Investment summary:
Talk every Monday:
The two sessions, which attracted much attention this week, were officially held. This year’s government work report of the State Council once again mentioned strengthening the construction of digital economy and strengthening the overall layout of Digital China construction. Build digital information infrastructure, promote 5g large-scale application, and promote industrial digital transformation.
Increase the promotion of 5g application, and 5g development gradually moves from network construction to large-scale application. The content of 5g new infrastructure in the report has changed from “increasing network construction” in 2021 to “promoting large-scale application” in 2022.
China’s 5g network construction is in a leading position in the world. The principle of appropriate advance is adopted, and the investment cycle is expected to be prolonged. It is estimated that the overall capital expenditure of the three operators in 2022 will be basically the same as that in 2021, which is estimated to be about 340 billion yuan. According to the data of the press conference of the Ministry of industry and information technology, it is planned to build more than 6 Shenzhen Fountain Corporation(000005) g base stations in 2022. It is estimated that the number of 5g base stations will exceed 2 million by the end of 2022.
The large-scale promotion of 5g application will become an important driver of 5g development. The Ministry of industry and information technology thoroughly implemented the 5g application “sailing” action plan, continued to hold the “blooming Cup” 5g application competition, excavated more new achievements and technologies, promoted the promotion and implementation, and emerged a number of excellent application scenario demonstrations of “5g + industry”. The large-scale promotion of 5g application is expected to realize the transformation from “model room” to “commercial housing”.
The work report did not mention the speed-up and fee reduction of operators, and the accelerated transformation of operators is expected to usher in high-quality development.
Since 2015, the state has issued several policies requiring operators to “speed up and reduce fees”, such as canceling roaming and long-distance fees in China, reducing the unit price of mobile traffic, canceling traffic “roaming fees”, reducing the use fees of home broadband, enterprise broadband and special lines, and realizing number carrying network transfer nationwide, so as to help entrepreneurship and innovation and improve people’s livelihood. At the same time, due to the disappearance of demographic dividend, the income growth of operators is weak, and the development has entered a bottleneck period.
The increase in the penetration rate of 5g package users drives the Arup value of operators. Operators give up the price war and improve user stickiness by providing better and differentiated services. At the same time, operators vigorously develop new businesses such as “cloud computing” and take advantage of their own network advantages to deeply participate in the process of digital industrialization and industrial digitization, This is expected to open the second curve of the whole industry and be optimistic about the long-term investment value of operators.
Market review:
This week (202202.28202203.04), the Shanghai Composite Index, Shenzhen Component Index and gem index increased by – 0.11%, – 2.93%, – 3.75% respectively, and the Shenwan communication index increased by – 1.49%, ranking 17th among the 28 primary industries of Shenwan.
Performance of individual stocks in the communication sector this week:
The top five stock price increases are: Fujian Start Group Co.Ltd(600734) , Hengxin Shambala Culture Co.Ltd(300081) , Zhong Fu Tong Group Co.Ltd(300560) , Hangzhou Freely Communication Co.Ltd(603602) , Wenzhou Yihua Connector Co.Ltd(002897)
The top five stock price declines are: Hangzhou Prevail Optoelectronic Equipment Co.Ltd(300710) , Nova Technology Corporation Limited(300921) , Zhejiang Zhaolong Interconnect Technology Co.Limited(300913) , Tianjin 712 Communication & Broadcasting Co.Ltd(603712) , Sunsea Aiot Technology Co.Ltd(002313)
Investment strategy: (1) 5g network coverage continues to improve, the number of 5g base stations exceeds 1.4 million, and the leading 5g equipment manufacturer is continuously recommended: Zte Corporation(000063) ; (2) The increase in the penetration rate of 5g package users drives the Arup value of operators. Operators give up the price war and improve user stickiness by providing more high-quality and differentiated services. It is suggested to pay attention to: China Mobile; (3) The development of the Internet of things industry has entered the fast lane, focusing on the investment opportunities of vehicle communication modules. It is suggested to pay attention to Fibocom Wireless Inc(300638) , Quectel Wireless Solutions Co.Ltd(603236) ; (4) In the context of double carbon, green energy conservation has become the main theme. The key recommendation is precision temperature control faucet: Shenzhen Envicool Technology Co.Ltd(002837) .
Risk tip: the development of 5g is not as expected, the trade friction between China and the United States has further escalated, and the epidemic has further spread.
