YOFC (06869) saw its shares surge more than 8% during the morning session, but the trend reversed in the afternoon, with the stock declining over 5%. At the time of writing, the stock was down 2.74%, trading at HKD 159.5, with a turnover of HKD 3.499 billion. The backdrop for this movement is a recovery in optical fiber demand, which is currently driving price increases. A UBS report clearly stated that the sustainability of the current price rise hinges critically on the pace and scale of capacity expansion. If supply-side discipline is maintained, optical fiber prices could stabilize within a healthy range. Conversely, aggressive expansion could trigger a new cycle of oversupply, reminiscent of the 2018-2019 period. UBS channel checks have not yet identified any major capacity expansion announcements, suggesting that the current risk remains manageable. Furthermore, the harsh lessons from the previous cycle have made fiber manufacturers generally more cautious, leading them to postpone major capital expenditure decisions until demand sustainability is more thoroughly verified. However, UBS also emphasized that aggressive capacity expansion remains a key downside risk requiring ongoing and dynamic monitoring.