YOFC (06869.HK) Hot Stock Analysis: Technological Leadership vs. Valuation Divergence

This analysis is based on reports from Sina Finance and Hexun.com[1][2], released on January 7, 2026. As of press time, YOFC’s Hong Kong stock (06869.HK) rose 7.57% to close at HK$52.75, leading the gains in the optical communication concept stock sector. Over the same period, Cambridge Technology (06166.HK) rose 4.38% in tandem. The company’s A-share (601869.SS) closed at RMB117.76, up 3.37% for the day[0][1]. From a technical perspective, between November 2025 and January 2026, the company’s A-share price started from RMB84, peaked at RMB131.50, with a cumulative increase of over 40%, and a 60-day gain of 40.17%, showing a typical strong breakout trend[0].

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YOFC has achieved milestone progress in the field of hollow-core fiber, becoming the only domestic enterprise capable of mass-producing hollow-core fiber. It has successfully assisted China Mobile, China Telecom, and China Unicom in launching the first commercial hollow-core fiber line[5][6]. Notably, the unit price of hollow-core fiber is approximately 2000 times that of ordinary single-mode fiber; once mass production is scaled up, it will significantly improve the company’s overall gross profit margin. Meanwhile, at the performance briefing held on December 26, 2025, the company officially launched an all-optical network solution centered on AI new-type fiber featuring “Three Ultras” (ultra-large capacity, ultra-low latency, ultra-low loss), and significantly improved transmission distance and system capacity through G.654.E fiber, providing key technical support for the construction of ultra-long-haul backbone networks and metropolitan area networks[3][4].

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Broadex Technology (now renamed “Changxin Bochuang”), acquired in July 2022, has become an important profit growth driver for the company. In the first three quarters of 2025, Changxin Bochuang achieved a YoY net profit growth rate of 566.59%, with the optical interconnection business recording a gross profit margin of 40.7% in the first half of the year and revenue growing 54.6% YoY[5][6]. This performance reflects the foresight and correctness of the company’s layout in the optical module track, especially amid the current wave of AI computing power construction, where demand for optical modules is experiencing explosive growth.

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In the first half of 2025, the company’s overseas revenue reached RMB2.7 billion, up 52.8% YoY, and the proportion of overseas business in total revenue climbed to 42.3%[6]. The company currently has 8 overseas bases in 6 countries including Indonesia and South Africa, and its internationalization strategy has achieved remarkable results, effectively reducing the risk of dependence on a single market.

Despite the strong performance of the company’s stock price, fundamental data shows obvious divergence characteristics. In the first three quarters of 2025, the company achieved operating revenue of RMB10.275 billion, up 18.18% YoY, while net profit only reached RMB470 million, down 18.02% YoY[4]. This phenomenon of “growing revenue without growing profit” reflects that the traditional optical transmission business is facing significant gross profit margin pressure; the company previously disclosed that the gross profit margin of traditional business fell 4.5 percentage points YoY. From a valuation perspective, the rolling P/E ratio of the company’s A-share is as high as about 169 times, far exceeding the industry average, and the stock price may have fully reflected the market’s optimistic expectations for the AI fiber concept[4].

In addition, the company experienced extreme volatility with 3 daily limit-ups in 4 days in December 2025, which attracted the exchange’s attention and led to the release of a stock trading abnormal fluctuation announcement. In the announcement, the company clearly warned that “the proportion of new products related to data centers in total demand is small”, and the market needs to be wary of the gap between concept hype and actual business contributions[4]. At the shareholder level, although the scale of Changjiang Communication’s reduction of 1.1 million shares (accounting for 0.14% of total share capital) is limited, it also reflects industrial capital’s cautious attitude towards the company’s short-term stock price[9].

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The case of YOFC reveals the profound structural changes taking place in the optical communication industry. The traditional fiber optic cable business is facing overcapacity and price competition pressure, and the overall profitability of the industry is under pressure; however, the wave of AI data center construction has brought new growth momentum to the industry, especially the demand for low-loss, high-bandwidth fiber is experiencing explosive growth. Hollow-core fiber technology represents the core direction of next-generation optical communication, and its physical characteristic advantages in reducing latency make it an ideal choice for interconnection in AI supercomputing centers. As the only domestic enterprise with mass production capabilities, the company enjoys a significant first-mover advantage in this niche track.

