Industry core view:
The last trading week was the fourth trading week of A-Shares in 2022, and the overall pullback was large years ago. The CSI 300 index fell 4.51%, and all 31 industries in Shenwan fell. The overall trend of the communication industry was weaker than the market last trading week, down 5.27%, ranking 18th and second in the TMT industry. According to the interpretation of the statistical bulletin of the communication industry in 2021 recently released by the Ministry of industry and information technology, in 2021, the whole industry will accelerate the construction of “double Gigabit”, promote the development of national big data center, build a new infrastructure of cloud network integration, and continuously improve the supply capacity of enabling social digital transformation. By the end of 2021, China had built and opened 1.425 million 5g base stations, and built the world’s largest 5g network, covering all prefecture level cities, more than 98% of County cities and 80% of township towns, and gradually moving towards rural areas with conditions and needs. The total number of 5g base stations in China accounts for more than 60% of the world; The number of 5g base stations per 10000 people reached 10.1, nearly double that at the end of last year. In the whole year, 5g investment was 184.9 billion yuan, accounting for 45.6% of Telecom fixed asset investment. With the gradual completion of 5g network, 5g features such as high bandwidth, low delay and wide connection are important drivers for the transformation and upgrading of transportation and logistics, stations, ports, docks, factories and other scenes to high quality. It is suggested to pay attention to the expansion progress of 5g applications throughout the year.
Key investment points:
One week industry news: (1) Ministry of industry and information technology: China invested 184.9 billion yuan in 5g in the whole year, accounting for more than 60% of the total number of base stations in the world; (2) In 2021, China Telecom Corporation Limited(601728) business revenue was 1.47 trillion yuan: an increase of 8% year-on-year, and dict became the first driving force; (3) Smart phone industry 2021: new variables and new opportunities under the new pattern; (4) Dell’Oro report: by 2026, openran will account for about 15% of the overall ran market; (5) China Telecom Corporation Limited(601728) : the controlling shareholder plans to increase the holding of no less than 500 million yuan of a shares; (6) China Telecom Corporation Limited(601728) Official Commercial 5g message: using multi-dimensional billing mode, individual users can receive it free of charge; (7) The Ministry of industry and information technology issued a statement on the revocation of China United Network Communications Limited(600050) 214 license by the United States: the United States should withdraw its decision; (8) The last bid of Xin Chou year: China Mobile starts the centralized purchase of 2.6GHz radio and television dedicated core network equipment; (9) Results of centralized procurement of China Telecom Corporation Limited(601728) 2021 optical cables: a large single of 3.7 billion yuan was landed, and 20 manufacturers such as Zhongtian and Hengtong were shortlisted; (10) China Mobile collected 318.195 million USIM cards: 9 companies including Huahong, Chutian Dragon Co.Ltd(003040) and Hengbao won the bid.
With the gradual advancement of 5g construction and the continuous high growth of cloud computing construction scale, the fundamentals of the communication industry may continue to improve in 2022. In terms of 5g construction, with the implementation of the “14th five year plan” for the development of information and communication industry, the goal of 5g construction in the future is clear. In the next three to five years, 5g construction will also maintain a stable pace of construction investment. However, with the gradual progress of construction, the downstream supporting applications will gradually mature, thus driving the relevant construction of 5g again.
In the future when the structural market in the communication industry continues to evolve, we suggest paying attention to four investment tracks in the communication industry: (1) operators & equipment manufacturers: 5g construction continues to promote, and the prosperity of traditional communication business is rising. With the expansion of 5g construction, the performance of communication construction, operation and maintenance industrial chain has increased significantly, The cloud network construction of data center and 5g2b service also opens new growth space for operators & communication equipment manufacturers. (2) Optical module: with a new round of demand growth and the promotion of optical module technology, the industry is expected to usher in a new round of double clicking in 2022. It is suggested to pay attention to the leading optical module enterprises on the digital communication side. (3) Internet of things module: in the next two years, the Internet of vehicles module will still be one of the main directions of the future market growth of the Internet of things module. It is suggested to pay attention to the leading enterprises with deep layout in the Internet of vehicles industrial chain. (4) Temperature control: it is suggested to pay attention to some leading temperature control enterprises that have the ability to transplant the original data center liquid cooling technology to the energy storage system.
Risk factors:
Slow down the price fluctuation of upstream raw materials.
