Core Viewpoint - UBS has raised the target price for Yangtze Optical Fibre and Cable (06869) by approximately 147%, from HKD 17.8 to HKD 44, while maintaining a "Neutral" rating, driven by stabilization in telecom business and rapid growth in data communication business [1][2] Group 1: Revenue Growth Projections - The overall transmission business revenue is expected to achieve a compound annual growth rate (CAGR) of 11% from 2025 to 2028 [1] - Telecom transmission business revenue is projected to bottom out in 2025 with a year-on-year decline of 7%, followed by a growth of 1.5% in 2026, and maintaining an annual growth rate of 4-5% thereafter [1] - Data communication transmission business revenue is anticipated to increase by 57% this year, with a CAGR of 30-40% before 2028 [1] Group 2: Market Dynamics and Profitability - The share of data communication in total transmission revenue is expected to rise from less than 15% in 2024 to 36% in 2028 [1] - The gross margin for data communication optical cables exceeds 50%, which is likely to boost the overall transmission business gross margin from 31.7% in 2024 to 36.5% in 2028 [1] - Initial signs of price recovery have been observed in the second half of 2025, indicating an improvement in supply-demand dynamics despite ongoing demand pressures [1] Group 3: Long-term Growth Potential - UBS believes that the current market sentiment reflects the growth potential of the high-margin data communication business and initial optimism regarding hollow fiber [2] - Hollow fiber is expected to have long-term development potential, with significant revenue contributions anticipated as technology matures over the next 2-3 years, although its short-term impact on profitability remains limited [2]