From an industrial chain perspective, the explosive growth of Changxin Bochuang (optical module business) forms a good synergistic effect with the parent company. As a core component for internal interconnection in data centers, the demand growth for optical modules directly benefits from the construction of AI computing power infrastructure. The subsidiary’s performance growth rate of up to 566.59%, far exceeding the industry average, indicates that the company’s external M&A strategy is delivering expected results. This dual-drive model of “fiber optic + optical module” is expected to reshape the company’s profit structure and improve its overall valuation level.

A research report from Kaiyuan Securities points out that demand and prices in the fiber optic cable industry are in a stage of steady improvement, and a short-term supply shortage may occur[8]. This judgment is mutually corroborated by the company’s 52.8% growth rate in overseas business, indicating that global investment in optical communication infrastructure is accelerating. However, investors also need to note that the company’s management poured “cold water” on market expectations at the performance briefing - demand related to the telecommunications market is still under pressure, and the proportion of new products related to data centers is still small. Although this statement seems conservative, it also reflects the management’s prudent attitude towards concept hype.

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: The rolling P/E ratio of the company’s A-share is as high as 169 times, at a historical high, with a significant premium compared to the industry average valuation. Historical experience shows that when market sentiment drives the stock price away from fundamental support, the risk of a correction will rise significantly.

: The divergence between 18.18% revenue growth and 18.02% net profit decline reveals that the company’s profitability is deteriorating. If the gross profit margin continues to be under pressure, the sustainability of the stock price increase will be questioned.

: The company has clearly warned that “the proportion of new products related to data centers in total demand is small”[4], reminding investors not to equate long-term vision with current performance contributions. Although hollow-core fiber is technologically leading, large-scale commercialization still takes time, and its actual contribution to revenue will be limited in the short term.

: The extreme volatility of 3 daily limit-ups in 4 days in December 2025 reflects the high activity of speculative funds, and the stock price fluctuates sharply, so the risk of chasing highs cannot be ignored.

: Although the scale of Changjiang Communication’s share reduction is limited (0.14%), industrial capital’s share reduction behavior often has signal significance and may affect market confidence.

: The mass production capacity of hollow-core fiber has built a high technological barrier for the company, and against the backdrop of domestic substitution, it is expected to gain more market share.

: The construction of AI data centers worldwide is in a period of rapid expansion, and demand for high-performance fiber will continue to grow. The company’s deployed product lines such as AI new-type fiber and G.654.E fiber are exactly in line with this trend.

: The explosive performance of Changxin Bochuang provides a new growth engine for the company, and its 54.6% revenue growth rate and 40.7% gross profit margin show good profit prospects for this business.

: The proportion of overseas business has increased to 42.3%, and the 52.8% growth rate indicates that the internationalization strategy is entering a harvest period, which helps to diversify regional market risks.

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YOFC (06869.HK) becoming a hot stock is the result of the superposition of two factors: concept hype and fundamental improvement. The company’s layout in cutting-edge technology fields such as hollow-core fiber and AI new-type fiber is in line with the industry trend of AI data center construction, the optical module business of its subsidiary Changxin Bochuang is experiencing explosive growth, and overseas business expansion has also achieved remarkable results. However, investors need to objectively view the challenges currently facing the company: the 169x valuation level has already pre-emptively discounted future growth expectations, net profit is declining YoY while revenue is growing, the gross profit margin of traditional business is under pressure, and the company has clearly warned that the proportion of data center-related products is still small. From a trading perspective, the stock has seen a large short-term increase and sharp fluctuations, so it is recommended that investors remain rational, pay attention to subsequent changes in trading volume and performance realization, and avoid blindly chasing highs.

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[0] Jinling Analysis Database - Market Data and Technical Indicators
[1] Sina Finance - Optical Communication Concept Stocks Rebound, YOFC Rises Over 7%
[2] Hexun.com - Optical Communication Concept Stocks Rebound, YOFC Rises Over 7%
[3] AAStocks - YOFC Improves Transmission Distance and System Capacity via G.654.E Fiber
[4] Gelonghui - YOFC Stock Trading Abnormal Fluctuation Announcement and Performance Briefing
[5] Sina Finance - Securing the National First Place, YOFC Makes a Splash
[6] Eastmoney Wealth Account - In-Depth Analysis of YOFC
[7] Gelonghui - Hong Kong Stock Volatility: Entire Optical Communication Sector Pulls Back
[8] AAStocks - Kaiyuan Securities Research Report: Fiber Optic Cable Demand and Prices Steadily Improving
[9] Eastmoney - YOFC Shareholder Reduction Announcement