Yangtze Optical Fibre and Cable Joint Stock Ltd Co

In early trading on September 9, all three major A-share indices rose, and the communications equipment sector became active again. CPO concept stocks rallied at the open, with Zhaolong Interconnect surging by the 20 percent daily limit, Yangtze Optical Fibre and Huagong Tech also hitting their daily limits, and Zecheng Electronics rising more than 12 percent. On the news front, the 2026 China International Optoelectronic Expo is being held in Shenzhen from September 9 to 11. Meanwhile, Goldman Sachs raised its forecast for the global optical module market, expecting it to reach about 67.7 billion US dollars, 131.4 billion US dollars and 148.5 billion US dollars in 2026, 2027 and 2028 respectively, up 33 percent, 81 percent and 115 percent from its previous estimates.

On August 27, the A-share CPO concept climbed steadily during the session. Sai MicroElectronics hit a 20-centimeter limit up, Qingshan Paper and Yangtze Optical Fibre and Cable sealed limit up, while Changxin Bochuang, Focuslight Technologies, and Kingshine Electronic rose more than 10 percent. Changyingtong, Hengtong Optic-Electric, and several other stocks also strengthened. On the news front, after the U.S. market close on August 26 Eastern Time, Nvidia reported better-than-expected earnings. Revenue for the second quarter of fiscal 2027 reached 96.2 billion dollars, up 106 percent year on year and above the market estimate of 92.38 billion dollars. Adjusted earnings per share came in at 2.22 dollars, up 120 percent year on year. Data center revenue was 89 billion dollars, also beating market expectations. On guidance, Nvidia expects third-quarter fiscal revenue to reach a midpoint of 108 billion dollars, up nearly 90 percent year on year and above the analyst estimate of 105.15 billion dollars. Adjusted gross margin is expected to be between 73.5 percent and 74.5 percent. The earnings call also revealed that Nvidia will work with Amazon Web Services to deploy an additional 2 million GPUs across AWS global infrastructure from 2027 to 2028, and expects fiscal 2028 revenue to grow about 70 percent. In addition, Nvidia announced full mass production of its Spectrum-X Ethernet photonics switching platform, marking the move of CPO solutions from technology validation to large-scale manufacturing. Overseas supply chain companies Lumentum and Coherent also disclosed shipment plans for CPO products. Several brokerages gave an optimistic outlook on China's optical communications sector, believing that investment sentiment in AI infrastructure continues to rise.

Premier Li Qiang chaired a State Council executive meeting on August 21, deploying moderately proactive and coordinated efforts to advance next-generation communications network construction, and deliberating and adopting documents including the revised draft regulations on emergency response, investigation, and handling of electric power safety accidents. The application by Yangtze Memory Technologies Holding Company Limited for an initial public offering and listing on the STAR Market was accepted on the evening of August 21, with a proposed fundraising amount of 33 billion yuan. From January to March 2026, the company achieved operating revenue of 47.042 billion yuan and net profit attributable to the parent company of 33.379 billion yuan. On August 22, the 2026 Green Computing Power and Artificial Intelligence Conference was held in Hohhot. Hohhot and Ulanqab signed 13 projects with companies including Volcano Engine and Cambricon, with a total investment of 136.1 billion yuan. Yangtze Optical Fibre and Cable released its 2026 half-year report, with net profit attributable to the parent company of 2.925 billion yuan in the first half, up 888.88 percent year on year. The United States measure imposing an additional 50 percent tariff on some Canadian goods officially took effect at midnight Eastern Time on August 22, and Canada announced it would take full reciprocal countermeasures.

