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UOBKH starts YOFC (06869) at "buy" & HK$33.7
UOB Kay Hian initiated coverage on Yangtze Optical Fibre and Cable (YOFC)(06869)
with a "buy" rating, and a target price of HK$33.7, based on 15x 2018 PE.
It said YOFC is the global market leader in optical fibre preform, optical fibre and 
optical fibre cable in terms of sales volume. The company is one of the best proxies to
China's burgeoning investment in wireless and fixed-line communication networks as YOFC's
preform is essential to data transmission infrastructure and it has the fastest capacity 
growth to capture demand growth.
UOBKH forecast YOFC to achieve 13% revenue CAGR and net profit CAGR of 26% for 2017-19.
The earnings growth largely reflects YOFC's product optimisation as revenue contribution 
from higher-margin preform products will increase each year thanks to preform production 
capacity expansion.

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