The communication industry covers domestic substitution, double carbon revolution and technological upgrading. In the areas we focus on, the Internet of things, including on-board communication, benefits from domestic substitution and technology upgrading at the same time; Communication services and software in the field of data center and new power system are jointly promoted by the double carbon revolution and technological upgrading; Military communications and industrial digitization benefit from technological upgrading.
The digital communication industry chain benefits from industry cycle and technology upgrading. As a capital intensive and energy intensive industry, data center will face great pressure in 2021. According to the continuous increase in traffic demand of Yunda, Wuyi, yuanuniverse and other industries, the continuous growth of Intel and NVIDIA data center business, and the comprehensive judgment of IDC industry’s own cycle, the data center industry will usher in fundamental changes. Recommend optical communication products in carbon neutral data center, UDC and data communication.
Demand drives the growth of new energy, military communications and the Internet of things. The value chain at the manufacturing end of vehicle enterprises has been flattened, the value of vehicle connectors has increased, and 5g vehicle communication modules have been put into commercial use. The increased penetration of new energy power generation puts forward higher requirements for the support capacity of the power grid. The State Grid actively promotes the upgrading of the energy Internet and the China Southern Power Grid promotes the digital transformation of the power grid. Military communications benefits from defense capital expenditure and asset securitization of central enterprises. The high-end substitution of IOT module continues.
The valuation level of telecom operators is at the bottom. From the perspective of technology iteration and business development, operators in 5g era will change from basic communication service providers to integrated digital service providers. While traditional services are improving, industrial digital services will open long-term growth space for operators.
Risk statement
Systemic risk, industry demand is lower than expected, and market competition intensifies.
