Key investment points
In 2021, the industry revenue increased by 8.0%, with a year-on-year increase of 4.1pct
In 2021, the telecom business revenue totaled 1.47 trillion yuan, with a year-on-year increase of 8.0%, a year-on-year increase of 4.1pct, and continued to maintain a rapid growth trend. The total telecom business calculated according to the price of the previous year increased by 27.8% year-on-year. The cumulative revenue of telecom services continued to grow from 0.0% from January to August 2019 to 8.0% from January to December 2021. Our previous judgment on the formation of the inflection point of telecom service revenue has been verified, and the high-quality development trend is clear. Under the trend of digital transformation and 5g evolution, we continue to be optimistic about the development of operators during the 14th Five Year Plan period.
Emerging / mobile data / fixed data pull 3.6/1.5/1.7 PCT respectively
Emerging business: revenue increased by 27.8% year-on-year, telecom business revenue accounted for 15.2%, increased by 2.4pct over the previous year, and the eastern provinces have reached more than 23%. Cloud, big data and IDC increased by 92%, 18% and 36% year-on-year. Mobile data business: the revenue increased by 3.3% year-on-year, the growth rate increased by 1.5pct year-on-year, the net increase of mobile users was 48.75 million, which was greatly improved (last year’s net decrease was 7.28 million), and the penetration rate of 5g mobile phone users was 21.6%. Fixed data business: revenue increased by 9.3% year-on-year, with a net increase of 52.24 million users, an increase of 17.97 million compared with 2020. It is expected that the revenue structure of the industry will continue to be optimized, and the proportion of emerging business revenue will continue to increase under the digital trend.
Fixed asset investment was basically flat, and the proportion of 5g investment increased significantly year-on-year
In 2021, the three telecom operators and China Tower completed a total of 405.8 billion yuan of fixed assets investment in telecommunications, which was basically the same as 407.2 billion yuan last year, including 194.3 billion yuan of fixed assets investment in mobile communications, accounting for 47.9%; 5g investment was 184.9 billion yuan, accounting for 45.6%, an increase of 8.9 PCT year-on-year. By the end of 2021, China has built and opened 1.425 million 5g base stations, covering all prefecture level cities, more than 98% of County cities and 80% of township towns and townships in China, and gradually moving towards rural areas with conditions and needs. It is expected that the investment in fixed assets will continue to maintain a high level in 2022.
Multiple catalysis such as shareholding increase, repurchase, equity incentive and equity diversification reform
China Mobile: China Mobile Group plans to increase its holdings of A-Shares by no less than 3 billion yuan and no more than 5 billion yuan, and has increased its holdings by about 710 million yuan. China Mobile (H shares) announced that it plans to repurchase no more than 10% of its shares. China Telecom Corporation Limited(601728) : Tianyi cloud implemented equity diversification reform and introduced four central enterprises, China Electronics Technology, China Electronics, China Chengtong and China Guoxin, through capital increase and share expansion, to jointly build a “national team” in the field of cloud computing. China United Network Communications Limited(600050) : the second phase of equity incentive is planned to grant no more than 900 million restricted shares to about 8000 incentive objects, accounting for about 2.9% of the current total share capital.
Investment suggestion: highlight the value of the sector
In our special report on January 5, 2022, we suggested paying attention to the bottom investment opportunities of telecom operators, especially the obvious rise of Hong Kong stock telecom operators recently; At present, H shares of China Mobile, China Telecom Corporation Limited(601728) , China United Network Communications Limited(600050) are 0.79 times, 0.52 times and 0.31 times, which are still significantly lower than 1.12 times, 0.68 times and 0.67 times of the five-year historical center, and more significantly lower than 1.51 times the global comparable level. At the same time, it has a high dividend yield; Continue to recommend.
Risk warning: the operator’s expenses exceed expectations; 5g application development is not as expected.
