《The Big Bull》Nomura: Longfei (06869.HK) second-quarter profit significantly exceeds expectations; the price increase reflects tight supply and demand

Nomura issued a report saying that Yangtze Optical Fibre and Cable (06869.HK) +2.600 (+1.689%) had short selling of $1.28B, with a ratio of 15.593%. It released a profit forecast for the first half of 2026, expecting net profit to reach RMB 2.4 billion to RMB 3 billion (same below), up 711% to 914% year-on-year. This implies that its second-quarter profit will be RMB 1.9 billion to RMB 2.5 billion, up 1,222% to 1,639% year-on-year. The median of RMB 2.2 billion significantly exceeded the bank’s prior second-quarter estimate of RMB 1 billion. The bank believes the sharp increase in earnings mainly reflects a comprehensive price hike in fiber products for the telecom and data center markets in the second quarter, driven by a surge in demand and limited capacity at major fiber and preform manufacturers. Although the stock has recently seen a notable pullback (down 46% over the past three weeks, versus the Hang Seng Index up 2% over the same period) due to market concerns about faster capacity expansion and intensified competition from potential new entrants, the bank believes the strong earnings guidance will improve market sentiment and bring short-term trading opportunities for the stock.

Related content 《Earnings surprise》Yangtze Optical Fibre and Cable (06869.HK) expects interim net profit to rise 7.11 to 9.14 times year-on-year. Nomura maintains a “Buy” rating for Yangtze Optical Fibre and Cable, with a target price of HK$266. (ad/da)(Hong Kong stock quotes are delayed by at least 15 minutes. Short-selling data as of 2026-07-15 12:25.)