Daiwa Initiates Coverage on YOFC (06869) with Buy Rating and HKD 152 Price Target

Stock News08-11

Daiwa has released a research report initiating coverage on YOFC (06869) with a "Buy" rating and a target price of HKD 152, which corresponds to a projected 10 times forward price-to-earnings ratio for the next year.

Daiwa indicates that YOFC benefits from the current strong upcycle in the fiber optic industry. The firm expects the company to be supported by its technological leadership and the upside potential of its optical interconnection business. The optical interconnection segment's gross profit is forecast to have a compound annual growth rate (CAGR) of 137%, driving a 135% CAGR in net profit from 2025 to 2028.

Regarding overseas operations, Daiwa believes that YOFC's global footprint and close ties with international clients are key advantages for capturing overseas AI infrastructure demand. The bank projects a 109% CAGR in overseas gross profit from 2026 to 2028, with gross margins for the same period estimated at 53%, 56%, and 48%, respectively.

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