• Hengtong Optic-Electric said first-half optical communications revenue rose more than 130% year on year, with the segment's gross margin above 60%
  • The company is expanding optical-preform capacity by about 800 tonnes, with the additional output expected to begin coming through as early as the end of 2026

The fact

Hengtong Optic-Electric said revenue from its optical communications business rose by more than 130% year on year in the first half of 2026, while the segment's gross margin exceeded 60%.

The Chinese fibre and cable manufacturer reported total first-half revenue of RMB42.03 billion, up 31.13% from a year earlier. Net profit attributable to shareholders rose 93.38% to RMB3.12 billion. Hengtong said stronger demand and higher prices in the optical communications market were the main reasons for the improvement.

The company is also increasing upstream manufacturing capacity. It is adding about 800 tonnes of optical-preform capacity, with the additional production expected to begin coming through as early as the end of 2026. Optical preforms are the glass structures from which fibre is drawn. Hengtong has said its fibre and cable products are already being supplied to data-centre projects in China and overseas.

The assessment

Hengtong's first-half results show how much stronger demand and higher prices have lifted its optical communications business. Revenue more than doubled and gross margin exceeded 60%, although the company has not said how much of that growth came specifically from data-centre customers.

Hengtong is now adding about 800 tonnes of optical-preform capacity. That will give it more upstream material for fibre production, but it will also bring additional supply into a market where prices are currently favourable. The company has not disclosed how much extra fibre output the new capacity could support or how quickly it will be used.

For BTW readers, the clearest evidence will come after the new capacity starts production. Shipment volumes, realised prices and segment margins will show whether Hengtong can increase output while holding on to the pricing gains that supported its first-half results.

What to watch

Watch when the additional 800 tonnes of preform capacity enters production and whether Hengtong publishes resulting fibre-output figures. Optical communications margins, carrier procurement awards, data-centre orders and product pricing will show whether stronger demand continues to absorb the additional supply.