[ET Net News Agency, 25 October 2019] Goldman Sachs lowered its target price for YOFC
(06869) to HK$19.6 from HK$22 but upgraded its rating to "buy" from "neutral" as the
industry is near the bottom.
The research house said fiber cable ASP recovered by 12.5% in August tender and fiber
preform (a key raw material for fiber cable) price and margin continue to be at healthy
levels. Given this, Goldman now expects a gradual recovery in earnings and margins for
YOFC and forecast its earnings to grow by 23%/38% in 2020/21.
In addition, post 53% decline in YOFC share price after China Mobile's 12 March tender
result announcement and valuation trading at 2-year low levels, Goldman sees risk-reward
as attractive. (KL)