This week, the CSI 300 rose 0.82% and the gem fell 5.59%, of which the communication sector rose 1.61%, and the price performance of the sector was stronger than the market; The turnover rate of 126 constituent stocks of the communication (CITIC) index this week was 1.80%; Over the same period, the turnover rate of 300 constituent stocks in Shanghai and Shenzhen was 0.56%, and the overall activity of the sector was stronger than that of the market. In terms of individual stocks in the communication sector, the top five companies that rose this week were: Hengbao Co.Ltd(002104) (61.10%), Wuhan Tianyu Information Industry Co.Ltd(300205) (45.00%), Shenzhen Roadrover Technology Co.Ltd(002813) (29.07%), Invengo Information Technology Co.Ltd(002161) (25.82%) and Fujian Star-Net Communication Co.Ltd(002396) (17.43%); The top five companies with declines were: Wenzhou Yihua Connector Co.Ltd(002897) (- 16.36%), Super Telecom Co.Ltd(603322) (- 14.29%), Advanced Fiber Resources (Zhuhai) Ltd(300620) (- 13.14%), Quectel Wireless Solutions Co.Ltd(603236) (- 11.53%) and Beijing Inhand Networks Technology Co.Ltd(688080) (- 11.39%).
The 14th five year plan for the development of digital economy was issued, and the construction of information infrastructure was accelerated. The State Council recently issued the “14th five year plan for the development of digital economy”. The number of Internet users has reached 800 million in 2025, and the number of Internet users has reached 800 million. It is clearly planned that the number of Online Economic users will reach 600 million in 2025, accounting for 800% of the GDP, and the real economy will expand to a digital economy. According to the plan, during the 14th Five Year Plan period, we will optimize and upgrade digital infrastructure, jointly promote the deployment of gigabit optical fiber network and the construction of 5g network infrastructure, promote the large-scale commercial use of 5g independent networking, prospectively lay out the technical reserves of the sixth generation mobile communication network, increase the support for 6G technology research and development, actively participate in promoting 6G international standardization, and accelerate the layout of satellite communication networks, Promote the development of cloud network collaboration and computing network integration, and orderly promote the intelligent upgrading of infrastructure. In 2021, the development of cloud computing, big data and other emerging businesses in China accelerated, and the scale of users of new infrastructure expanded rapidly. According to the data of the Ministry of industry and information technology, the revenue of emerging businesses in 2021 was 222.5 billion yuan, a year-on-year increase of 27.8%, of which the year-on-year growth rates of data center, cloud computing and big data services were 18.4%, 91.5% and 35.5% respectively, and 5g mobile phone users expanded to 355 million, 4G and 5g accounted for 86.7% of the total number of mobile phone users. There were 498 million broadband users of 100 megabytes and above, with a net increase of 63.85 million throughout the year, accounting for 93% of the total number of users. The proportion increased by 3.1 PCT year-on-year. There were 34.56 million Gigabit users, a net increase of 28.16 million over the end of the previous year. There were 1.425 million 5g base stations across the country, and more than 650000 5g base stations were newly built throughout the year. The communication industry has made a good start in the 14th five year plan. With the implementation of the development planning objectives of digital economy, the improvement of the informatization level of various industries drives the growth of traffic, and the supporting applications tend to be mature, which will continue to drive the construction of 5g Internet of things.
The centralized procurement and bid opening of outdoor optical cables for telecommunications, and the optical fibers and cables continued to recover. China Telecom Corporation Limited(601728) recently released the announcement of bid winning candidates for the 2021 outdoor optical cable centralized procurement project. There are 20 bid winning manufacturers, of which Jiangsu Zhongtian Technology Co.Ltd(600522) , Hengtong Optic-Electric Co.Ltd(600487) , Yangtze Optical Fibre And Cable Joint Stock Limited Company(601869) , Fortis communication and Fiberhome Telecommunication Technologies Co.Ltd(600498) are the top five. According to the previous announcement, the procurement contents of this project are China Telecom Corporation Limited(601728) Group Co., Ltd., China Telecom Corporation Limited(601728) and its subsidiaries The outdoor optical cable products (excluding the outdoor optical cable required for the construction of provincial-level optical cable line projects) required by the branch in 2022 include gyta, GYTS, gydta, gydxtw and other types of outdoor optical cables. The estimated procurement scale is 43 million core km, and the actual estimated procurement scale is 43.1 million core km. The average quotation of each manufacturer in this centralized procurement is 3.5 billion yuan, and the average price is about 80 yuan / core km, Compared with the average quotation of 55 yuan / core km in 2020, it is increased by 45.45%. Previously, China Mobile announced the results of centralized procurement of ordinary optical cables from 2021 to 2022 in October 2021. The scale of centralized procurement was about 9 billion yuan, and the average transaction price was 63.95 yuan / core km, an increase of 20% year-on-year. The continuous rise in the prices of the two centralized purchases reflects that after the expansion of production capacity and the pressure of price decline in the optical fiber and cable industry in recent two years, the medium and low-end production capacity has been cleared, and the supply and demand pattern of the industry has gradually improved. Judging from the bidding results of this Telecom centralized procurement, 12 of the 20 manufacturers also won the bid for the early China mobile optical cable centralized procurement, among which the top five are the same, the bid winning price is significantly higher than that of other manufacturers, and the industry pattern tends to be stable. According to the data of the Ministry of industry and information technology, in 2021, China’s newly-built optical cable lines will be 3.19 million kilometers, and the total length of national optical cable lines will be 54.88 million kilometers. The construction of all-optical network continues to be further promoted. It is expected that with the promotion of China’s 5g construction and “double Gigabit” network construction and the acceleration of countries’ investment in communication network infrastructure around the world, the demand for optical fiber and cable will usher in new opportunities for growth.
