YOFC (06869) saw its shares drop more than 8% during the morning trading session, marking a decline of over 25% from its previous historical high of HK$283. At the time of writing, the stock was down 7.29%, trading at HK$211 with a turnover of HK$2.161 billion.

Market sentiment has been influenced by recent developments in the sector. Shares of Japanese optical fiber cable manufacturer Fujikura nearly halved in the week ending May 20. Growing market concerns suggest that some data center projects are experiencing delays due to material bottlenecks and supply chain constraints. Since May 13, other optical fiber cable makers Furukawa Electric and Sumitomo Electric Industries have also underperformed Japan's benchmark Nikkei 225 index.

In a recent research report, UBS noted that YOFC's first-quarter net profit was 495 million yuan, falling short of market buy-side expectations ranging from 800 million to 1 billion yuan. The bank anticipates a negative market reaction in the near term. However, UBS expressed confidence in the company's profit growth over the coming quarters, believing that the full impact of rising optical fiber prices will take time to materialize. With data center demand continuing to increase, the bank believes YOFC is well-positioned to meet its full-year forecasts.