Industry core view:
The last trading week was the ninth trading week of A-Shares in 2022. The CSI 300 index fell 4.22%, with 0 of the 31 industries in the Shenwan level rising and 31 falling. The overall trend of the communication industry was stronger than the market last week, down 3.6%, ranking seventh and first in the TMT industry. Recently, the national development and Reform Commission, the central network information office, the Ministry of industry and information technology and the National Energy Administration jointly issued a notice, agreeing to start the construction of National Computing hub nodes in 8 places, including Beijing, Tianjin and Hebei, the Yangtze River Delta, Guangdong, Hong Kong, Macao, Dawan District, Chengdu and Chongqing, Inner Mongolia, Guizhou, Gansu and Ningxia, and planned 10 national data center clusters. So far, the overall layout design of the national integrated big data center system has been completed, and the “counting from the east to the west” project has been officially launched. The project of “counting from the east to the west” has four great meanings. First, improve the overall computing power level of the country; Second, green and low-carbon; Third, promote the coordinated development of the East and the West; Fourth, the project of “counting from the east to the west” has a large investment scale and strong driving effect. As a national strategic project, the corresponding ecosystem construction of “East digital West computing” is a medium and long-term complex process, which needs the cooperation of the whole industrial chain. Through the construction of computing hub and data center cluster, the investment in various industries in the industrial chain will be effectively expanded. It is suggested to continue to pay attention to the relevant investment opportunities in East digital West computing and digital economy.
Key investment points:
One week industry news: (1) China Telecom Corporation Limited(601728) : the net profit is expected to increase by 23% – 25% year-on-year in 2021; (2) China Mobile: it is estimated that the revenue will be about 850 billion yuan and the net profit will be 114.3-116.5 billion yuan in 2021; (3) China United Network Communications Limited(600050) in 2021, the revenue was 327.9 billion and the net profit was 14.4 billion, with a year-on-year increase of 15%; (4) The revenue of China Tower in 2021 was 86.585 billion yuan, with high growth of two wing business; (5) Moderately increase capital expenditure: China United Network Communications Limited(600050) plans to complete the construction of 5g network scale in about three years; (6) 30 billion yuan! China’s iron tower has significantly increased its capital expenditure in 2022; (7) The total scale exceeds 76.983 billion! The national communication engineering design standard of China Mobile was opened; (8) It’s decided to build 10 national data center clusters!; (9) Top ten telecom infrastructure brands in the world: Huawei takes the lead and two optical communication enterprises are shortlisted; (10) Raise 600 million yuan to invest in 5g optical modules and other projects: Wuhan Liante will land on the gem; (11) Light of China on OFC: 800g optical module has become the main new product.
Investment suggestions:
With the gradual advancement of 5g construction and the continuous high growth of cloud computing construction scale, the fundamentals of the communication industry may continue to improve in 2022. In terms of 5g construction, with the implementation of the “14th five year plan” for the development of information and communication industry, the goal of 5g construction in the future is clear. In the next three to five years, 5g construction will also maintain a stable pace of construction investment. However, with the gradual progress of construction, the downstream supporting applications will gradually mature, thus driving the relevant construction of 5g again.
In the future when the structural market in the communication industry continues to evolve, we suggest paying attention to four investment tracks in the communication industry: (1) operators & equipment manufacturers: 5g construction continues to promote, and the prosperity of traditional communication business is rising. With the expansion of 5g construction, the performance of communication construction, operation and maintenance industrial chain has increased significantly, The cloud network construction of data center and 5g 2B service also opens new growth space for operators & communication equipment manufacturers. (2) Optical module: with a new round of demand growth and the promotion of optical module technology, the industry is expected to usher in a new round of double clicking in 2022. It is suggested to pay attention to the leading optical module enterprises on the digital communication side. (3) Internet of things module: in the next two years, the Internet of vehicles module will still be one of the main directions of the future market growth of the Internet of things module. It is suggested to pay attention to the leading enterprises with deep layout in the Internet of vehicles industrial chain. (4) Temperature control: it is suggested to pay attention to some leading temperature control enterprises that have the ability to transplant the original data center liquid cooling technology to the energy storage system.
Risk factors:
Slow down the price fluctuation of upstream raw materials.
