To The Moon

Trading activity in the A-share market has notably contracted, with volumes shrinking to 1.82 trillion yuan today (August 26). This consolidation largely reflects investor uncertainty and a collective wait-and-see stance ahead of several pivotal developments. However, beneath this cautious surface, the structural opportunities within individual stocks are proving more resilient than many anticipate.

As August draws to a close, a wave of popular stocks in the AI computing power, optical communications, and CPO sectors have surged to their daily limit. Notable examples include Hangzhou Cable Co., Ltd. (603618), Cambridge Industries Group (603083), and Qingshan Paper Industry Co., Ltd. (600103). Some of these companies are being propelled by better-than-expected interim earnings reports, while others are attracting renewed capital inflows after prolonged declines. This raises a critical question: will a new, large-scale rally in the optical communications and CPO sectors be ignited by these leading stocks? This article delves into that very topic.

Market Rebounds on Supportive Catalysts

The consecutive low trading volumes of 1.8 trillion yuan on August 25 and 26 are a significant indicator, marking a four-month low. This occurs at a critical juncture where the market's oversold rebound is faltering, sending a mixed signal. It suggests both a temporary exhaustion of selling pressure and a decline in trading willingness, with investors becoming increasingly cautious.

Compared to the previous days, today's market shows some positive shifts. Supportive factors, such as corporate earnings reports and policy hints, are converging, leading to a weak rebound after the volume contraction. The ChiNext Index appears to be stabilizing and bouncing off the 3400-point level. Furthermore, several popular stocks in the optical communications and CPO sectors have hit their daily price limits.

For instance, Hangzhou Cable announced a net profit of 393 million yuan, a staggering 938.67% year-on-year increase, and its share price subsequently gapped up and hit the daily limit on August 26. Notably, the well-known retail investor Zhang Jianping has become the company's third-largest circulating shareholder, holding 24.32 million shares valued at 1.213 billion yuan.

Similarly, Qingshan Paper has recorded two consecutive limit-up moves on August 25 and 26. While nominally a paper manufacturer, the company is deeply integrated with the optical communications industry, with its optical module products delivering high-margin profits in the first half of the year. Its shareholder roster at the end of Q2 reveals new positions taken by major foreign institutions like Goldman Sachs, Morgan Stanley, and UBS.

Cambridge Industries Group is another typical example, having emerged as a core leader in optical communications with a peak gain of over 700% between April 2025 and June 2026. After a nearly 50% correction in July, it is now showing signs of a "bull market pullback." On August 26, the company's stock hit a 10% limit-up, bringing its August gains to nearly 50%. Its latest financial report shows a net profit of 328 million yuan for the first half of the year, a 171.08% increase year-on-year.

As seen with companies like Hangzhou Cable and Cambridge Industries, during this earnings season, capital is no longer ignoring strong fundamentals but is selectively increasing positions in such stocks. Many core leaders in AI computing power, optical communications, and semiconductors are also experiencing strong rebounds. For example, Hua Hong Semiconductor surged nearly 8%, and SMIC also saw its stock price rally.

Beyond earnings, other factors are aiding market sentiment recovery. On the policy front, the Ministry of Industry and Information Technology has stated it will accelerate the planning and construction of next-generation communication and computing power networks. Additionally, Shanghai's "15th Five-Year Plan for Accelerating the Construction of an International Trade Center" highlights a focus on integrated circuits and artificial intelligence. In overseas markets, US tech giants have recently shown a structural rebound, with optical communications leader Lumentum rising nearly 7% on August 25. News of a potential US-Iran ceasefire agreement also contributes to a more positive market environment.

Market Awaits Key Decisions; Optical Fiber Opportunities Emerge

Beyond Hangzhou Cable, other companies like Shenzhen SDG Information Co., Ltd. (000070), which hit its daily limit on August 25, Yangtze Optical Fibre and Cable Joint Stock Limited Company (601869), and its Hong Kong-listed counterpart YOFC (6869.HK), which surged over 15% on August 25, have all performed well. This collective strength highlights a specific sub-sector within the optical communications track: optical fiber.

The growth in fiber product profitability is a key driver behind Hangzhou Cable's strong first-half performance. Optical fiber serves as the physical transmission foundation for AI computing power. Driven by demand from AI data centers, the market space for optical fiber has been fully unlocked. Across the industry chain, from upstream materials to midstream manufacturing and downstream applications, related stocks have recently attracted increased capital attention.

Looking at full-industry-chain leaders, YOFC's OM4, OM4Pro, and OM5 mid-to-high-end multimode fiber products are widely used in data centers both domestically and internationally, holding the world's largest market share. Hengtong Optic-Electric Co., Ltd. (600487) has deployed its optical fiber and cable products on a large scale in data centers at home and abroad, with its AI advanced optical fiber material R&D and manufacturing center expansion project progressing steadily. Yongding Co., Ltd. (600105) has established a complete industry chain layout from optical preform to fiber and cable, while Fiberhome Telecommunication Technologies Co., Ltd. (600498) possesses core capabilities across the "preform-fiber-cable" value chain.

In the upstream materials segment, Tangshan Sanyou Chemical Industries Co., Ltd. (600409) has a combined annual production capacity of 30,000 tons of high-purity silicon tetrachloride, used in optical fiber preforms and synthetic quartz. Jiangsu Pacific Quartz Co., Ltd. (603688) supplies the optical fiber industry with a full range of supporting materials, including high-purity extension tubes, handle rods, and furnace core tubes. In the optical fiber device segment, Zhisheng Optoelectronic Technology Co., Ltd. primarily focuses on fiber optic connectors.

Besides optical communications and CPO, the market is also concentrating on other directions. In the pharmaceutical sector, CanSino Biologics Inc. (688185) hit a 20% limit-up today, securing its third limit-up in five trading days since August 20, accumulating a gain of nearly 60%. This is driven by positive company-specific news, such as a newly signed agreement for the development of an mRNA tumor vaccine. Also, Tellgen Corporation (300642), highlighted on August 25, surged as much as 16% today before pulling back. Other sectors showing activity include brokerages, with Xiangcai Securities and Guoyuan Securities rebounding strongly, and chemicals, with Jiangtian Chemical up over 40% from August 17 to 26 after reporting a 22,955.37% surge in first-half net profit.

However, a definitive market-leading theme that can anchor the broader index is still absent. This is partly due to weakening momentum after the technical rebound, but more importantly, the market is waiting for key "shoes to drop." This includes Nvidia's Q2 FY2027 earnings report due on August 26 and the Federal Reserve policy signals expected from the Jackson Hole Economic Policy Symposium scheduled for August 27-29.