The Ministry of industry and information technology promoted the rapid development of Beidou industry and expanded the popularization rate of Beidou application. The Ministry of industry and information technology recently issued several opinions on the promotion and application of Beidou in the field of mass consumption, pointing out that it is necessary to improve the industrial basic capacity, prosper Beidou mass consumption market, accelerate the R & D and industrialization of high-precision, low-power, low-cost and miniaturized Beidou chips and key components at the level of technical products and infrastructure, and form Beidou and 5g, Internet of things System solutions for the integration of new generation information technologies such as the Internet of vehicles, improve the supply capacity of Beidou chips, devices and modules in the field of mass consumption, improve the construction of Beidou network auxiliary public service platform, expand the application scenarios of Beidou’s high-precision positioning in the field of mass consumption, and build Beidou vehicle networking application service platform, Unified Beidou commercial vehicle data source access and data open security interface to provide users with high reliable and high-precision Beidou location and data application services. On the consumer side, through the pilot demonstration of high-precision positioning of smart phones, build sub meter level positioning application scenarios, promote Beidou location services of smart terminals as an emergency communication means in the fields of health and elderly care, children’s care and convenient services, and further expand the application scale of Beidou on vehicle terminals, such as encouraging vehicles to be equipped with standard front Beidou terminals, Promote the application of Beidou high-precision positioning technology in the Internet of vehicles, use the application of Beidou multi frequency positioning, high-precision positioning and other technologies in the field of shared two wheeled vehicles, and enable the orderly management of shared two wheeled vehicles. Beidou-3 completed its global networking in June 2020, and “Beidou +” gradually penetrated into emerging markets such as transportation, logistics, agriculture and Siasun Robot&Automation Co.Ltd(300024) , forming application fields such as intelligent transportation, Jiangsu Nonghua Intelligent Agriculture Technology Co.Ltd(000816) , intelligent pipe network, intelligent driving and intelligent control. The 12th China Spacesat Co.Ltd(600118) navigation annual conference shows that the overall output value of China Spacesat Co.Ltd(600118) navigation industry will exceed 400 billion yuan in 2020, with an average annual growth of more than 20%. The total value of Beidou industry will reach 1 trillion yuan in 2025. With the increase of penetration of popular applications such as intelligent driving and intelligent transportation and the increase of Beidou users, Beidou industrial chain is expected to benefit.
Investment suggestions: focus on the Internet of things and the Internet of vehicles: Quectel Wireless Solutions Co.Ltd(603236) , Fibocom Wireless Inc(300638) , Meig Smart Technology Co.Ltd(002881) , Wingtech Technology Co.Ltd(600745) , Wenzhou Yihua Connector Co.Ltd(002897) , Foryou Corporation(002906) , Queclink Wireless Solutions Co.Ltd(300590) , Hangzhou Hopechart Iot Technology Co.Ltd(688288) , Streamax Technology Co.Ltd(002970) ; On board connector: Suzhou Recodeal Interconnect System Co.Ltd(688800) , Wenzhou Yihua Connector Co.Ltd(002897) ; Intelligent controller: Shenzhen Topband Co.Ltd(002139) , Shenzhen H&T Intelligent Control Co.Ltd(002402) , Shenzhen Longood Intelligent Electric Co.Ltd(300543) , Shenzhen Bestek Technology Co.Ltd(300822) ; Equipment manufacturer: Unisplendour Corporation Limited(000938) (Xinhua III), Zte Corporation(000063) , Fujian Star-Net Communication Co.Ltd(002396) ; Data center: Shanghai Baosight Software Co.Ltd(600845) , Kehua Hengsheng, Beijing Sinnet Technology Co.Ltd(300383) etc; Telecom operators: China Mobile, China Telecom Corporation Limited(601728) , China United Network Communications Limited(600050) ; Military communications and satellite applications: Jushri Technologies Inc(300762) , Tianjin 712 Communication & Broadcasting Co.Ltd(603712) , Shanghai Huace Navigation Technology Ltd(300627) , Chengdu Corpro Technology Co.Ltd(300101) , Guangzhou Haige Communications Group Incorporated Company(002465) , China Satellite Communications Co.Ltd(601698) etc; Optical devices and optical modules: Eoptolink Technology Inc.Ltd(300502) , Suzhou Tfc Optical Communication Co.Ltd(300394) , Accelink Technologies Co.Ltd(002281) ; IDC HVAC equipment: Shenzhen Envicool Technology Co.Ltd(002837) , Nanjing Canatal Data-Centre Environmental Tech Co.Ltd(603912) , Yimikang Tech.Group.Co.Ltd(300249) etc.
Risk warning events: 5g investment is less than expected, market competition intensifies, technology upgrading is less than expected, market systemic risk, etc
