Sichuan Huiyuan Optical Communications Co., Ltd. (000586) issued an announcement regarding abnormal stock price fluctuations on the evening of April 9. The company clarified that it does not possess manufacturing capacity for quartz optical fiber preforms or quartz optical fibers. All quartz fibers required for its power optical cable production are externally sourced. Furthermore, the firm emphasized that it is not involved in optical fiber cables or optical modules related to computing data centers, cautioning investors about the risks associated with speculative trading based on market themes.
Recently, benefiting from improved prospects in the fiber optic industry and market enthusiasm for computing-related concepts, Huiyuan Optical Communications' share price has shown strong performance. As of the close on April 9, the company's stock price reached 25.12 yuan per share, having risen by the daily limit for five consecutive trading sessions. The cumulative increase over these five days reached 61.13%, pushing the stock price to a record high and bringing the company's market capitalization to 4.9 billion yuan. During the trading session, the stock briefly opened below the limit price. The day's turnover reached 1.337 billion yuan, with a high turnover rate of 28%.
In response to the unusual price movements, Huiyuan Optical Communications stated that its board of directors has conducted a comprehensive review. The company confirmed that its current operations are normal, with no significant undisclosed matters or violations of fair information disclosure rules.
The company clarified that it has noted recent market attention on supply-demand improvements for fiber optic products and on fiber cables and optical modules related to computing data centers. However, Huiyuan Optical Communications currently has no business operations, outstanding orders, or technological reserves in these areas.
The company further explained that its main businesses include power optical cables, online monitoring devices for power systems, and plastic optical fibers. It does not manufacture quartz optical fiber preforms or quartz optical fibers, sourcing all necessary quartz fibers externally for power optical cable production. Its power optical cables are primarily used in supporting power market infrastructure, while plastic optical fibers are mainly applied in decorative lighting, industrial control, and consumer electronics. The supporting industrial optical devices operate at speeds below 100 megabits per second, used for sensor units in automated production lines and control signal transmission in high-voltage frequency converters—not for the high-speed optical modules required in data centers or AI computing.
The announcement also included a risk warning, noting that the company's stock price has recently experienced significant volatility and its price-to-earnings ratio is excessively high. It cautioned that a sharp decline in the stock price and valuation metrics could follow the substantial recent increases.
According to a previously disclosed earnings forecast, Huiyuan Optical Communications expects a net profit attributable to shareholders of between a loss of 1.5 million yuan and 3 million yuan for 2025. The company attributed the reduced loss to increased sales revenue from its fiber optic cable and online monitoring businesses compared to the same period last year, as well as a 2 million yuan subsidy received by a subsidiary recognized as a "Specialized, Refined, Distinctive, and Innovative" small giant enterprise, which was recorded as non-recurring gain.
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