Yangtze Optical Fibre and Cable (YOFC) shares dropped 5.00% during intraday trading on Wednesday, marking a significant pullback for the optical fiber manufacturer.

The decline comes as analysts raise concerns about the stock's valuation following the completion of a national broadband project in Peru. YOFC's shares have experienced strong momentum recently with a 131.52% return over the past 30 days, but now face questions about sustainability at current price levels. The stock is trading at a P/E ratio of 144.7x, significantly above the Asian communications industry average of 34.7x, and well above analyst target prices of HK$61.83 despite trading around HK$114.

Discounted cash flow analysis suggests a fair value of approximately HK$34.31, indicating the market price may have significantly outpaced fundamental valuations. Investors appear to be taking profits amid these valuation concerns, particularly given the stock's substantial run-up over the past month.