Investment Rating - The report assigns a "Buy" investment rating for the company, marking its first coverage [9]. Core Insights - The company is focusing on improving its main business and expanding the application of new optical fiber technologies, driven by the growing demand from data centers and AI construction [4][6]. - Despite facing pressure in the telecom market, the company is seizing structural opportunities by expanding into new applications such as metropolitan area networks and direct connections for computing clusters [5]. - The company is making forward-looking investments in hollow-core optical fibers, which have the potential to become a core technology for next-generation optical networks [6]. Financial Performance - In the first half of 2025, the company achieved a revenue of 6.384 billion yuan, a year-on-year increase of 19.38%, while the net profit attributable to shareholders decreased by 21.71% to 296 million yuan [4]. - The company’s non-deductible net profit increased by 14.75% to 138 million yuan [4]. - The company is expected to see revenue growth from 14.193 billion yuan in 2025 to 18.008 billion yuan in 2027, with corresponding EPS increasing from 1.23 yuan to 2.04 yuan [7][11]. Market Dynamics - The demand for standard single-mode optical fibers in the telecom market is declining, leading to a decrease in average prices [5]. - The company won a significant share of a centralized procurement by China Mobile for G.654.E optical cables, amounting to 3.1386 million core kilometers, which is expected to boost business growth [5]. Future Outlook - The company is positioned to benefit from the ongoing demand for optical fiber products driven by the expansion of data centers and advancements in AI technology [4][9]. - The hollow-core optical fiber technology is anticipated to be a game-changer, with the company making substantial progress in its research and commercialization [6].

Core Viewpoint - Changfei Fiber Optics (601869) and its subsidiary are experiencing significant stock price increases due to advancements in fiber optic technology and strong market demand driven by AI and data centers [1] Group 1: Company Performance - Changfei Fiber Optics' stock rose over 6% and is currently trading at 57.2 HKD with a transaction volume of 2.457 billion HKD [1] - The company secured a 50% share in a centralized procurement of G.654.E optical cable products by China Mobile, which totaled 3.1386 million core kilometers [1] Group 2: Industry Developments - A new type of hollow-core fiber developed by the Lumenisity research team, supported by Microsoft, has achieved the lowest signal attenuation level ever recorded, marking a significant breakthrough in optical communication technology [1] - The demand for optical fibers is accelerating due to the increasing interconnect needs of AI-driven data centers, prompting major companies, including Microsoft and domestic firms, to expedite their investments in hollow-core fiber technology [1] Group 3: Product Performance - As data center clusters grow in scale, the performance requirements for optical fiber products, such as effective transmission distance and latency, have increased [1] - Changfei's high-end multimode fibers and its subsidiary Changxin Bochuang's MPO jumpers and AOC components used in data centers have all seen performance growth [1]

Group 1 - The core point of the article highlights a significant breakthrough in optical communication technology with the development of a new type of hollow-core fiber by the Lumenisity research team, supported by Microsoft, achieving the lowest signal attenuation level ever recorded [1] - The optical fiber industry is accelerating its evolution due to the increasing demand for interconnected data centers driven by AI, with major companies, including Microsoft, intensifying their investments in hollow-core fiber technology [1] - In June, China Mobile conducted a centralized procurement for G.654.E optical cable products, with a total procurement volume of 3.1386 million core kilometers, and Longi Fiber Optic secured a 50% share of this procurement [1] Group 2 - As data center clusters grow in scale, the performance requirements for optical fiber products, such as effective transmission distance and latency, have significantly increased, leading to growth in Longi's mid-to-high-end multimode fibers and optical interconnect components [1] - Longi's subsidiary, Changxin Bochuang, has seen performance growth in products like MPO jumpers and AOC used in data center markets [1]