Between the evenings of August 21 and 23, several A-share companies disclosed major matters. Jinlong Shares is planning to transfer its 20% stake in Dongguan Securities, which is expected to constitute a major asset restructuring. Alled is planning to acquire no less than 51% equity in Huizhou Yuanbao Precision Hardware Die Casting through cash transfer and capital increase, also expected to constitute a major asset restructuring. ST Kangjia A will suspend trading from August 24 due to planning a major matter, expected to last no more than five trading days. Jiayuan Technology will be subject to other risk warnings from August 25 because of false records in its prospectus and annual reports, with its abbreviation changed to ST Jiayuan. Huayang Group's controlling shareholder Huayue Investment plans to transfer a 28.3% stake to Jiuzhou Group for 5.66 billion yuan, and the actual controller will change to the Mianyang State-owned Assets Supervision and Administration Commission. Seagull Housing's controlling shareholder Zhongyu Investment plans to transfer a combined 25.01% stake to Botai Chelian and Fuqing Yaohong, and the actual controller will change to Ying Zhenkai. In terms of performance, Zijin Mining's net profit in the first half of the year was 39.17 billion yuan, up 68.17% year on year. Zhongji Innolight's net profit was 13.651 billion yuan, up 241.7%. Yangtze Optical Fibre and Cable's net profit was 2.925 billion yuan, up 888.88%.

Yangtze Optical Fibre released its 2026 interim report, with net profit attributable to the parent company of 2.925 billion yuan, an increase of 2.629 billion yuan from the same period last year, up 888.88% year-on-year. Total operating revenue was 9.809 billion yuan, an increase of 3.424 billion yuan from the same period last year, up 53.64%, marking two consecutive years of growth. Net cash inflow from operating activities was 1.826 billion yuan, up 116.82% year-on-year. The company's latest gross margin was 53.36%, achieving six consecutive quarters of growth, and its latest return on equity was 17.87%, up 15.30 percentage points from the same period last year.

On the evening of August 21, multiple listed companies on the Shanghai and Shenzhen stock exchanges issued announcements. Among them, the IPO review status of Yangtze Memory Technologies Co., Ltd. on the STAR Market was changed to accepted, with a planned fundraising amount of 33 billion yuan. Zhongji Innolight reported semi-annual net profit attributable to the parent of 13.651 billion yuan, up 241.7 percent year on year, and plans to distribute 12 yuan per 10 shares. Yangtze Optical Fibre and Cable reported semi-annual net profit attributable to the parent of 2.925 billion yuan, up 888.88 percent year on year, and plans to distribute 10.6 yuan per 10 shares. Dongshan Precision Manufacturing reported semi-annual net profit attributable to the parent of 2.957 billion yuan, up 290.09 percent year on year. Zijin Mining Group reported semi-annual net profit attributable to the parent of 39.17 billion yuan, up 68.17 percent year on year, and plans to distribute 4.2 yuan per 10 shares. Sea Gull Housing's controlling shareholder Zhongyu Investment plans to transfer 20 percent of the company's shares to Botai Chelian, and 5.01 percent of the shares to Fuqing Yaohong. The company's controlling shareholder will change to Botai Chelian, and the actual controller will change to Ying Zhenkai. Trading in the shares will resume on August 24. Zoneco Group plans to list and transfer an 18 percent stake in Amur Company with a reserve price of 108 million yuan. Dosilicon plans to invest 682 million yuan to build a storage-computing integrated chip research and development project. In addition, Guolian Minsheng President Ge Xiaobo resigned, and Wang Jinling will act as president. Harbin Investment and Longjian Road and Bridge also saw changes in their board secretaries.

Changxin Bochuang's controlled subsidiary, Changxin Sheng (Wuhan) Technology, has signed a long-term cooperation agreement with an existing customer. The estimated sales value during the agreement's effective period is approximately 4.5 billion yuan, accounting for about 178% of the company's audited 2025 revenue, with a performance period extending to December 31, 2030. This transaction involves the sale of a package of fiber optic cable related products to the customer. The company plans to procure and deliver in batches based on the customer's actual orders, and expects to recognize revenue using the net method. Changxin Bochuang's actual controller is Yangtze Optical Fibre and Cable. In the first quarter of 2026, the company achieved revenue of 671 million yuan and net profit attributable to the parent of 130 million yuan, representing year-on-year increases of 24.53% and 45.00% respectively. For the first half of the year, estimated net profit attributable to the parent is between 280 million and 345 million yuan, a year-on-year increase of 66.45% to 105.09%.

