Talk every Monday:
The operator sector rose as a whole this week, highlighting the value of hedge allocation of high dividends + undervalued value of operators. China Mobile rose 15.68%, China Telecom Corporation Limited(601728) rose 3.61%, China United Network Communications Limited(600050) rose 7.82%. Since the beginning of the year, the high valuation sectors represented by new energy and medicine have continued to kill. On the contrary, the undervalued sectors have been favored by the market and continue to recommend the allocation of operator sectors.
The fundamentals of operators are gradually improving. Network side: 5g network coverage continues to improve, the number of 5g base stations has exceeded 1.4 million, and the increase of 5g package user penetration has driven the operator Arup value. The speed-up and fee reduction tend to ease, and operators give up the price war and improve user stickiness by providing more high-quality and differentiated services. Cost side: the whole 5g new infrastructure adopts the principle of moderate advance. It is expected that the overall capital expenditure of operators will maintain a steady or slight growth in 2022. Compared with 3G and 4G, the whole 5g investment cycle is expected to be prolonged, the cost of operators will improve, and the profit is expected to be released continuously.
The development of cloud computing and digital economy drives the government and enterprise business of operators, which is expected to open the second growth curve. The compound growth rate of China Mobile’s ICT business from 2018 to 2020 reached 66%, and the H1 mobile cloud revenue in 2021 was 9.721 billion yuan, a year-on-year increase of 118%; In 2021, the revenue of H1 Tianyi cloud reached 14 billion yuan, a year-on-year increase of 109.3%, exceeding the total revenue of 2020; In 2021, the revenue of H1 woyun reached 7.69 billion yuan, with a year-on-year increase of 54.1%. With unique communication network resources, operators are committed to building a development model of “cloud network integration” and driving the continuous improvement of revenue.
Increase shares to demonstrate confidence. At the same time, recently China Telecom Corporation Limited(601728) plans to increase its holdings of a shares, with a proposed increase of no less than RMB 500 million. China Mobile announced the repurchase of Hong Kong shares and increase its holdings of a shares, which all show the operators’ confidence in future development.
Market review:
This week (2022.02.07-2022.02.11), the Shanghai Composite Index, Shenzhen Component Index and gem index increased by 3.02%, – 0.78%, – 5.59% respectively, and the Shenwan communication index increased by 2.53%, ranking 17th in Shenwan’s 28 primary industries.
Performance of individual stocks in the communication sector this week:
The top five stock price increases are: Hengbao Co.Ltd(002104) , Wuhan Tianyu Information Industry Co.Ltd(300205) , Hebei Sinopack Electronic Technology Co.Ltd(003031) , Fujian Star-Net Communication Co.Ltd(002396) , Chutian Dragon Co.Ltd(003040) the top five stock price decreases are: Wenzhou Yihua Connector Co.Ltd(002897) , Super Telecom Co.Ltd(603322) , Dongguan Dingtong Precision Metal Co.Ltd(688668) , Advanced Fiber Resources (Zhuhai) Ltd(300620) , Dr.Peng Telecom&Media Group Co.Ltd(600804) investment strategy: (1) 5g network coverage continues to improve, the number of 5g base stations exceeds 1.4 million, and 5g equipment leader continues to be recommended: Zte Corporation(000063) ; (2) The increase in the penetration rate of 5g package users drives the Arup value of operators. Operators give up the price war and improve user stickiness by providing more high-quality and differentiated services. It is suggested to pay attention to: China Mobile; (3) The development of the Internet of things industry has entered the fast lane. It is recommended to focus on the investment opportunities of vehicle communication modules, and it is recommended to pay attention to Fibocom Wireless Inc(300638) , Quectel Wireless Solutions Co.Ltd(603236) ; (4) In the context of double carbon, green energy conservation has become the main theme, and the precision temperature control faucet is recommended: Shenzhen Envicool Technology Co.Ltd(002837) .
Risk tip: the development of 5g is not as expected, the trade friction between China and the United States has further escalated, and the epidemic has further spread
