Hong Kong Stock Market Movement | Yangtze Optical Fibre and Cable (06869) turned down more than 5% in the afternoon. UBS says to watch fiber optic capacity expansion; aggressive expansion may trigger a new round of oversupply.

Tongtong Finance APP learned that Yangtze Optical Fibre and Cable (06869) initially rose over 8% in the morning session, but in the afternoon, the stock price turned down more than 5%. As of the time of writing, it fell 2.74% to HKD 159.5, with a trading volume of HKD 3.499 billion.

On the news front, currently, the demand for optical fiber is recovering, driving prices higher. UBS’s report clearly states that whether this round of price increases can be sustained depends mainly on the speed and scale of capacity expansion. If supply-side self-discipline is maintained, optical fiber prices are expected to operate within a healthy range; conversely, aggressive expansion could trigger a new cycle of oversupply, replicating the history of 2018 to 2019.

UBS channel surveys have not found any major capacity expansion announcements, considering current risks to be within controllable limits. At the same time, the harsh lessons from the previous cycle have made optical fiber manufacturers generally cautious, preferring to delay large-scale capital investments until demand sustainability is more fully validated. However, UBS also emphasizes that aggressive capacity expansion remains one of the key downward risks that require ongoing dynamic monitoring.