At the open on July 20, major A-share indices rallied across the board. The ChiNext Index rose nearly 2%, and the SSE 50 gained over 2%. On the sector front, semiconductors, MLCC concept stocks, CPO concept stocks, memory chips, and optical communications led the gains, while traditional Chinese medicine and white goods were among the laggards. Oil and gas stocks strengthened collectively, with Shandong Molong hitting its daily limit up in a straight line, and Keli Shares and Tongyuan Petroleum following higher. Brent crude topped 91 dollars per barrel, up 3.77% intraday. Computing power leasing concepts were active, with Litong Electronics hitting its daily limit up. In news, Moonshot AI's Kimi suspended new consumer subscriptions to focus on existing subscribers and expand computing power capacity. Kimi concept stocks opened sharply higher, with Jiuan Medical hitting the daily limit up for the fourth time in five sessions, and Mio Exhibition notching its second consecutive limit up. CPO concept stocks fluctuated higher, with Gongjin Shares hitting its daily limit up. Eoptolink Technology expects first-half 2026 net profit of 7 billion to 8 billion yuan, a year-on-year increase of 77.56% to 102.93%. The power sector was repeatedly active, with Huayin Electric Power hitting its second consecutive limit up. Jiangsu's power grid reached a peak load of 157.59 gigawatts, topping the 100-million-kilowatt mark for the tenth consecutive year. In Hong Kong, the Hang Seng Index and Hang Seng Tech Index rose, with Yangtze Optical Fibre and Cable surging over 9% and Alibaba gaining over 5%.

Optical communications leader Yangtze Optical Fibre hit its daily limit up on July 15, with turnover of 6.27 billion yuan and total market capitalisation of 239.3 billion yuan. The company's latest earnings forecast shows estimated first-half net profit attributable to shareholders of the listed company at 2.4 billion to 3 billion yuan, a year-on-year increase of 711% to 914%; net profit after deducting non-recurring items is estimated at 2 billion to 2.6 billion yuan, a year-on-year increase of 1,349% to 1,784%. Yangtze Optical Fibre said the profit growth was mainly driven by accelerating construction of computing power data centres, which boosted demand for new types of optical fibre and cable. The company seized international market opportunities, expanded related businesses, and achieved core customer expansion, product mix optimisation, and improved profitability. A UBS research report noted that the global optical fibre industry is entering a new super cycle, with AI data centres gradually becoming the largest source of demand. It is expected that by 2030, enterprise and data centre demand will account for more than 80%.

Several co-packaged optics companies have reported sharp first-half earnings growth. DSBJ expects net profit of 2.9 billion to 3 billion yuan for the first half of 2026, up 282.58 percent to 295.78 percent year on year. Its traditional businesses in consumer electronics and auto parts remain solid, the integration of its optical module business is showing results, and data center related investments are gradually generating returns. Yangtze Optical Fibre and Cable expects net profit of 2.4 billion to 3 billion yuan, up 711 percent to 914 percent, driven by demand for optical fibre and cable from computing power data center construction. Accelink Technologies expects net profit of 559 million to 615 million yuan, up 50 percent to 65.15 percent, as the AI computing power investment wave drives rapid growth in demand for datacom optical modules. Tongfu Microelectronics has entered the supply chain through advanced CPO packaging technology and expects net profit of 1.6 billion to 1.8 billion yuan, up 288.26 percent to 336.80 percent, with strong growth in the semiconductor industry and rising revenue from mid-to-high-end products boosting performance. ZTT expects net profit of 2.352 billion to 2.508 billion yuan, up 50 percent to 60 percent, as the accelerated rollout of AI computing power and new digital infrastructure improves the profitability of optical communication products. Earlier, Hengtong Optic-Electric, SDGI, and Yongding also disclosed positive profit forecasts. Brokerages believe the AI computing power boom is driving the optical communication industry into a new growth cycle. CICC expects the global optical module market to achieve a compound annual growth rate of 28 percent from 2024 to 2027, with 800G and 1.6T optical modules ramping up rapidly in 2026, bringing both volume and price increases. However, attention should be paid to uncertainties such as fluctuations in downstream capital expenditure and technology iteration.

