Investment Rating - The report assigns a "Sell" rating on YOFC-A due to expectations of soft demand through 2025E [13][16]. Core Insights - YOFC's 1Q25 net profit reached Rmb152 million, exceeding expectations by 19%, driven by strong performance in the datacom segment, particularly from AI and datacenter demand [1][9]. - The datacom segment is projected to grow significantly due to increased capital expenditure from Chinese cloud companies, while the telecom segment remains weak, contributing over 60% of YOFC's revenue in 2024 [2][9]. - A key uncertainty is the upcoming fiber cable tender from China Mobile, which could impact pricing and overall growth momentum [2][13]. Summary by Sections Financial Performance - YOFC's revenue estimates for 2025E have been revised up by approximately 2%, with net profit estimates increased by 7% to 12% [9][10]. - The 12-month price target for YOFC-H is revised to HK$12.5, based on a 9x 2026E P/E, while the A-share target is set at Rmb28.6, based on a 22x 2026E P/E [9][16]. Market Dynamics - The datacom segment is expected to benefit from strong demand, while the telecom market is currently experiencing muted demand [2][13]. - YOFC's pricing estimates for fiber cables in 2025E have factored in a 6% price drop compared to 2024 [2][9]. Future Outlook - The report suggests that a recovery in demand in 2025 could lead to a more positive outlook for YOFC, particularly if the China Mobile tender results in improved pricing dynamics [13][14]. - Key upside risks include stronger-than-expected demand and pricing resilience, which could enhance margins and net profit outlook [14][17].