Goldman Sachs Lifts Yangtze Optical Fibre Target Price Amid AI-Driven Growth

Goldman Sachs has increased its target price for Yangtze Optical Fibre and Cable (YOFC) to HK$292, maintaining a 'Neutral' rating. The bank's decision comes after YOFC reported a second-quarter net profit surge of 606% quarter-over-quarter to RMB 2.4 billion, far exceeding market expectations.

The company's gross margin climbed sharply from 41.5% in Q1 to 60.5%, beating estimates and outperforming the same period last year. Goldman Sachs attributes this growth to higher average selling prices for optical fibre products and the product mix upgrade toward AI data center applications.

The bank has also raised its earnings forecasts for YOFC by 44% in 2026, 36% in 2027, and 12% in 2028. Goldman Sachs maintains a positive view on YOFC's transition from traditional telecom markets to higher-value-added data center applications.