The last trading week was the sixth trading week of A-Shares in 2022. The Shanghai and Shenzhen 300 index rose 1.08%, and 20 of 31 industries in Shenwan level rose and 11 fell. The overall trend of the communication industry was stronger than the market last week, rising by 2.14%, ranking 13th and second in the TMT industry. At present, a new round of scientific and technological revolution and industrial reform are reshaping the global economic structure. As the core productivity of digital economy, computing power has become a new focus of global strategic competition. Up to now, the scale of China’s data center has reached 5 million standard racks, and the computing power has reached 130 eflops (1.3 trillion floating-point operations per second). With the comprehensive and continuous penetration of digital technology into all fields of economy and society, the demand for computing power in the whole society is still very urgent, and it is expected to grow rapidly at a rate of more than 20% every year. Computing power has become an important infrastructure for national economic development. Accelerating the construction of computing power will effectively stimulate the innovation vitality of data elements, accelerate the process of digital industrialization and industrial digitization, give birth to new technologies, Shenzhen New Industries Biomedical Engineering Co.Ltd(300832) , new business forms and new models, and support high-quality economic development. At present, most of China’s data centers are located in the eastern region. Due to the increasing shortage of land, energy and other resources, it is difficult to sustain the large-scale development of data centers in the eastern region. Western China is rich in resources, especially renewable energy, and has the potential to develop data centers and undertake the computing power needs of the East. The promotion of Eastern digital computing and Western computing is expected to give full play to the advantages of China’s system and mechanism, integrate the layout from a national perspective, optimize the allocation of resources and improve the efficiency of resource use. It is suggested to pay attention to IDC construction related industries such as operators, main equipment manufacturers, optical modules and temperature control in the industrial chain.
Key investment points:
One week’s industrial news: (1) China’s “counting from the east to the west” project was officially launched; (2) 12 departments jointly issued new policies: guide telecom operators to accelerate the progress of 5g construction; (3) On May 17 this year, China Radio and television will officially operate the 192 mobile phone section; (4) Focus on the collection of 5g small stations of operators: only when a hundred flowers bloom can spring fill the garden; (5) The third phase of the 14th phase of China Mobile inter provincial backbone transmission network expansion: Huawei and ZTE divide up; (6) China Mobile PC server centralized purchase and re opening 2 bid packages: Digital China Group Co.Ltd(000034) and other 6 manufacturers won the bid; (7) 2021 optical fiber development index: 4th in China and 18th in the United States; (8) Record setting: global chip sales in 2021 reached US $555.9 billion, a year-on-year increase of 26.2%; (9) The EU announced a 6 billion euro new satellite system development plan to provide space-based connectivity to Europe and Africa.
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 business also opens up 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: increased trade friction, China’s 5g construction does not meet expectations, the slowdown of global cloud computing construction, and the price fluctuation of upstream raw materials.
