China optical communication sector update EQUITY: TECHNOLOGY Transceiver Act, new fiber capacity, switch chip localization Quick Note FiberHome (600498 CH, Not rated)'s private placement plan (up to CNY2.91bn) was announced on 11 July 2026, targeting to add 600 tons / year of preform capacity. Relative to the market demand gap driven by global AI infra construction, we think the capacity expansion plans from both the top-tier manufacturers are not aggressive, and the increased capacity is unlikely to trigge ...

Global AI Trend Tracker Quick Note We hosted AI Expert Call #74 on 29 September, featuring an expert from a leading optical communication company. The expert mainly discussed the OCS (optical circuit switch) market outlook and comparisons between different OCS technologies, the BOM cost breakdown of OCS, the market demand and price trend of optical transceivers, and the market trend for CPO (co-packaged optics) and NPO (near-field packaged optics). Key takeaways from the call are below: EQUITY: TECHNOLOGY A ...

EQUITY: TECHNOLOGY Diversified player in optical and energy sectors Earnings upside likely from AI-driven optical fiber sector with accelerating backlog delivery for marine sector Initiate at Buy with SOTP-based TP of CNY40, implying 31% upside We believe Zhongtian Technology (ZTT) is well-positioned as a comprehensive solution provider in both optical communication and energy sectors. As one of China's leading producers of optical fiber and cables, we expect ZTT to benefit from rising data center demand, e ...

EQUITY: TECHNOLOGY What if US content reaches 65% of transceiver BOM cost? Quick Note We have observed considerable volatility in China's optical communication stocks recently, following a Reuters report in early August on potential FCC (Federal Communications Committee) ban on Chinese optical transceivers (Reuters' report ). We discussed in our previous report ( link ) that a lose-lose scenario would involve imposing ban on all new (next-gen) transceivers from Chinese suppliers. In recent days, many invest ...