Changes in Hong Kong stocks | Changfei Optical Fiber & Cable (06869) fell more than 5% in early trading, UBS says the market overestimates the risk of fiber overcapacity

Zhitongcaijing · 3d ago

The Zhitong Finance App learned that Changfei Optical Fiber Cable (06869) fell more than 5% in early trading. As of press release, it decreased by 4.09% to HK$187.7, with a turnover of HK$1,791 billion.

According to the news, UBS covered China's fiber optic cable industry for the first time, and believes that investors' concerns about overcapacity and profit peaking in 2027 are significantly overestimated. UBS pointed out that since the stock price peaked in June, Changfei has fallen 37% because investors are worried that the expansion of optical fiber production capacity announced by peers and the new company may cause the company's profits to peak in 2027. However, UBS believes that the risk of overcapacity is limited.

The bank said it raised the target price of Changfei fiber optic cable by 14% from HK$290 to HK$330, reaffirming the “buy” rating. The bank also raised the company's profit forecast, raising the 2026-2028 profit forecast to 9.1 billion yuan, 15.6 billion yuan, and 19.1 billion yuan, mainly reflecting the better-than-expected optical fiber price performance driven by AI and the transformation of the product structure to high-performance optical fiber products.