On February 17, 2022, the national development and Reform Commission jointly issued documents with multiple departments, agreeing to start the construction of National Computing hub nodes in 8 places, including Beijing Tianjin Hebei, Yangtze River Delta, Guangdong Hong Kong Macao Dawan District, Chengdu Chongqing, Inner Mongolia, Guizhou, Gansu and Ningxia. At the same time, 10 national data center clusters are further planned to be established in the computing hub to specifically undertake the construction of large / super large data centers, It marks the official launch of the project of "counting from the east to the west". Previously, China has successively issued a number of policies to plan the intensive, large-scale and green development of data centers. As a representative of the new infrastructure, the data center has a long industrial chain, wide coverage and strong driving effect. It is expected to fully benefit from the promotion of the "counting from the east to the west" project. It is suggested to focus on operators, temperature control of machine room, ICT equipment & optical module, optical communication, IDC and other industry leaders, including China Mobile, China Telecom Corporation Limited(601728) , China United Network Communications Limited(600050) , Shenzhen Envicool Technology Co.Ltd(002837) , Nanjing Canatal Data-Centre Environmental Tech Co.Ltd(603912) , Unisplendour Corporation Limited(000938) , Suzhou Tfc Optical Communication Co.Ltd(300394) , Zte Corporation(000063) , Zhongji Innolight Co.Ltd(300308) , xinyisheng, Jiangsu Zhongtian Technology Co.Ltd(600522) , Hengtong Optic-Electric Co.Ltd(600487) , Yangtze Optical Fibre And Cable Joint Stock Limited Company(601869) , Shanghai Baosight Software Co.Ltd(600845) , Beijing Sinnet Technology Co.Ltd(300383) , Kehua Data Co.Ltd(002335) , Guangdong Aofei Data Technology Co.Ltd(300738) , etc.
▍ was jointly issued by the four ministries and commissions, and the "counting from the east to the west" was fully launched.
On February 17, 2022, the national development and Reform Commission, together with the central network information office, the Ministry of industry and information technology and the national energy administration, issued a document agreeing to start the construction of National Computing hub nodes in 8 places, including Beijing, Tianjin and Hebei, the Yangtze River Delta, Guangdong, Hong Kong, Macao, Dawan District, Chengdu and Chongqing, Inner Mongolia, Guizhou, Gansu and Ningxia. At the same time, relying on the computing hub, it is further planned to set up 10 national data center clusters, To specifically undertake the construction of large / super large data centers, marking the completion of the overall layout design of the national integrated data center system, and the full start of the "counting from the east to the west" project.
▍ policy interpretation: the state plans as a whole, optimizes the problems of uncoordinated regional development and mismatch between resources and demand, and guides the intensive, large-scale and green development of data centers.
According to the data of the high technology department of the national development and Reform Commission, China has built 5 million data centers, with a corresponding computing power of 130 eflops. With the rapid development of digital economy, the demand for computing power is expected to continue to grow at the rate of 20% + and the demand is still urgent. However, at present, China's data center has the phenomenon of uncoordinated regional development and mismatch between resource endowment and demand. The specific manifestations are that the demand in the eastern region is concentrated but the land, energy and other resources are limited, the western region is rich in renewable resources but the demand is insufficient, and the efficiency of computing power utilization needs to be improved. In this context, the state has made an overall plan and launched the project of "computing from the east to the west", that is, the data with low delay requirements (mainly cold data such as background processing, offline analysis, storage and backup) are transferred to the western data center, while the data with high network delay requirements (such as artificial intelligence, video conference, etc.) are still calculated in the eastern hub, so as to promote the rational layout of the data center Load balancing between the East and the west, optimizing the supply and demand pattern, and guiding the development of data centers towards intensification, scale and greening.
▍ the national big data center is an important part of China's digital economy. Recently, relevant development plans and implementation plans have appeared frequently.
1) the State Council: in January 2022, it was clearly stated in the "14th five year plan" for the development of digital economy that it is necessary to promote the development of cloud network coordination and computing network integration, and accelerate the implementation of the project of "computing from the East to the west".
2) Ministry of industry and information technology: in November 2021, it was pointed out in the "14th five year plan" for the development of information and communication industry that the service capacity of China's data and computing facilities should be enhanced, and it was proposed that the computing capacity of China's data center should reach 27% from 2020 to 2025, and the pue of new (super) large data center should be reduced to less than 1.3 in 2025; In the same month, the big data industry development plan of the 14th five year plan stated that it was necessary to accelerate the construction of a national integrated big data center system and build several national hub nodes and big data center clusters.
