长飞光纤光缆 (6869.HK): Yangtze Optical Fibre and Cable: Overcapacity concerns overdone; AI opportunity underappreciated

We assume coverage on YOFC with a Buy rating. The share price has declined 37% since its June peak as investors worried about fiber capacity expansion announced by peers and new entrants, but we believe overcapacity risk is limited given YOFC's better positioning than Chinese peers in expanding into the global data center market with higher-performance fiber products from years of R&D investment, and because peer/new-entrant capacity expansion may take longer than expected due to supply bottlenecks of key production equipment and customer verification. We see structural supply tightness in high-end fiber persisting through at least 2027-28E, with demand increasingly driven by global AI-related infrastructure rollouts rather than domestic telecom capex. We raise 2026-28E earnings by 116-158% to Rmb9.1/15.6/19.1bn, with gross margin sustained above 70%, and our 2027/28E estimates are 7%/19% above consensus. We reiterate Buy with a price target of HK$330 based on 16x 2027E P/E (from HK$29