Ping An View:
Market review and investment logic: the industry market presents an obvious shock trend. In 2021, the overall performance of Listed Companies in the industry was poor and the market expectation was relatively low. Therefore, the industry market lacked fundamental support. Since the beginning of the year, the plate market has shown an obvious shock trend. Looking forward to next year, new infrastructure and new applications will bring new it needs, and smart cars, VR and other applications are expected to explode. The market’s risk appetite for the computer industry will increase. If we take into account that the P / E ratio of the industry is currently at a historical low, we can make a comprehensive judgment that the market will be better next year.
Online and digital have become the “new normal”, and the speed-up of new infrastructure is conducive to new applications. Under the covid-19 epidemic, online and digital transformation is accelerating, and information and communication infrastructure has played an important role. China’s digital economy is developing rapidly, but problems such as uneven distribution of infrastructure construction, low degree of data protection and application, and the gap between cloud computing infrastructure and developed countries are becoming prominent. During the 14th Five Year Plan period, the state will continue to increase the construction of a new generation of information and communication infrastructure, data and computing facilities and integration infrastructure. Large scale and high-level investment will drive the rapid development of upper layer applications.
“Single vehicle intelligence + vehicle road coordination”, the development of intelligent network will be accelerated. At present, China’s intelligent network connected vehicle is in the development period, and many manufacturers have made it clear that L4 model will be mass produced in 2025. China’s automatic driving vehicle chooses the fusion route of “cycling intelligence plus vehicle road coordination”. From the end of the car, the car is moving towards intelligence and networking. Since 2021, the level of vehicle intelligence is improving, and the penetration rate of L2 ADAS has increased significantly. At the same time, Networking (Intelligent cockpit) is landing first, and is evolving to the era of 3.0 and 4.0. From the roadside point of view, the development of vehicle road integration is the direction, and the improvement of roadside intelligence is expected to accelerate the landing of intelligent networked vehicles.
With the support of multiple factors such as technology evolution, the development of VR industry will enter the fast lane. In 2020, oculus Quest 2, a popular VR head display product, was launched, driving the rapid growth of VR head display product shipments in 2020. We believe that the high growth of VR industry since 2020 is driven by the resonance of supply, demand and external environment under the background of continuous breakthroughs in key core technologies and continuous improvement of user experience. It is expected that VR industry will enter the fast lane of development since then. In 2021, the global sales volume of VR head display equipment will reach the critical point of tens of millions, and the content and ecosystem are also realizing leapfrog development.
Investment suggestion: the acceleration of new infrastructure will support more application innovation and help the vigorous development of digital economy. At present, new applications such as “5g + industrial Internet”, “cloud computing + AI”, data security and cloud security are being implemented, and new applications such as “5g + VR / AR” are expected to break out. Looking forward to 2022, we believe that new infrastructure and new applications will bring new it needs, and smart cars, VR and other tracks will usher in better investment opportunities. We maintain the industry’s “stronger than the market” rating. Strongly recommend Thunder Software Technology Co.Ltd(300496) , Venustech Group Inc(002439) , Sangfor Technologies Inc(300454) , Dbappsecurity Co.Ltd(688023) , and pay attention to Arcsoft Corporation Limited(688088) , Huizhou Desay Sv Automotive Co.Ltd(002920) , China Transinfo Technology Co.Ltd(002373) , Autel Intelligent Technology Corp.Ltd(688208) .
Risk tips: 1) the demand growth of downstream market is less than expected; 2) Technology R & D progress is less than expected; 3) Market competition intensifies.
