Event: the overall layout design of the national integrated big data center system was completed, and the project of “counting from the east to the west” was officially launched.
Recently, the national development and Reform Commission, together with many ministries and commissions, issued a notice 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, and planned 10 national data center clusters. At present, the economy is facing the pressure of steady growth and the background of double carbon. The “counting from the east to the west” project has both social value and economic benefits. The implementation of the project will better coordinate the supply of different computing power in the eastern and western regions, and become an effective means to promote the development of digital economy and green energy consumption in the western region.
The most important signal for the launch and release of “counting from the east to the west” is “demand traction, moderate advance”.
1) the industrial chain of data center is huge, and the investment leverage effect is obvious. According to delloro’s prediction, the capital expenditure of global data centers will reach 350 billion US dollars in 2026, and China’s investment in global data centers will account for about 20%, reaching 400 billion yuan. According to the Shanghai Securities News, the annual investment volume of the “counting from the east to the west” project will reach hundreds of billions of yuan, and the leverage effect on related industries will reach 1:8. According to our calculation, from the general project experience invested and constructed by IDC, 25% of capex is civil engineering, 15% is power environment, 10% is system integration and 50% is ICT hardware equipment. Through the new data center, it will also stimulate the investment in traditional infrastructure such as civil engineering, dynamic ring, distribution network and substation, and further help the investment drive steady growth.
2) strengthen the supply side guidance logic and effectively improve the quality of industrial development in the western region. Since 2020, a large number of IDC projects in various provinces and cities have been launched, resulting in the risk of oversupply in second and third tier cities, and some first tier cities have robbed key customers at low prices. After more than a year of adjustment, the industry is now in a basic balance between supply and demand, but the vacancy rate of second and third tier manufacturers is still high (according to CDCC, the national average shelf rate in 2021 is 50.07%, and the northeast, central China, northwest and southwest are below the average level). In terms of the development path of the industry, we believe that we need to pay attention to whether the demand side 5g burst applications, metauniverse and VraR traffic erupt in the long term, and the short-term supply side logic is relatively clear. The important expression in the guiding opinions on counting from the east to the west is “demand traction, moderately ahead”, which means that the growth of the supply side will exceed the demand side in the next two or three years, and the important factors suppressing the development of the industry will be weakened. From the perspective of total volume, according to the three-year action plan for the development of new data centers, the average annual growth rate of production capacity of China’s data centers will be maintained at about 20%. The significance of “counting from the east to the west” is to further clarify the perspective of structural adjustment. For the four core hub areas, the increase in the shelf rate of stock projects in the early stage of the project (no less than 65%) and the transformation of old and small projects (within pue1.25) will be the focus, and the market share may be further concentrated to the head. For the major planning areas in Guizhou, Inner Mongolia, Gansu and Ningxia in the western region, local governments will orderly guide the migration of cold data and back-end processing of Internet and finance to the western region, and the shelf rate of Western IDC is expected to increase rapidly.
3) solve the contradiction between energy consumption and dual carbon, and “state owned cloud” customers may become the main market. IDC is a high energy consumption industry, which needs to effectively stimulate the industrial chain and employment before it can be approved by the local government. Guiding “counting from the east to the west” will make full use of the land and energy consumption indicators in the West and drive the development of local digital economy industry. The IDC industrial chain needs to leverage the downstream trillion market to achieve the goal of stable growth. Therefore, during the 14th Five Year Plan period, the proportion of local governments, financial institutions, large central enterprises and state-owned enterprises on the cloud may further increase, and the market share of cloud services of the three operators is expected to further increase.
Investment advice.
1) in the short term, it is suggested to pay attention to the energy-saving transformation of IDC and the cloud network industry chain of operators. The policy requires that the pue of the computing power cluster of the national hub node reaches below 1.25, and the transformation and upgrading shall be enforced if the pue exceeds 1.5. With the implementation of counting from the east to the west, the implementation of local governments may be strengthened. For example, Shanghai has carried out IDC modeling and scheduling of more than 100 racks. According to the data of 2026 and 2021, the average demand of pue in South China is close to 49.1%. It is recommended to pay attention to China’s mainstream suppliers of indirect evaporative cooling, high-efficiency ups and modular preset data centers, such as Shenzhen Envicool Technology Co.Ltd(002837) , Nanjing Canatal Data-Centre Environmental Tech Co.Ltd(603912) , Yimikang Tech.Group.Co.Ltd(300249) , Kehua Data Co.Ltd(002335) , Shenzhen Kstar Science & Technology Co.Ltd(002518) , Zte Corporation(000063) .
The transformation cost of small data center is high, the possibility of shutdown and transfer is high, and the market pattern of data center will be further concentrated. Large data centers will directly benefit from the decline of network costs and the increase of shelf availability. When the market price stabilizes, the compound growth rate of rack capacity may exceed 20%, and the profit growth rate is expected to be higher than the revenue growth rate. It is suggested to pay attention to large IDC enterprises with regional advantages and national chain, such as Beijing Sinnet Technology Co.Ltd(300383) , Shanghai Baosight Software Co.Ltd(600845) , Guangdong Aofei Data Technology Co.Ltd(300738) , Century Internet and Wanguo data. And IDC manufacturers with certain scale and green operation experience in the western region, such as Mcc Meili Cloud Computing Industry Investment Co.Ltd(000815) , Shanghai Athub Co.Ltd(603881) .
