Surging Demand for Polarization-Maintaining Fiber Drives YOFC's H1 Net Profit Up 888.88% YoY | Financial Report Insights

YOFC delivered an almost unprecedented performance report for the first half of 2026, with Net profit increasing nearly ninefold year-on-year, confirming the strong return of the prosperity cycle in the optical fiber and cable industry.

The company's announcement revealed that the net profit attributable to shareholders of the listed company in the first half of 2026 reached RMB 2.925 billion, a year-on-year increase of 888.88%, while the net profit after deducting non-recurring gains and losses surged by 1680.48%. Operating revenue also jumped synchronously to RMB 9.809 billion, up 53.64% year-on-year. The company simultaneously announced a cash dividend of RMB 10.6 per 10 shares (including tax), significantly increasing the dividend payout ratio and demonstrating management's confidence in the sustainability of profitability.

Behind this earnings explosion is a structural transformation in optical fiber and cable demand, shifting from telecom-driven to AI-driven growth. Zhuang Dan, Executive Director and President of the company, previously stated that demand for polarization-maintaining fiber is expected to grow by 10 to 20 times in the next one to two years, and the company is working with industry chain partners to jointly promote capacity expansion.

Significant Improvement in Earnings Quality, Verified by Cash Flow

This earnings growth is not only reflected in the scale of Net profit but also in a significant improvement in earnings quality. After excluding non-recurring gains and losses, YOFC's net profit deducting non-recurring items in the first half reached RMB 2.449 billion, a year-on-year increase of 1680.48%, far exceeding the Net profit growth rate, indicating that the performance improvement has strong sustainability.

Net cash flow from operating activities amounted to RMB 1.826 billion, a year-on-year increase of 116.82%, further verifying the authenticity of the profits. The weighted average return on equity (ROE) rose to 19.22%, an increase of more than 16 percentage points from 2.53% in the same period last year. Basic earnings per share were RMB 3.56, compared to just RMB 0.39 in the same period last year.

Regarding the asset-liability ratio, it stood at 47.95% at the end of the reporting period, down from 51.12% at the end of the previous year, indicating a more robust financial structure. Total assets increased by 7.68% from the end of the previous year to RMB 39.154 billion, while net assets attributable to shareholders of the listed company grew by 18.53% to RMB 16.364 billion.

AI Computing Power Drives Demand Surge, Polarization-Maintaining Fiber Becomes Core Growth Engine

In its earnings preview, the company attributed the growth to the continuous increase in domestic and international demand for new optical fiber and cable products driven by the accelerated construction of computing power data centers, as well as the continuous improvement of the industry's supply and demand structure.

The company also explicitly mentioned in its earnings announcement that during the reporting period, it seized opportunities in the international market and vigorously expanded businesses related to computing power data centers, achieving the expansion of core customers, optimization of product structure, and enhancement of profitability. This "global trinity" industrial layout of R&D, production, and service enables the company to fully meet the high-resilience supply demands of the AI era.

In terms of bonds, the company has an outstanding technology innovation bond issued in August 2025, with a balance of RMB 500 million, an interest rate of 1.90%, and a maturity date of August 2028. The current EBITDA interest coverage ratio reached 35.11 times, indicating ample debt servicing capability.

At a special forum of the 2026 World Artificial Intelligence Conference held on July 18, Zhuang Dan stated that data communications (Datacom) accounted for less than 10% of global optical fiber and cable demand in the past. Based on current development trends, this proportion is expected to exceed 50% by 2030. He described this as "a very important change."

Polarization-maintaining fiber is the key category driving this round of performance growth. As Co-Packaged Optics (CPO) becomes the core technology for optical interconnects in the new generation of AI data centers, demand for polarization-maintaining fiber, as a core basic material for CPO systems, has heated up sharply. Zhuang Dan introduced that YOFC is the only enterprise in China to have achieved formal mass production certification for polarization-maintaining fiber. It has ranked first in the domestic market share of polarization-maintaining fiber for five consecutive years and is currently working with industry chain partners to promote capacity expansion.