Optical communication concept stocks experienced another rally. As of writing, YOFC (06869) rose 9.39% to HK$159.6. FIT HON TENG (06088) increased 4.95% to HK$6.78. CIG (06166) gained 4.69% to HK$74.75. TIME INTERCON (01729) was up 3.51% to HK$14.74.

The upward movement is supported by generally better-than-expected 2025 financial results from companies in the optical communication sector. Previously, Zhongji Innolight released a preliminary report showing 2025 operating revenue of 38.24 billion yuan, a year-on-year increase of 60.25%, with net profit reaching 10.799 billion yuan, up 108.81%. Eoptolink forecasted a 2025 net profit between 9.4 billion and 9.9 billion yuan, representing growth of 231.24% to 248.86%. Other companies like Shijia Photonics and TFC Optical Communication also reported significant profit growth.

A research report from Jinrui Securities indicated that the OFC conference provided an optimistic outlook for demand in the optical module industry. The market size is projected to grow 1.5 to 2 times by 2026, with a further doubling expected in 2027. Separately, Arista Networks officially announced the formation of the XPO MSA, introducing a 12.8Tbps liquid-cooled pluggable optical module. This module offers a faceplate density of 204.8Tbps per OCP rack unit, which is four times the density of existing 1.6T OSFP solutions, providing a pathway to extend the lifecycle of the pluggable optical module ecosystem. Furthermore, Lumentum projected an 85% compound annual growth rate for indium phosphide chips from 2026 to 2030, which is beneficial for the upstream optical chip industry.