Yangtze Optical Fibre’s Peru win excites investors, but soaring valuations raise concerns.
Hong Kong, 3 February 2026 – After completing a massive broadband network project in Peru, Yangtze Optical Fibre And Cable Limited has firmly returned to the spotlight of global investors. The project has connected more than one million people and thousands of public institutions across four regions, underlining the company’s growing role in global digital infrastructure.
This milestone comes at a time when the company’s stock has been on a remarkable run. Over the past 90 days, the share price has surged more than 140%, while the one-year return has been equally striking. Such sharp gains suggest that investors are rethinking the company’s growth potential and its position in the fast-expanding connectivity and broadband market.
In simple terms, the Peru project strengthens the company’s story. Governments around the world are investing heavily in broadband, fiber optics, and digital inclusion. For investors tracking infrastructure growth, telecom equipment, and next-generation connectivity, this kind of project signals long-term demand.
However, strong momentum often brings an important question: Is the stock still reasonably priced, or has enthusiasm already pushed it too far?
At the latest close of HK$84.6, the company trades at a price-to-earnings ratio of about 108 times. This means investors are paying a very high price for each dollar of current earnings. Such a valuation is usually justified only when the market expects rapid future growth or believes current earnings are temporarily low.
Analysts do expect strong growth, with earnings forecast to rise by more than 50% per year. That is faster than the broader Hong Kong market and helps explain why investors are willing to accept a premium. Still, the valuation stands well above both industry averages and the company’s own estimated fair earnings multiple.
When compared with other Asian communications equipment companies, which trade at much lower valuations, the gap becomes hard to ignore. This suggests that the stock price already reflects a lot of optimism about future projects, expansion, and execution.
Another way to look at value is through discounted cash flow analysis, which estimates what a company is worth based on the future cash it can generate. On this measure, the estimated fair value comes in far below the current market price. This does not mean the company lacks potential, but it does highlight the risk that expectations may be running ahead of reality.
For investors, the takeaway is balanced. On one hand, Yangtze Optical Fibre And Cable is benefiting from powerful global trends such as broadband expansion, digital infrastructure investment, and fiber network upgrades. These are popular themes in growth investing, technology stocks, and emerging market infrastructure.
On the other hand, the stock’s sharp rise and high valuation mean that any delay in projects, weaker earnings growth, or market slowdown could lead to volatility. When expectations are high, even small disappointments can have an outsized impact on share prices.
As interest grows in high-growth technology, connectivity, and AI-linked infrastructure stocks, Yangtze Optical Fibre And Cable stands out as a compelling but demanding valuation story. For long-term investors, the key will be watching whether future earnings and cash flows can truly catch up with today’s lofty market price.
