Yangtze Optical Fiber and Cable surged 10.29%, AI computing power demand ignites the optical communication sector

As of March 20, 2026, the share price of Changfei Optical Fiber Cable (06869) was reported at HK$13, a significant increase of 4.94%. The intraday high reached HK$166.4, with a turnover of HK$3.919 billion. The five-day volatility was 17.7%, reflecting a notable increase in short-term share price fluctuations.

Performance of other Hong Kong-listed stocks in the same sector

Other optical communication concept stocks that strengthened alongside Changfei include: Cambridge Technology (06166), up 1.50% to HK$77.35; and Jingxin Communication (02342) at HK$1.71. The sector showed overall strong performance, indicating positive market sentiment toward the future of the optical communication industry driven by AI computing power demand. Last night, U.S.-listed optical communication stocks also performed strongly against the market trend, with Lumentum and Applied Optoelectronics rising over 10%, Fabrinet gaining 8%, and Coherent increasing 7%, providing external support for related Hong Kong stocks.

According to market news analysis, the 2026 Optical Fiber Communication Conference and Exhibition (OFC) officially took place at the Los Angeles Convention Center, featuring major players in the optical communication industry such as Lumentum, Coherent, and AAOI. This year’s OFC sent a strong signal — explosive growth in AI computing power demand is pushing data centers to comprehensively reconstruct their optoelectronic network architectures. Lumentum predicts that the global potential market size for optical interconnect technology will grow from approximately $18 billion currently to $90 billion by 2030. Stimulated by this news, Hong Kong-listed optical communication concept stocks collectively strengthened, with Changfei Optical Fiber Cable opening higher and continuing to rise, and its trading volume significantly increased.

Technical Analysis and Support/Resistance Levels

From a technical analysis perspective, the stock price of Fabrinet has shown a breakout trend driven by the AI computing power theme. According to technical data from March 20, key support levels are as follows: the first support is at HKD 136.7, which is some distance away from the 10-day moving average (HKD 156.29). However, considering the pullback risk after a sharp rise in share price, HKD 136.7 represents an important short-term support zone. The second support level lies at HKD 104.7, which is identified as a stronger intermediate support area, close to the 60-day moving average (HKD 96.36). On the resistance side, the first resistance level is at HKD 184.5, near the upper boundary of the recent upward channel. If the price successfully breaks through this level, the next target will be HKD 217.0, representing the market's expected medium-term target.

Technical indicators overall present a neutral signal, with a summarized signal strength of 10. The Relative Strength Index (RSI) stands at 62, reflecting relative strength but not yet reaching overbought conditions. Several oscillation indicators, including Williams %R, Stochastic Oscillator, CCI, and ADX, all show neutrality. Notably, the VR Trading Ratio indicator gives a 'buy' signal, while the MACD suggests 'sell,' and Bollinger Bands indicate 'buy.' In summary, the technical picture reflects robust short-term momentum with ideal trading volume. However, after a sharp rise, consolidation may be needed; investors should observe the stock’s ability to hold the HKD 136.7 support and break through the HKD 184.5 resistance.

Review of Warrant Products

Reviewing the two call warrant products mentioned on March 17, their performance closely tracked the underlying stock movements over the subsequent two days. From March 17 to March 19, Fabrinet's stock price rose by a cumulative 4.14%. During this period, both call warrant products showed reasonable gains: HSBC Call Warrant (25353) increased by 9%, while Moly Call Warrant (25655) surged by 13%. This adequately reflects the leverage effect of related call warrants when the underlying stock rises, with product performance matching stock volatility, consistent with derivative instruments tracking the underlying asset movement.

Warrant Product Recommendations and Analysis

Given the current stock price consolidating around HKD 160.8, having stabilized above the HKD 136.7 support level and advancing towards the first resistance at HKD 184.5, investors may consider deploying the following five call warrant products according to their investment objectives and holding periods, while paying attention to how well the terms match key price levels of the underlying stock.

