Nomura has released a research report reiterating a 'Buy' rating and a target price of 266 Hong Kong dollars for YOFC (06869).

The report references a tender announcement issued by China Mobile (00941) on July 8 for the centralized procurement of ordinary optical cable products for 2026-2027. The procurement volume is approximately 69.2 million core kilometers, with a demand fulfillment period of 9 months following the announcement of the procurement results. This equates to an annual demand of about 92.3 million fiber kilometers. Compared to the procurement volume of 98.8 million core kilometers for the 2025-2026 period, the annual demand has decreased by 6.6% year-on-year.

China Mobile did not disclose the maximum bid price for this tender. However, given recent price increases in the optical fiber industry, Nomura anticipates that this year's bidding prices will rise. In 2025, the weighted average bid price for optical cable products was 53.85 yuan per core kilometer (including VAT), while the price for optical fiber was below 25 yuan. Nomura expects the tender results, along with detailed information on the winning suppliers' prices and share allocations, to be announced within a month.