Hengtong Optic-Electric (600487.SH) — In-Depth Research Report
Specialty Fiber Capacity Edge; Optical Communications Enters an Upcycle
Key Data Snapshot
| Metric | Value |
|---|---|
| Ticker | 600487.SH |
| Rating | Recommended / Initial |
| Report date | March 26, 2026 |
| 52-week price range | RMB 51.42 – 14.48 |
| Total market cap | RMB 102.01 billion |
| Free-float market cap | RMB 101.13 billion |
| Total / free-float shares | 2,466.39 / 2,466.39 million |
| 52-week avg. daily turnover | 5.13% |
Investment Thesis
I. A leading global optical communications company
Hengtong is a global leader in optical communications, long focused on communications infrastructure. Main products include:
- Optical fiber preforms
- Optical fiber and cable
- Communications network systems integration
Evolution:
- R&D upgrades in preform technology
- Full integration of subsea communications and an end-to-end transoceanic chain
- PEACE transoceanic cable system and Singapore extension
- Acquisition of a leading specialty fiber producer
- Global manufacturing footprint
II. Data center build-out drives fiber demand
Global DC fiber demand (CRU):
- 2026E global data center fiber demand 91.6 million fiber-km
- +32% YoY
Key products:
- G.657 single-mode fiber
- Suited to data centers
- Excellent bend performance; bend radius ~1/4–1/2 of standard G.652
- Multimode (OM3, OM4, OM5)
- Short-reach, high-bandwidth DC scenarios
Portfolio:
- Single-mode, ultra-low-loss, submarine, power-delivery, high-bandwidth multimode, few-mode, multicore, hollow-core
Ultra-low-loss fiber platform built and expanded to meet high-speed DC interconnect.
III. Corning Optical Communications as a read-through
Corning Optical Communications (2025):
- Revenue USD 6.27 billion, +34.7% YoY
- Net profit USD 1.05 billion, +71% YoY
Data center segment:
- 2023 revenue: USD 1.33 billion
- 2025 revenue: USD 3.20 billion
- Overseas AI DC expansion adds ~USD 1.9 billion per year
Corning’s DC revenue now exceeds the carrier segment—driven by generative-AI data center architecture. This is a global compute-infrastructure trend; China’s DC fiber market should expand rapidly.
IV. ByteDance AI compute centers at scale
ByteDance AI compute investment:
- Since 2024: six large self-built AI compute centers in China
- Total investment RMB 35.7 billion
Key projects:
- Volcano Cloud Taihang Compute Center Phase I — RMB 2.8 billion; 120k high-performance AI servers; operational from 2025
- Four other large AI compute centers — expected online 2026
- Volcano Engine Horinger Phase II (Inner Mongolia) — expected online 2027
Market sizing:
- If ByteDance builds 1 GW of self-owned AI compute in 2026, fiber capex ~RMB 0.91–1.04 billion
- 2026 China DC fiber market ~RMB 5.5–6.3 billion
ByteDance’s large capex rests on solid demand and sets a precedent. 2026 is a year of scaled delivery for its self-built AI compute centers, likely lifting domestic DC fiber demand.
Earnings outlook & recommendation
The company should benefit from the data center wave; optical communications is entering an upcycle. Specialty fiber capacity and leading preform capacity position it to capture industry growth.
Risks
- Slower-than-expected data center construction
- Intensifying competition
- Raw material price volatility
Source: DX Securities (Dongxing) Research
