core technical advantages in the optical communication field [1]; at the price momentum level, the stock has risen by 382.23% since the start of the year, with a 91% increase in the past three months and a 63.33% increase in the past month—this strong upward trend continues to attract investor attention [0].

2. Price and Volume Analysis
   : On December 24th, the stock rose 12.37% to 23.34 yuan, with a trading volume of 246.5 million shares, which is basically consistent with the average trading volume of 250 million shares over the past 10 trading days, indicating that the rise is supported by stable capital inflows [0]. Technical indicators show that the stock is in an overbought state, with prices deviating significantly from the long-term moving average; in terms of valuation, the price-to-earnings ratio (P/E) is 102.41x and the price-to-book ratio (P/B) is 10.34x, far higher than the industry averages of 33.2x (P/E) and 2.8x (P/B), reflecting high market expectations while also posing risks of valuation bubbles [0][1].

• The sector’s demand provides long-term support, but the current stock price has significantly overdrawn some growth expectations, highlighting the contradiction between overbought status and high valuation [0].
• This rise in popularity is not accompanied by specific recent positive news from the company; it is more driven by overall sector sentiment and price momentum—future performance needs to be closely monitored to see if it aligns with the current valuation [0].

• Risks
  : Current valuation is far higher than the industry average, with risks of valuation bubbles; the sharp short-term rise has led to an overbought state, facing pressure from profit-taking and callbacks; high valuation requires sustained high growth in performance, but there has been no matching performance yet [0].
• Opportunities
  : The communication equipment sector will benefit from growing demand for 5G and data center construction in the long run, and the company’s full optoelectronics industry chain layout may support future growth—the sector’s dividends still have potential catalytic effects [0][1].

Yongding Co., Ltd.'s popularity stems from sector dividends, its own business advantages, and price momentum. Currently, its valuation is high and it is in an overbought state—short-term volatility risks need to be viewed cautiously; in the long term, the growing demand for the communication equipment sector and the company’s full industry chain advantages are worthy of sustained attention, but performance needs to be closely tracked to verify the rationality of the valuation [0][1].