3) national development and Reform Commission and other departments : in May and December 2021, the implementation plan for computing hub of collaborative innovation system of national integrated big data center and the implementation plan for implementing the requirements of carbon peak and carbon neutralization goal and promoting the green and high-quality development of new infrastructure such as data center and 5g were issued respectively. The recent introduction of relevant development plans and implementation plans reflects the government's great attention to the construction of national big data center and the green, energy-saving and high-quality operation of data center.
▍ the East digital West computing project is expected to boost the overall demand for computing power in the central and western regions, and the key benefits of the communication industry chain.
It is expected to drive the development of data centers and related upstream and downstream industries and expand industrial investment through the layout of 8 computing hubs and the formation of data center clusters across the country. We are optimistic about the demand driven by the East digital West computing project for IDC, ICT equipment, optical modules, operators, temperature control equipment, optical communication and other fields. As the core base of the East digital West computing project, the communication sector is expected to benefit from:
1) operators: operators have the advantages of cloud network integration and cloud edge combination. Operators have a large-scale computing power layout in the central and western regions, and the public cloud and edge cloud are also growing rapidly, which is expected to continuously improve the operating efficiency. It is suggested to pay attention to China Mobile, China Telecom Corporation Limited(601728) , China United Network Communications Limited(600050) ;
2) temperature control equipment: green energy-saving development of data center + stricter pue control is expected to continue to promote the demand for temperature control equipment. It is recommended to pay attention to Shenzhen Envicool Technology Co.Ltd(002837) , Nanjing Canatal Data-Centre Environmental Tech Co.Ltd(603912) ;
3) ICT equipment & optical modules: ICT equipment and optical modules are the basis of computing power network. The construction of data center cluster + the increasing demand for computing power is expected to promote the expansion and upgrading of servers, switches, routers and optical modules. It is recommended to pay attention to Unisplendour Corporation Limited(000938) , Zte Corporation(000063) , Zhongji Innolight Co.Ltd(300308) , Eoptolink Technology Inc.Ltd(300502) , Suzhou Tfc Optical Communication Co.Ltd(300394) ;
4) optical communication: the explosion of data traffic is expected to accelerate the promotion of optical fiber communication to all-optical network. It is optimistic that the centralized purchase volume and price of optical fiber and cable by operators will rise together to promote the high-quality growth of the industry. It is recommended to pay attention to Jiangsu Zhongtian Technology Co.Ltd(600522) , Hengtong Optic-Electric Co.Ltd(600487) , Yangtze Optical Fibre And Cable Joint Stock Limited Company(601869) ;
5) IDC: under the policy environment of counting from the east to the west, the energy consumption indicators of first tier cities are becoming stricter. The advantages of IDC leaders with strong foundation and in-depth cooperation with Internet and cloud manufacturers in and around first tier cities continue to highlight. It is suggested to pay attention to Shanghai Baosight Software Co.Ltd(600845) , Beijing Sinnet Technology Co.Ltd(300383) , Guangdong Aofei Data Technology Co.Ltd(300738) , Kehua Data Co.Ltd(002335) .
▍ risk factors:
The progress of the project of "counting from the east to the west" was lower than expected; The construction progress of data center is lower than expected; Deterioration of supply and demand pattern; The demand for big data applications is lower than expected.
▍ investment strategy:
As a representative of the new infrastructure, the data center has a long industrial chain, wide coverage and strong driving effect. It is expected to fully benefit from the promotion of the "counting from the east to the west" project. It is recommended to pay attention to operators, computer room temperature control, ICT equipment & optical module, optical communication, IDC and other industry leaders, including China Mobile, China Telecom Corporation Limited(601728) , China United Network Communications Limited(600050) , Shenzhen Envicool Technology Co.Ltd(002837) , Nanjing Canatal Data-Centre Environmental Tech Co.Ltd(603912) , Unisplendour Corporation Limited(000938) , Suzhou Tfc Optical Communication Co.Ltd(300394) , Zte Corporation(000063) , Zhongji Innolight Co.Ltd(300308) , xinyisheng, Jiangsu Zhongtian Technology Co.Ltd(600522) , Hengtong Optic-Electric Co.Ltd(600487) , Yangtze Optical Fibre And Cable Joint Stock Limited Company(601869) , Shanghai Baosight Software Co.Ltd(600845) , Beijing Sinnet Technology Co.Ltd(300383) , Kehua Data Co.Ltd(002335) , Guangdong Aofei Data Technology Co.Ltd(300738) , etc.
