YOFC Stretches 4-Day Rally to New High; G Sachs Lifts TP to HKD290

YOFC (06869.HK) +12.400 (+4.780%) Short selling $270.82M; Ratio 6.706% extended its four-day rally to reach another record high. The stock opened 5.6% higher this morning (12th) and widened its gains, hitting an intraday peak of HKD283, a new listing high. It is currently trading at HKD271, up 4.47%, with turnover of 10.5774 million shares, involving HKD2.918 billion.G Sachs published a research report noting that YOFC's revenue in 1Q26 rose 28% YoY to RMB3.7 billion, 8% below the brokers expectation, mainly due to a longer-than-expected ramp-up period for expanded optical fiber preform capacity and contributions from artificial intelligence products. Gross margin improved to 41.5% during the period, significantly higher than 27.8% in the same period last year and 35.7% in 4Q25, and also above the brokers forecast of 39.4%, benefiting from rising prices. Net profit in 1Q26 surged 226% YoY to RMB495 million, but came in below the brokers expectation due to lower-than-expected non-operating gains.The broker believes that, benefiting from the upcycle in optical fiber prices, the companys revenue will improve sequentially in the coming quarters and continue to gain from product mix upgrades toward artificial intelligence data centers and drone applications.G Sachs mentioned that several provincial subsidiaries of China Telecom, including those in Jilin, Jiangxi and Sichuan, announced procurement tenders for FTTR, outdoor optical cables and optical fibers in April and May this year. Among them, China Telecom Sichuan stated that the ceiling price for outdoor optical cable procurement is RMB2,100 per sheath length, indicating a higher average selling price compared with previous tenders. With rising procurement prices, the broker believes YOFC is one of the key beneficiaries of the optical fiber price upcycle and product mix upgrades toward data center applications.Taking into account the 1Q26 results, G Sachs raised its earnings forecasts for YOFC for 2026-2028 by 3%, 6% and 4%, respectively, mainly reflecting revenue growth driven by upgrades toward data center optical fiber and cable products, as well as improved gross margin to reflect stronger pricing power. The broker maintained a Neutral rating and lifted its H-share TP from HKD255 to HKD290. (ad/da)(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2026-05-11 16:25.)