Core Viewpoint - UBS has raised the target price for Yangtze Optical Fibre and Cable (601869) from HKD 17.8 to HKD 44, an increase of approximately 147%, while maintaining a "Neutral" rating. The growth is driven by the stabilization of telecom business and rapid growth in data communication business [1][2]. Group 1: Revenue Growth Projections - The overall transmission business revenue is expected to have a compound annual growth rate (CAGR) of 11% from 2025 to 2028 [1]. - Telecom transmission business revenue is projected to hit a low in 2025, declining by 7% year-on-year, 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 expected 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 anticipated 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 expected to drive the overall transmission business gross margin from 31.7% in 2024 to 36.5% in 2028 [1]. - Supply-side dynamics indicate that suppliers are gradually shifting capacity towards data communication and export orders, improving supply-demand relationships [1]. Group 3: Market Sentiment and Future Outlook - Current market sentiment reflects the growth potential of high-margin data communication business and initial optimism regarding hollow fiber [2]. - UBS believes that hollow fiber has long-term development potential, with expectations for technology maturation and significant revenue contribution in the next 2-3 years, although short-term impacts on profitability remain limited [2].