ZJ Innolight (03308) climbed more than 6% during early trading on Friday morning. At the time of writing, the stock had advanced 6.33% to HK$1,192, with turnover reaching HK$1.337 billion.

According to an industry analyst note, the Federal Communications Commission's long-awaited final rule has now been formally issued, which is widely seen as a development that could significantly alleviate market worries surrounding the optical communications sector. The resolution of this regulatory overhang is believed to remove a key source of uncertainty that had been weighing on investor sentiment for related technology names.

Meanwhile, investment bank Citi has released a research report expressing a constructive outlook on the company's growth trajectory. The brokerage anticipates that ZJ Innolight will achieve compound annual growth rates of 129% for revenue and 149% for net profit over the 2025-2028 period. The optimistic projection is underpinned by several catalysts, including strong demand for AI-driven optical communications technologies, ongoing bandwidth upgrades across data centers, rapid capacity expansion initiatives, an improving product mix, increasing adoption of silicon photonics technology, and favorable operational leverage.