Nomura has issued a research report reiterating its target price of HK$266 and a "Buy" rating for YOFC (06869).

The report references an announcement made by China Mobile (00941) on July 8 for a centralized procurement tender of ordinary optical cable products for 2026-2027. The procurement scale is approximately 69.2 million core kilometers, with a demand fulfillment period of nine months following the tender result announcement, equating to an annual demand of about 92.3 million fiber kilometers. This represents a 6.6% year-on-year decrease compared to the 98.8 million core kilometers procured for the 2025-2026 period.

China Mobile did not disclose the maximum bid price for this tender. However, given recent price increases in the fiber industry, Nomura anticipates bid prices in this year's tender will rise. In 2025, the weighted average bid price for optical cable products was RMB 53.85 per core kilometer (including VAT), while the price for fiber was below RMB 25.

Nomura expects the tender results, along with detailed information on winning suppliers' prices and share allocations, to be announced within a month.