Solid fundamentals; attractive tactical entry point

研报英文原文证据摘录

Not for redistribution without written consent of Morgan Stanley

M

Update

August 7, 2026 02:44 PM GMT

Jiangsu Zhongtian Technology | Asia Pacific

Morgan Stanley Asia Limited+

Eva Hou

Equity Analyst

Solid fundamentals; attractive

tactical entry point

The recent tender behavior reinforces how the optical fiber

industry has entered a stronger pricing environment – the fiber

price up-cycle will likely be sustained longer than the market

expects. We expect a stronger pricing and earnings outlook in

3Q26.

We expect further fiber price increase in 2H26: In early July, China Mobile

announced a centralized procurement tender (69mn fiber-km for G652.D) – but it

failed. The price will likely need to be raised before the procurement is re-tendered.

This implies that manufacturers appear increasingly reluctant to lock in low-margin

orders given expectations of higher market prices. Moreover, local tenders are more

flexible in pricing, and close to the spot price. In July, G657 A1/A2 prices rose 2-4%

MoM; G652.D prices in Europe were up 12% MoM, in response to tightened supply.

Enhanced structural demand outlook underpinned by strong alternative

demand: Demand from both domestic and US hyperscalers is ramping up rapidly. A

leading domestic hyperscaler completed a 13–14mn fiber-km tender in June. At the

same time, North American cabling and network infrastructure providers are

increasingly seeking to secure long-term procurement agreements with Chinese

manufacturers. In addition, ZTT highlights the potential for incremental upside from

drone and defense-related applications.

Strong 3Q26 earnings outlook: By end-2Q, the legacy low-priced centralized

procurement by major telecom groups should largely have been fulfilled. We expect

strong 3Q26 results, backed by higher realized fiber prices, improving product mix,

reduced exposure to legacy low-price contracts, as well as delivery acceleration of

submarine cables for European customers.

Tom Li

Equity Analyst

Jiangsu Zhongtian Technology Co. Ltd. (600522.SS,

600522 CG)

China Utilities | China

Stock Rating

Industry View

Price target

Up/downside to price target (%)

Shr price, close (Aug 7, 2026)

52-Week Range

Sh out, dil, curr (mn)

…