HK Stock Market Move | YOFC (06869) dropped nearly 15% after its performance results, with UBS indicating that its first-quarter profits were below market expectations. The rise in fiber optic prices may take some time to fully reflect.

YOFC (06869) fell nearly 15% after performance, falling 13.39% as of press time, reporting 199.9 Hong Kong dollars with a turnover of 7.215 billion Hong Kong dollars. On the news front, YOFC released first-quarter results, with operating income of 3.695 billion yuan, a year-on-year increase of 27.70%; net profit attributable to the parent company was 4.95 billion yuan, a significant increase of 226.40% year-on-year; net profit attributable to the parent company after deducting non-recurring gains and losses was 4.61 billion yuan, an increase of 966.44% year-on-year. UBS issued a research report stating that YOFC's first-quarter net profit was 4.95 billion yuan, lower than the market's buy-side expectations of 8-10 billion yuan, expecting a negative market reaction in the short term. However, the bank remains confident in the company's future earnings growth, believing that the increase in fiber optic prices needs time to fully reflect and the continuous increase in data center demand. The bank believes that the company is expected to achieve the bank's full-year forecast. The bank maintains its profit forecast and target price of 290 Hong Kong dollars unchanged; maintaining a "buy" rating.