YOFC's stock plummeted 5.30% during afternoon trading on Thursday, marking a sharp reversal from its earlier positive performance in the session.

The decline is set against a backdrop of recovering optical fiber demand that is currently supporting price increases. However, a recent UBS report cautioned that the sustainability of these price gains hinges critically on the industry's capacity expansion discipline. The report notes that if supply-side discipline is maintained, optical fiber prices could stabilize within a healthy range, but aggressive expansion could trigger a renewed cycle of oversupply, reminiscent of the 2018-2019 period.

UBS channel checks have not yet identified any major capacity expansion announcements, suggesting the immediate risk is contained, and manufacturers have grown more cautious following the harsh lessons of the previous cycle. Nonetheless, the potential for aggressive capacity expansion remains a key downside risk that market participants are actively monitoring.