Operators are the backbone of digital computing in the East and digital computing in the west, and pay attention to the opportunities of cloud industry chain brought by capital expenditure. At present, most computer rooms in the West are invested and built by operators, and operators have backbone networks and cloud dedicated lines covering the whole country, which will serve as the backbone of East digital computing and West computing. With the recovery of C-end ARPU value and the rise of b-end industrial Internet business, the valuation of operators is attractive. In the next two years, the capital expenditure of operators may focus on the cloud network, and will continue to increase the procurement of servers, switches and optical transmission equipment to further enhance their computing power. At present, the three major operators in the server market account for nearly 20% of the total. It is suggested to focus on Inspur Electronic Information Industry Co.Ltd(000977) , Xinhua III, Zte Corporation(000063) and the hyperfusion formed by the stripping of Huawei x86. In addition, the procurement proportion of national production servers is expected to further increase, and Kunpeng and haiguang series will directly benefit. It is suggested to pay attention to the information innovation industry chain. In terms of communication, DCI interconnection in the optical module market has sprung up in recent years. It is expected that the global DCI market will exceed US $7 billion in 2023, of which the value of coherent optical modules accounts for a very high proportion. It is a global trend to increase the proportion of lightweight and white box DCI. Ipoverwdm used for point-to-point interconnection of data center will greatly save equipment investment. It is recommended to pay attention to DCI related equipment module manufacturers Zte Corporation(000063) , Unisplendour Corporation Limited(000938) , Accelink Technologies Co.Ltd(002281) , dekeli (application for scientific innovation board), Eoptolink Technology Inc.Ltd(300502) , Zhongji Innolight Co.Ltd(300308) , etc.
2) from the medium-term perspective, the six cluster projects in the western region will be gradually implemented. The civil works will be carried out first. The pre construction cycle of IDC will invest in equipment procurement, including power supply, UPS, air conditioning, dynamic ring monitoring, cabinet, wiring, etc. It is noteworthy that the microgrid data center in the western region may be rapidly promoted. According to Siemens electric, the microgrid power generation consumed by the global data center may reach 30% in the future. It is mainly composed of distributed power generation, energy storage, energy conversion, monitoring and protection and other power electronic equipment to realize the local consumption of clean energy such as photovoltaic, wind power, hydropower and so on. The post construction cycle of IDC is to gradually deploy switches, optical modules and servers according to the needs of customers. The investment in Eastern digital computing and Western computing will continue to drive the demand for cloud IT infrastructure. Looking at the cloud IT industry chain, we believe that the server market is large, but the profit of the upstream chip pattern is better, and the optical module is expected to form a long-term growth logic in the dual boom of North America and China.
For a long time, it is suggested to pay attention to the back-end links of data element analysis, circulation and application under the background of digital economy.
We believe that the launch of “counting from the east to the west” is one of the implementation policies of the “14th five year plan” digital economy plan. Building a strategic science and technology industry around data value is an important main line of future development. We suggest paying attention to four aspects: 1) the landing of data applications based on cloud computing and AI: the advanced construction of large-scale data center provides sufficient data storage space and computational support for data analysis for the continuous landing of cloud computing and AI +. Under the condition of sufficient supply side, Once the demand is born, the industry will expand rapidly. It is suggested to pay attention to: Yonyou Network Technology Co.Ltd(600588) , Beijing Kingsoft Office Software Inc(688111) . 2) Digital finance focusing on the construction of digital RMB: both the Wuxi Online Offline Communication Information Technology Co.Ltd(300959) combined operation mode of banks in the future and the centralized management mode of digital RMB will generate a lot of data storage and analysis needs. The improvement of infrastructure will help the more stable development of digital finance. It is suggested to pay attention to: Grg Banking Equipment Co.Ltd(002152) , Yusys Technologies Co.Ltd(300674) . 3) New scenario of power informatization brought by “counting from the east to the west”: the data center with high power consumption can perfectly absorb local green energy, so as to reduce the problem of ultra long-distance transmission caused by spatial mismatch. This contains the informatization needs of microgrid and energy management system. It is suggested to pay attention to: Longshine Technology Group Co.Ltd(300682) and South Grid technology. 4) The further aggregation of data resources puts forward higher requirements for network security: with the implementation of “counting from the east to the west”, the needs of phase 2.0 and even phase 3.0 of network security are expected to be gradually released, and the scope of network security will gradually expand from data bearing itself to the whole process of data flow and data exchange before multi-agent. Suggestions: Sangfor Technologies Inc(300454) , Qi An Xin Technology Group Inc(688561) .
Risk tips
The progress of “counting from the east to the west” project is less than expected, the oversupply of data center leads to the decline of price, the slow landing of 5g applications leads to the slowdown of traffic growth, and the cloud access of local governments and enterprises is lower than expected.
