Current investment tips:
Event: Recently, the central network security and Information Technology Commission issued the National Informatization Plan for the 14th five year plan, and eight departments including the Ministry of industry and information technology and the national development and Reform Commission issued the intelligent manufacturing development plan for the 14th five year plan.
“Ubiquitous Zhilian” is the key word, which is optimistic about the prosperity of hardware infrastructure and application links. Compared with the development goals in the 13th five year plan for national informatization, which mainly focus on penetration, coverage and scale, the 14th five year plan is more inclined to the investment intensity of innovation ability and the achievements of industrial transformation, indicating that scientific and technological innovation has begun to cut from quantity and scale to industry scenario.
In addition, “building a ubiquitous digital infrastructure system of Zhilian” has become the first major task. It is expected that the development of 5g innovative applications and intelligent networking will have a great demand for network equipment, optical communication, communication modules and intelligent applications on the hardware side. We are optimistic about the prosperity of hardware infrastructure and application links, and the energy Internet is also an incremental direction.
The importance of computing facilities and data elements is clarified, and the data center and security links benefit. The data center is the necessary basic support for the bottom layer of innovative applications. The plan points out that “promoting the construction of hierarchical and classified distribution of data center” is in line with our judgment of long-term head concentration, scale victory and energy conservation in the industry. We are optimistic about the investment opportunities of head data Center manufacturers and temperature control and energy conservation. In addition, the planning defines the importance of data elements, and the related data application and network security should also be paid attention to.
The innovative application of Zhilian, represented by the Internet of vehicles, is clear, and the construction of relevant infrastructure is expected to be accelerated. The plan proposes to speed up the construction of intelligent connected vehicle road infrastructure and 5g-v2x vehicle networking demonstration network, so as to realize the application of advanced automatic driving above L3 level. According to the goal put forward in the intelligent networked vehicle technology roadmap 2.0 in November 2020, the assembly rate of new c-v2x terminals in China will reach 50% by 2025. In addition, GSMA predicts that by 2027, the number of c-v2x connections will reach 831 million, accounting for 20% of all Internet of things connections, and the market space will reach US $9 billion. The electrification, networking and intelligence of vehicles will also enhance the value of connectors / controllers. In addition, the plan proposes to accelerate the layout of satellite communication network and build an aerospace information network hub, which is conducive to the further sinking of Beidou industrial chain application.
The intelligent manufacturing plan shows that industrial innovation has moved from pilot to promotion, and the industrial Internet has become an important infrastructure. In the past, China’s intelligent manufacturing applications were mainly pilot projects, and the market had a vague understanding of business model and profitability; However, since 2021, the traditional industrial fields represented by steel, chemical industry and electric power have begun to form domestic and large-scale intelligent applications. Intelligent manufacturing has begun to move towards marketization, from supply driven to demand driven, and “double carbon” has also accelerated the penetration of industry intelligence.
More emphasis is placed on industrialization ecology and localization substitution, and both software and hardware are expected to benefit. Local intelligent manufacturing began to enter the link of high value and quantity, represented by industrial automation control and tool software. We are optimistic that the communication industry chain represented by zhilianhua and hardware infrastructure will extend from the midstream equipment manufacturing with advantages in the past to the upstream core value link.
Related targets: 1) related to hardware infrastructure, 5g equipment / switch / router / server pays attention to 5g main equipment, Xinhua III, Fujian Star-Net Communication Co.Ltd(002396) (Ruijie network), etc., IDC pays attention to Shanghai Baosight Software Co.Ltd(600845) , Guangdong Aofei Data Technology Co.Ltd(300738) and Beijing Sinnet Technology Co.Ltd(300383) , Wanguo data, etc., optical devices pay attention to Eoptolink Technology Inc.Ltd(300502) , Advanced Fiber Resources (Zhuhai) Ltd(300620) , Suzhou Tfc Optical Communication Co.Ltd(300394) , Zhongji Innolight Co.Ltd(300308) , etc. 2) Related to Zhilian, intelligent manufacturing pays attention to Shanghai Baosight Software Co.Ltd(600845) , Internet of things modules pay attention to Fibocom Wireless Inc(300638) , Quectel Wireless Solutions Co.Ltd(603236) , Meig Smart Technology Co.Ltd(002881) , controllers / connectors pay attention to Shenzhen H&T Intelligent Control Co.Ltd(002402) , Suzhou Recodeal Interconnect System Co.Ltd(688800) , Shenzhen Topband Co.Ltd(002139) , high-precision positioning Shanghai Huace Navigation Technology Ltd(300627) , crystal vibration Tkd Science And Technology Co.Ltd(603738) , and fine wire Xinya Electronic Co.Ltd(605277) .
Risk tip: the extension of the industrial chain to the “neck” field may not meet expectations; Macroeconomic fluctuations may have an impact on the downstream prosperity and demand of zhilianhua and hardware infrastructure.
(Shanghai Shenyin Wanguo Securities Research Institute)
