Hengtong Optic-Electric expects net profit to increase by 87%-121% in the first half of the year; AI drives a surge in optical communication demand | Earnings Report News

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Fiber optic cable leader Hengtong Optic-Electric released its performance forecast, stating that the wave of artificial intelligence is driving both volume and price increases in the optical communication market, with the company’s profit scale hitting a record high.

On July 14, Hengtong Optic-Electric announced that it expects the net profit attributable to shareholders of the listed company in the first half of 2026 to be 3.016 billion to 3.568 billion yuan, a year-on-year increase of 86.94% to 121.20%. Based on last year’s net profit of 1.613 billion yuan for the same period, the maximum increment is close to 2 billion yuan.

The company attributes the leap in performance to two core drivers: the rapid development of artificial intelligence, and continued capital expenditure at data centers. Together, these have boosted demand and price in the optical communication market.

Non-recurring net profit growth is even more prominent

Looking at net profit excluding non-recurring gains and losses, which better reflects the quality of main business operations, Hengtong Optic-Electric expects to achieve 3.05 billion to 3.602 billion yuan in the first half of the year, a year-on-year increase of 94.14% to 129.32%. The overall growth rate range is higher than the indicator including non-recurring items, indicating that this period’s performance growth is mainly contributed by core business.

The company disclosed that non-recurring gains and losses mainly came from government subsidies related to income and gains from asset disposals.

Optical communication price and volume both rise

The announcement clearly states that during the reporting period, the optical communication market saw simultaneous growth in demand and price. The continuous expansion of computational infrastructure for AI model training and inference has significantly increased demand for high-speed optical fiber in data center interconnection, pushing product prices higher. Hengtong Optic-Electric has benefited from this favorable situation of rising volume and price.

In the same period last year, Hengtong Optic-Electric's net profit attributable to shareholders was 1.613 billion yuan, with earnings per share of 0.66 yuan.

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