Investment summary:
Talk every Monday:
Recently China Telecom Corporation Limited(601728) released the performance in 2021, and the overall operation is stable and good.
The network construction has achieved remarkable results, and the 5g network has been fully covered. The company and China United Network Communications Limited(600050) jointly build and share 5g base stations, with a total of more than 690000 stations. The 5g network covers all cities and counties and some developed towns and townships in China.
The number of users continued to grow, and 5g penetration ranked first. The number of mobile users increased by 21.41 million, ranking first in the industry for four consecutive years; 5g penetration rate is 50.4%, keeping the industry leading.
The company implemented the "cloud to digital" strategy, and the scale of industrial digital revenue is nearly 100 billion, which has become an important driving force for growth. In 2021, the revenue of industrial digital business reached 98.9 billion yuan, a year-on-year increase of 19.4%. Tianyiyun's market position continued to improve and actively explored the possibility of spin off and listing.
In 2021, the revenue of Tianyi cloud reached 27.9 billion yuan, with a year-on-year increase of 102%, ranking the first camp in the industry and maintaining the leading position in the government public cloud market. According to the latest data from IDC, Tianyi cloud's public cloud IAAs + PAAS market share reached 9.0%, with a year-on-year increase of 1.6%.
In 2021 China Telecom Corporation Limited(601728) established Tianyi cloud Technology Co., Ltd. At the same time, Tianyi cloud Technology Co., Ltd. carried out equity diversification reform, and signed capital and share increase framework agreements with four large state-owned enterprises China Telecom Corporation Limited(601728) will actively explore the possibility of Tianyi cloud's spin off and listing under the condition of complying with the regulatory rules.
We believe that the background of China Telecom Corporation Limited(601728) "national team" makes it have natural identity and credibility, the integrated infrastructure of "cloud network edge end" and strong network security capability, and we are optimistic about the follow-up development of Tianyi cloud. The capital expenditure in 2022 is planned to be 93 billion yuan, focusing on industrial digitization.
In the whole year, capital expenditure was 86.7 billion yuan, 5g investment was 38 billion yuan, and industrial digitization investment was 17.3 billion yuan.
The proportion of network investment decreased in 2022, focusing on precision investment in new growth points. 4G and 5g network investment decreased by 12.1% year-on-year, and broadband Internet investment decreased by 0.6% year-on-year. The investment in industrial digitization is expected to increase by 62% year-on-year, of which IDC is expected to invest 6.5 billion yuan, the target is to add 45000 racks, the computing power investment is 14 billion yuan, and 160000 cloud servers are planned to be added.
We believe that the whole investment direction of 5g industry is also gradually changing from network equipment end to 5g application end. We are strongly optimistic about investment opportunities in fields such as Internet of things, Internet of vehicles, VR & AR and so on.
Market review:
This week (from March 14, 2022 to March 18, 2022), the Shanghai Composite Index, Shenzhen Component Index and gem index increased by - 1.77%, - 0.95% and 1.81% respectively, and the Shenwan communication index increased by - 1.36%, ranking at the first level of Shenwan 28
Ranked 13th in the industry. Performance of individual stocks in the communication sector this week:
The top five stock price increases are: Routon Electronic Co.Ltd(600355) , Zhong Fu Tong Group Co.Ltd(300560) , Super Telecom Co.Ltd(603322) , Fujian Start Group Co.Ltd(600734) , Hangzhou Anysoft Information Technology Co.Ltd(300571)
The top five stock price declines are: Hangzhou Freely Communication Co.Ltd(603602) , Beijing E-Techstar Co.Ltd(300513) , Nova Technology Corporation Limited(300921) , Jiangsu Yitong High-Tech Co.Ltd(300211) , Bizconf Telecom Co.Ltd(300578)
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.
