The Zhitong Finance App learned that Guosheng Securities released a research report saying that in 2023, with overseas telecom demand slowing and domestic sea breezes construction delays, the fiber optic cable industry experienced a round of downturn, and industry valuations experienced a significant contraction. Since entering 2024, domestic ocean wind construction has gradually recovered, overseas cable demand has begun, and high-end optical fiber is expected to break out of the “cycle product” attribute under AI demand. The fiber optic cable industry is expected to break out of this industry trough and move towards recovery. Leading companies in the industry that have experienced the complete cycle of the optical fiber and cable industry will fully enjoy the Davis double click opportunities brought by marine landscape restoration and technological innovation promoted by AI and satellite communications.

It is recommended to focus on: Changfei Optical Fiber (601869.SH), Hengtong Optoelectronics (600487.SH), Zhongtian Technology (600522.SH), Fiberfire Communications (), etc.; at the same time, focus on dark horse companies in the industry that focus on special optical fiber applications, such as Taichenguang (300570.SZ) and Changyingtong (US). 600498.SH 688143.SH Foreign manufacturers are advised to focus on leading companies such as Corning, Furukawa Electric, and Fujikura.

Domestic seabreeze construction margins are improving, and seabed cables are gradually advancing

At the end of April 2024, the Guangdong Yangjiang Fanshi2 1000MW offshore wind power project fan procurement tender notice was officially released, indicating that the ocean wind industry is recovering at an accelerated pace after experiencing delays caused by waterway problems, etc. As the core link of offshore wind power construction, the submarine cable industry has a good competitive pattern and a high entry threshold for the industry, which is expected to fully benefit from China's offshore wind construction process.

At the same time, domestic cable companies are also gradually going abroad with their technological advantages. In recent years, leading domestic companies such as Zhongtian Technology, Hengtong Optoelectronics, and Dongfang Cable have successively broken through overseas customers. Among them, Zhongtian Cable won the bid for the 1.2 billion yuan European project, while Hengtong Optoelectronics built the world's first semi-submersible floating offshore wind farm in Portugal as early as 2019. Domestic and overseas markets are double hit, and the Sea Breeze business is expected to break out of the trough of low expectations and low prosperity.

Driven by AI, special optical fiber has become an important component, and domestic replacement welcomes an opportunity

Looking at the past, the global mainstream optical fiber market was mostly dominated by standard optical fibers used in the telecom market, traditional IDC market, etc., and the industry as a whole followed the ups and downs of the global telecommunication network construction cycle. However, as demand for AI begins to increase, high-end products in optical fiber - specialty optical fiber - are expected to usher in new development opportunities.

Guosheng Securities pointed out that special optical fibers are small in quantity and high in price. Unlike ordinary optical fibers, which have a high degree of standardization and are easy to manufacture in batches, special optical fiber manufacturers need to master the whole process from raw materials and process design to manufacturing, and the barriers are high.

Currently, AI special optical fibers mainly include polarization-maintaining optical fibers, bait optical fibers, and hollow optical fibers. Polarized optical fiber is mainly responsible for maintaining the polarization of light during transmission. It is expected that with the gradual release of CPO switches, doping optical fiber is mainly used for long-distance high-precision transmission. As single-point power reaches a bottleneck, subsequent computing power center networking is expected to rapidly expand demand for doped optical fiber. Hollow fiber has advantages in short-range high-speed transmission, etc. As IDC's internal optical communication rate rapidly iterates, hollow fiber is expected to gradually penetrate.

Currently, most of the global AI computing power centers use high-end optical fiber from overseas brands. Guosheng Securities determined that at a time when AI demand is rapidly expanding, Chinese fiber optic cable leaders with deep technology accumulation are expected to open up new supply chain opportunities.

Risk warning: AI development falls short of expectations, sea breeze construction progress falls short of expectations, technology iteration risks.