Breaking good news! 000586, 000720! Both hit three consecutive limit-ups!

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‍Today (April 7th), the market experienced a shrinking and volatile fluctuation, but the rotation characteristics of mainstream sector stocks are very obvious, such as optical communication and optical fiber, with leading companies like Longfei Fiber and Hengtong Optoelectronics continuing to surge higher, and mid- to low-priced stocks like Huiyuan Communications, Tongding Interconnection, and Huamai Technology hitting the daily limit. Opportunities in optical communication and optical fiber are further spreading downward.

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So, are there still opportunities in optical communication and optical fiber? What are the characteristics of leading stocks like Longfei Fiber? How did our old friend—Bian Huizong—manage to identify targets like Longfei Fiber so early with foresight?

Optical communication and optical fiber secondary market:

Longfei Fiber hits new highs, mid- and low-priced stocks hit the daily limit

Today’s market performance was not as bad as expected; it was quite steady overall. The index opened slightly higher and then differentiated, showing signs of bottoming out and rebounding during the session, with a lower shadow line, indicating active capital entry. However, trading volume further shrank (down to 1.6 trillion yuan), as the market awaits a relatively clear turning point signal regarding the Middle East conflict.

There is a saying in investing—Time smooths out fluctuations and also amplifies gains. The underlying message is that long-term investing can reduce the impact of short-term uncertainties. When the direction is correct, it can also reward you more significantly. Recently, if you have stuck to the long-term track of optical communication and optical fiber, you may have already outperformed a large part of the market.

With emotional recovery, the hard technology sector often presents opportunities and becomes a key target for funds, such as today’s widespread surge in optical communication and optical fiber concept stocks. For example, Huiyuan Communications (000586, 3 daily limits), Xinneng Taishan (000720, 3 daily limits), Tongding Interconnection, Huamai Technology, Quartz Shares (intraday limit), Tongguang Cable, Zhongtian Technology, and others all experienced strong surges.

Currently, the optical fiber secondary market shows the leading giants (such as Longfei Fiber, which has increased tenfold in a year) taking the lead, with mid- and low-priced leaders accelerating rotation. Stock opportunities are further expanding.

Looking at a longer cycle, the optical fiber index has performed better than the broader market and has risen strongly—since establishing a low point at the end of November last year, the optical fiber index has increased by over 130% (see Figure 1).

In the past month, among Wind’s optical fiber component stocks, Longfei Fiber, Huiyuan Communications, and others have led strongly (see Figure 2).

Regarding investment opportunities in optical fiber, Bian Huizong has been closely tracking and researching these for a long time. For example, as early as December last year, he clearly indicated signs of an upward inflection point in the optical fiber cycle, with prices and capacity utilization rates validating each other. AI demand has squeezed traditional optical fiber capacity, leading to rising fiber prices. As supply and demand gaps further widen in the future, price increases are expected to spread further. AI data center fiber consumption is ten times that of traditional data centers, and with DCI orders increasing, a billion-level incremental market has already opened.

Additionally, Bian Huizong had long ago identified leading stocks in optical communication and optical fiber, such as Longfei Fiber and Hengtong Optoelectronics. Both stocks were key case studies in his “Bian Learning and Doing” series on May 28, 2025, and both subsequently experienced major upward waves. Similarly, Yuanjie Technology, which also aims for a tenfold increase in a year, was included in his research case on June 18, 2025.

So, as a super mainline with repeated rotation trends, where are the excess opportunities in optical communication and optical fiber going forward? How did Bian Huizong proactively identify targets like Longfei Fiber and Yuanjie Technology? What features do companies that can produce big bull stocks have that can be identified early?

Optical fiber industry chain:

Rising in volume and price, with fundamentals accelerating

As the core transmission medium of optical communication systems, the optical fiber sector’s continuous and widespread rise is driven by multiple favorable factors such as industry growth, price increases, and technological iteration. One of the key recent drivers is the expanding supply-demand gap driven by AI data center demand.

Specifically, fiber prices are still rising. Latest data shows that as of April 6, 2026, the price of G652.D optical fiber in China has increased by over 400% from last year’s lows.

Behind the fiber price increase is the ongoing widening of the supply-demand gap. On one hand, there is explosive demand growth, such as AI computing power, with global cloud providers increasing capital and building AI data centers, driving fiber demand surge. On the other hand, there are capacity bottlenecks on the supply side, such as the long 18-24 month expansion cycle for optical fiber preform rods. According to CRU estimates, by 2026, global demand for optical fiber will reach 577 million core kilometers, with effective supply only at 397 million core kilometers, leaving a shortfall of 180 million core kilometers, or over 16%.

The demand for technological iteration continues to grow, increasing growth opportunities for optical fiber. From a classification perspective, optical fiber and cable can be divided into solid core fiber, multi-core fiber, special fiber, and hollow core fiber. Currently, commercial speed of hollow core fiber is accelerating, multi-core fiber multiplexing technology is making breakthroughs, and these are driving the continued heating of the optical fiber sector.

From the industry chain perspective, the optical fiber industry chain centers on optical signal transmission, covering upstream raw materials, midstream manufacturing integration, and downstream application markets. Upstream mainly includes core materials and equipment, such as optical fiber preform rods, which are high-tech barriers in the industry chain, accounting for about 70% of costs. Leading companies include domestic Longfei Fiber and Hengtong Optoelectronics. Optical materials include high-purity quartz sand (e.g., Quartz Shares, which once hit a “10cm” daily limit intraday on April 7), optical fiber coatings (Feikai Materials), and others.

Midstream involves optical fiber and cable manufacturing, with companies like Longfei Fiber, Hengtong Optoelectronics, Zhongtian Technology, and FiberHome Communications. Downstream applications are diverse, such as data centers in emerging markets, where AI computing power drives the demand for ultra-low loss fibers and hollow core fibers, further boosting industry heat.

For future investment opportunities in optical fiber, many leading brokerages are optimistic. For example, CITIC Securities states that since Q3 2025, optical fiber prices in China have continued to rise, reflecting strong demand and overall tight supply. Overseas demand remains robust, with strong export performance indicating vigorous global demand for optical fiber and cable.

China’s optical fiber export proportion has significantly increased, confirming the industry’s prosperity. In February this year, China exported 3,779.9 tons of optical fiber worth 790 million yuan, up 63.6% and 126.8% year-over-year, respectively. Compared to February 2018 (a peak in domestic demand), exports of optical fiber increased 17.6 times from 203.5 tons (see Figure 3).

CITIC Securities expects that AI-driven demand for optical fiber will continue to grow rapidly: First, global demand for optical modules will significantly increase by 2026, and fiber demand will grow accordingly; second, demand for scaled-up (vertical expansion) optical fiber may start to rise in 2027; third, DCI will also bring substantial demand. Currently, the optical fiber and cable industry has shifted from recovery to a stage of “tight supply, simultaneous volume and price increases.” As a capital-intensive industry, it is expected that short-term capacity expansion will be difficult, so prices are likely to continue rising, and the optical fiber and cable sector remains highly recommended.

(The stocks mentioned in the article are for illustrative analysis only and are not buy or sell recommendations.)