Last week was the last trading week of A-Shares in 2021. The CSI 300 index rose 0.39%, 25 of the 31 industries in Shenwan class rose and 6 fell. The overall trend of the communication industry was stronger than the market last week, rising by 2.94%, ranking 11th and second in the TMT industry. Last week, China Mobile abandoned the purchase of 743 million yuan, a record for a shares. From the operation data of China Mobile, as of the first half of this year, the asset scale of China Mobile exceeded 1.7 trillion yuan, the total number of base stations reached 5.28 million, covering more than 99.5% of the population in China, 4G base stations accounted for about 30% of the world, and 5g base stations accounted for about 35% of the world; It serves 950 million mobile users, more than 200 million household users, more than 15 million government and enterprise users, and has 980 million intelligent Internet of things connections, with the total connection scale ranking first in the world; The net profit has exceeded 100 billion yuan for many consecutive years, and the net profit margin and return on total assets rank first among the world’s first-class telecom operators, so the breaking probability is relatively small. In the long run, with the gradual construction of 5g and the gradual maturity of the business model, the operator is still a track worthy of investment. Continue to recommend the market and pay attention to the long-term investment value of the operator.
Key investment points:
One week’s industrial news: (1) the central government distributed a big gift package: a subsidy of 10 billion yuan to support the universal service of telecommunications; (2) China Radio and television Liang Xiaotao: 200000 700m5g base stations have been built, calling for in-depth promotion of co construction and sharing; (3) Omdia report: the number of global Gigabit broadband users will increase significantly to 50 million in 2022; (4) The amount of IPO abandonment of China Mobile reached 743 million yuan, a record for a shares; (5) The dust has settled! Ziguang group’s reorganization plan was voted through, and Zhao Weiguo did not vote against it; (6) Huawei handed over 634 billion yuan of transcripts: keep going forward in 2021, and 2022 can be expected in the future; (7) Omdia observation: main development trends of global smart home market in October 2021; (8) Musk’s satellite chain crashed into the Chinese space station; (9) It is reported that Intel expands its global layout and plans to expand the capacity of wafer factories by 30% within five years.
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 development plan of the information and communication industry in the 14th five year plan, the future construction goal of 5g 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, so as to drive 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 and operation and maintenance industry chain has increased significantly, The cloud network construction of data center and 5g2b 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 development in 2022. It is suggested to pay attention to the leading optical module enterprises on the digital communication side. (3) Things
Networking 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 capable of transplanting the original data center liquid cooling technology to the energy storage system.
Risk factors: increased trade friction, China’s 5g construction does not meet expectations, the slowdown of global cloud computing construction, and the price fluctuation of upstream raw materials.
