Optical module technology has changed rapidly, the share of Chinese manufacturers has increased significantly, and the market position has improved significantly
Optical modules occupy the middle reaches of the industrial chain, with fierce competition in the industry. In recent years, the share of Chinese manufacturers has increased significantly and their status has improved significantly. The technology iteration cycle in the downstream digital communication market is short, so manufacturers focus on the first mover advantage in the technology change period, and the core competitiveness is the leading cost and large-scale delivery ability in the mature period. The gross profit margin of access side products in the telecom market is low, and the focus continues to lead the cost.
A new round of data flow investment is accelerating, the inflection point of the industry is coming, and the technology change of data communication optical module is advancing at a high speed
From the marginal changes of the industry this year, the demand began to improve marginally in the second half of the year after the low at the beginning of the year. There was a shortage of supply of some raw materials and the price rose. The supply chain of the head manufacturers was stable and the goods were sufficient, and the general chip manufacturers gave priority to ensuring the supply of the head big customers. Therefore, it was basically unaffected, but the small and medium-sized manufacturers were relatively affected by the shortage of raw materials. In addition, after the expansion of optical module manufacturers last year, the inventory backlog is relatively serious this year, which is basically cleared after entering the fourth quarter. After experiencing the low point at the beginning of the year, the scene of downstream digital communication city has entered the upward cycle. Looking forward to the future, we believe that a new round of data flow investment wave will rise again, the data communication market will enter a new round of boom upward cycle in the next 3 ~ 5 years, and the inflection point of the upstream optical module industry will come. In terms of technology change, the 400g large-scale industry has entered the early stage of 800g iteration. Looking ahead to next year, we believe that the traditional discrete 800g scale mass production is approaching, and we need to focus on the progress of manufacturers in the upcoming technology change bonus period.
The overall atmosphere of the telecom city scene warmed up, and 10g PON accelerated penetration
In the first half of the year, the demand was weak, customers eliminated inventory, orders were delayed, the centralized purchase of base stations began to recover in the middle of the year, and the prosperity picked up. Looking forward to next year, with the policy overweight and the return of the two major operators to a shares, their capital expenditure is expected to grow steadily, and the recovery trend of prosperity is expected to continue. At the level of optical module manufacturers, factors such as weak demand, fierce competition and rising raw material prices accelerated the liquidation of small factories in the first half of the year, and the price trend is expected to be better after the liquidation. In addition, 10g PON accelerated penetration will also bring considerable increment.
Investment advice
The flow catalysis industry has accelerated into the upward cycle. We suggest to focus on the industry leaders Zhongji Innolight Co.Ltd(300308) and Eoptolink Technology Inc.Ltd(300502) focusing on the digital communication market. The core advantages are the stable supply chain system and large-scale delivery capacity. At the same time, it is making progress in the 800g field, and it is expected to seize the dividend window period of technology change in the future. It is suggested to focus on the industry leader Huagong Tech Company Limited(000988) focusing on the telecom market. At the same time, it is suggested to pay attention to Hengtong Optic-Electric Co.Ltd(600487) , Broadex Technologies Co.Ltd(300548) , Accelink Technologies Co.Ltd(002281) , T&S Communications Co.Ltd(300570) , Cig Shanghai Co.Ltd(603083) , Hangzhou Anysoft Information Technology Co.Ltd(300571) , Sichuan Tianyi Comheart Telecom Co.Ltd(300504) , Shenzhen Gongjin Electronics Co.Ltd(603118) , China Bester Group Telecom Co.Ltd(603220) , Tongyu Communication Inc(002792) in the optical communication industry.
Risk statement
The demand of telecom market / data communication market is lower than expected, the market competition is intensified, and the price of optical module has fallen too much