On the evening of July 14, multiple listed companies on the Shanghai and Shenzhen exchanges issued significant positive announcements. CICC’s application to absorb and merge Dongxing Securities and Cinda Securities has been accepted by the China Securities Regulatory Commission, though the transaction still requires review by the Shanghai Stock Exchange and approval from other regulatory bodies. Several companies disclosed first-half earnings forecasts, with Tianqi Lithium expecting a net profit attributable to shareholders of 2.85 billion to 4.25 billion yuan, a year-on-year increase of 3,276.35% to 4,934.91%; Litong Electronics forecasting a net profit of 650 million to 750 million yuan, up 1,172.53% to 1,368.31%; Yangtze Optical Fibre and Cable projecting a net profit of approximately 2.4 billion to 3 billion yuan, up 711% to 914%; and China Life Insurance anticipating a net profit of about 128.933 billion to 137.119 billion yuan, up 215% to 235%. In addition, Sieyuan Information plans to purchase high-performance computing servers for no more than 5.079 billion yuan, Runjian Co. intends to buy back shares worth 150 million to 300 million yuan, Sunway Communication plans to acquire a 55% stake in Yiyang Electronic Technology for up to 1.1 billion yuan to strengthen its high-end MLCC layout, and Andawell’s wholly-owned subsidiary has signed a memorandum of cooperation with Airbus to initiate the qualification certification process for galley insert products.

On the evening of July 14, several popular stocks including Tianqi Lithium, Litong Electronics, and Yangtze Optical Fibre and Cable issued profit pre-increase announcements. Tianqi Lithium expects net profit attributable to shareholders of the listed company for the first half to be between 2.85 billion and 4.25 billion yuan, a year-on-year increase of 3,276% to 4,935%, mainly benefiting from the development of the new energy industry and downstream demand growth, a significant rise in the average selling price of lithium products, and a substantial expected increase in investment income from its associate SQM. Litong Electronics expects net profit attributable to the parent company for the first half to be between 650 million and 750 million yuan, a year-on-year increase of 1,172.53% to 1,368.31%, with significant growth in its computing power distribution business, narrowing losses in its precision metal structural parts business, and gains from fair value changes and disposal of equity investments. Yangtze Optical Fibre and Cable expects net profit attributable to the parent company for the first half to be between 2.4 billion and 3 billion yuan, a year-on-year increase of 711% to 914%, thanks to the accelerated construction of computing power data centres, increased demand for new types of optical fibre and cable, and the company's expansion into related businesses to achieve profit improvement. Honghe Technology expects net profit attributable to the parent company for the first half to be approximately 332 million to 405 million yuan, a year-on-year increase of 280% to 364%, driven by increased end-market demand leading to higher electronic cloth prices and product mix optimisation. Dongshan Precision expects net profit attributable to the parent company for the first half to be between 2.9 billion and 3 billion yuan, a year-on-year increase of 282.58% to 295.78%, with stable consumer electronics and auto parts businesses, the integration effect of the optical module business emerging, and returns from data centre investments. China Jushi expects net profit attributable to the parent company for the first half to be between 2.784 billion and 3.121 billion yuan, a year-on-year increase of 65% to 85%, as downstream demand for glass fibre increases and both product volume and prices rise. Demingli expects net profit attributable to the parent company for the first half to be between 5.7 billion and 6.5 billion yuan, turning from a loss to a profit year-on-year, driven by the accelerated implementation of AI applications boosting storage demand, rising storage product prices, the company's launch of self-developed enterprise-grade SSD controller chips, and continuous optimisation of its product mix.