The policy escorts the network power, and the prosperity of the communication industry is expected to improve marginally
In the context of the competition between China and the United States in science and technology, the performance of the communication industry index was poor in the early stage due to the “Huawei incident” and the global chip emergency. With the emphasis on “promoting 5g large-scale application” in the two sessions in 2022, and the “14th five year plan” for the development of information and communication industry and the “sailing” action plan for 5g application (20212023) “issued by the Ministry of industry and information technology in the second half of 2021, the policy escort will undoubtedly inject a shot in the arm into the development of the future communication industry. With the continuous expansion and deepening of 5g network signals (especially the full coverage of 700m gold frequency), the steady improvement of the popularity of 5g terminals and the continuous landing of 5g applications, the performance of the communication industry index is expected to reverse at the bottom and the prosperity of the industry is expected to improve marginally.
The surge in data traffic is the general trend, and IDC and optical networks are expected to exceed expectations due to technological changes
The continuous promotion of “computing from the east to the west”, the popularization of gigabit network speed and enterprise cloud will further accelerate the outbreak of traffic: the per capita Dou of 2C terminal will double almost every 1-2 years, and the 2B terminal shows an exponential growth trend. Looking back on the great development trend of data traffic in the past decade, it is expected to continue to the next decade. The surge in data traffic has forced the continuous technological upgrading of data centers and optical networks as infrastructure. Unlike “5g China leading”, there is still a big gap between China’s super large data centers and high-speed optical modules (including optical chips) compared with the United States; Technological innovations such as efficient networking, green energy saving and silicon optical solutions and domestic alternatives bring new opportunities, and the industry concentration is expected to improve. We need to focus on the investment opportunities of double rise of valuation and EPS brought by the marginal changes of individual stocks in IDC and optical network sub sectors.
Yuancosmos and others are expected to open a new window of 5g applications, and the consensus of “5g easy to use” will open a new market space
The number of 5g application layers such as Internet of things / Internet of vehicles, ultra-high definition video service, AR / VR / metauniverse is endless, and the investment direction of 5g has shifted from the equipment side to the application side. The popularity of 5g application is the key to 5g ease of use, but the market does not recognize 5g ease of use, so there is a large poor expectation. Different from other industries, economies of scale are particularly important in the communication industry. The marginal improvement of 5g continuous coverage and deep coverage will further improve the utilization rate of 5g network (especially after 700m is used as the golden frequency to complete 5g coverage, 5g signal quality is better than 4G or even better than 2G, and the network rate is three times that of 4G. 700m will bring the change from 5g availability to good use), With more users, relevant applications will emerge as the times require and a hundred flowers will bloom. We believe that the 5g Internet of things policy will gradually promote the development of 5g Internet of things from the “Yuanmen” of the universe to the “Yuanxin” of the Internet of things, which is expected to gradually promote the development of 5g Internet of things; The trillion market space of 5g applications will be further opened, ushering in the golden age of 5g easy to use.
Investment suggestion: 5g application and the new infrastructure of “East data and West computing” are the key directions of communication exceeding expectations in the future
We believe that the investment focus of the communication industry is shifting from 5g equipment to application, and the valuation first and then the fundamentals are expected to rise. Proposals to focus on targets: the light module of the cosmic infrastructure of the meta universe: the light module of the cosmic infrastructure of the metacosmic infrastructure: the light module of the cosmic infrastructure of the meta universe: the light module of the cosmic infrastructure of the metacuniverse: the 3 Zuming Bean Products Co.Ltd(003030) 30303030303030303030303030303030303030303030303030303030303030303030303030303030303030303030303030303030303030303030303030303030303030303030303030303030 \ ( Montnets Cloud Technology Group Co.Ltd(002123) ). At the same time, the communication operator China Mobile (600941) also needs to focus on as a long-term configuration direction.
Risk tips: the price of raw material chips continues to rise; Global epidemic impact and uncertainty of foreign policy environment; 5g commercial promotion was less than expected.
