UBS: The fiber optic price hike has spread worldwide

Ask AI · Changfei Optical Fiber’s Profitability Outlook Improves, What Are the Main Driving Factors?

Global fiber optic prices are experiencing a new round of sharp increases, with the upward trend spreading from the Chinese market to Europe and America. The surge in data center demand combined with tightening upstream preform supply is driving this price cycle, significantly improving the profit outlook for industry leader Changfei Optical Fiber.

According to ZF Trading Platform, UBS’s latest research report citing industry research firm CRU’s latest data shows that the spot price of Chinese G652.D bare fiber optic cable will reach 83.40 RMB per kilometer (about $12.07) in March 2026, a 165% increase from January 2026, and a 418% year-over-year rise. This price has increased by over 400% since May 2025 and has broken the previous cycle high of 78.80 RMB per kilometer for the first time. Meanwhile, similar product prices in Europe have also increased by 136% month-over-month since January, with a clear tightening of global supply.

UBS analysts Jasmine Huang and Sara Wang believe that Changfei Optical Fiber’s profitability has entered an upward correction cycle, and they have significantly raised their profit forecasts for the company from 2026 to 2028, expecting EPS of 4.98 RMB in 2026, well above the market consensus of 1.85 RMB.

Chinese fiber optic prices hit record highs, surpassing the previous cycle

According to CRU bi-monthly data, the spot price of Chinese G652.D bare fiber optic cable reached 83.40 RMB per kilometer in March 2026, a 418% YoY increase, with a 165% MoM increase compared to January 2026, further accelerating from the 92% YoY and 79% MoM increases reported in January 2026.

This price level marks that Chinese G652.D bare fiber optic cable has accumulated over 400% growth since May 2025 and has surpassed the previous cycle high of 78.80 RMB per kilometer for the first time, setting a new record.

Notably, since January 2026, Chinese G652.D prices have exceeded European counterparts. According to UBS, the last time this happened was in November 2018, when large-scale FTTH deployment and 4G network construction in China jointly drove explosive growth in fiber optic cable consumption.

Price Surge Spreads to Europe and America, G657.A1 Fiber Also Strengthens

The fiber optic price increase is no longer limited to China. CRU data shows that the price of European G652.D bare fiber optic cable reached 7.94 euros per kilometer (about $9.1) in March 2026, a 136% MoM increase and a 159% YoY increase, with supply tightening effects spreading globally.

Prices of G657.A1 bare fiber optic cables, used in indoor and bend-insensitive scenarios, have also risen sharply.

CRU data indicates that European and U.S. G657.A1 bare fiber optic cable prices increased by 130% and 69%, respectively, from January 2026, supported by strong data communication demand and supply tightening.

Demand Structure Diverges: Data Centers Take Over from Telecom Operators

On the demand side, China and overseas markets show different structural characteristics.

CRU data shows that in Q1 2026, China’s fiber optic cable consumption was flat YoY, with telecom operator demand remaining weak, but growth in data center demand offset this drag. Fiber manufacturers are reallocating capacity to emerging applications like data centers and fiber drones, with upstream preform supply continuing to tighten, while overall industry expansion remains restrained.

In overseas markets, Changfei Optical Fiber’s core markets (Europe, Southeast Asia, Latin America) saw a 2% YoY increase in demand in Q1 2026, continuing the 2% growth trend for the full year 2025, consistent with UBS’s previous recovery outlook. The U.S. market performed particularly well, with demand up 24% YoY and 29% MoM in Q1 2026, driven by telecom network construction and the expansion of large-scale data centers.

Profit Forecasts Significantly Raised, Valuation Still Attractive

UBS believes that the sharp rise in spot fiber prices aligns with channel research results, and that Changfei Optical Fiber’s profitability has entered an upward correction cycle. The increased visibility of fiber price increases and product mix upgrades will provide ongoing support.

Regarding profit forecasts, UBS expects Changfei Optical Fiber’s revenue to grow from 21.06B RMB in 2026 to 33.74B RMB in 2030, with net profit rising from 4.12B RMB to 8.53B RMB. EBIT margins are expected to jump from 11.4% in 2025 to 24.3% in 2026, further expanding to 32.9% in 2027.

Currently, Changfei Optical Fiber’s stock price implies a forward P/E ratio of about 19 times for 2027. UBS notes that the key concern for investors now is the sustainability of the price rebound and how much of the spot price increases can be passed through to company profits.