Fabrinet Maiyin Call Warrant (25978) $MB-YOFC@EC2608B.C (25978.HK)$ Strike price at HKD 188.888, out-of-the-money by approximately 22.50%, effective leverage of 2.46 times, premium rate of 44.22%, and expiration date on August 11, 2026. This product exhibits the highest increase within the group (a single-day rise of 17.54%) and the highest effective leverage, making it suitable for investors expecting the stock price to break through the first resistance at HKD 184.5 and move towards the strike price of HKD 188.888. The strike price is slightly above the first resistance, meaning the option would only enter in-the-money status if the stock price surpasses the resistance area, aligning with short-term technical targets. With a relatively shorter time to maturity, time decay will be quicker, making it suitable for short-term operations. A street ratio of 5.35% indicates moderate market participation.

Fabrinet Credit Suisse Call Warrant (25815) $CI-YOFC@EC2610A.C (25815.HK)$ Strike price at HKD 188.880, out-of-the-money by 22.49%, effective leverage of 1.92 times, premium rate of 54.59%, and expiration date on October 30, 2026. This product features the highest premium rate in the group and a later expiration date but shows lower increases (7.61%) and leverage within the group. It suits investors who are more sensitive to time decay and prefer higher premiums in exchange for longer holding periods. With a street ratio of just 0.94%, liquidity is relatively weaker, so investors should be mindful that bid-ask spreads might be wider.

Fabrinet J.P. Morgan Call Warrant (26090) $JP-YOFC@EC2608A.C (26090.HK)$Strike price 188.880 yuan, out-of-the-money by 22.49%, effective leverage 2.22 times, premium rate 48.11%, expiration date August 17, 2026. This product’s leverage and increase (12.86%) are at a medium level within the group; the premium rate is relatively high. The time to maturity is similar to that of product 25978, making it suitable for investors seeking a balance between leverage and cost. Street ratio is 3.91%, indicating relatively good liquidity.

Changfei Mori Call Warrant (25655)$MS-YOFC@EC2608A.C (25655.HK)$Strike price 139.900 yuan, in-the-money by 9.27%, effective leverage 2.15 times, premium rate 22.83%, expiration date August 5, 2026. This product is the only in-the-money warrant in the group with the lowest premium rate, providing some downside protection, making it suitable for conservative investors participating in upward trends. The strike price is below the current stock price, close to the first support level at 136.7 yuan. Even if the stock price pulls back, it has a higher chance of remaining in-the-money. It has the earliest expiration date and is the top choice in the group, with a street ratio of 3.65%.

Changfei Huatai Call Warrant (25577)$HU-YOFC@EC2610A.C (25577.HK)$Latest price 0.650 yuan, strike price 139.000 yuan, in-the-money by 9.86%, effective leverage 1.73 times, premium rate 32.30%, expiration date October 6, 2026. This product has the highest latest price, deepest in-the-money status, lowest leverage within the group, largest implied volatility, and later expiration date, making it suitable for investors optimistic about Changfei’s medium- to long-term outlook and planning to hold until after the earnings period. The product terms allow holding costs to be spread over time, effectively reducing the impact of short-term volatility on positions. Street ratio is 2.06%, indicating average liquidity.

Overall, Changfei has strongly broken through amid AI computing power demand as a catalyst, showing strong technical momentum with clear support and resistance levels. Investors can choose appropriate call warrants based on key price levels of the underlying stock and their own holding periods, while paying attention to the alignment between product terms and the underlying stock movement, and cautiously managing position risks.

Interactive Question:

1. Do you think Changfei can successfully break through the first resistance level at 184.5 yuan in the short term?

A) Yes, sustained fermentation of AI computing power demand

B) No, consolidation needed after a sharp rise

Friendly reminder:

This article does not constitute any investment advice. It is for reference only and does not constitute any investment advice. The market data, opinions, and analysis contained herein may change at any time without prior notice. We are not responsible for any loss or damage caused by reliance on the information in this article. Technical analysis only shows whether certain technical conditions are met; asset performance should be comprehensively evaluated with other data. Trading decisions should not be made solely based on this article. Please note that past performance is not indicative of future results. Follow Jenny's Hong Kong warrants insights for more professional analysis.

#Changfei Fiber Optic Cable #06869 #Hong Kong Stocks #Technical Analysis #Support Level #Resistance Level #Warrants #Call Options #AI Computing Power #Optical Communication #Investment Strategy #Telecommunications Equipment

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