This week, the CSI 300 fell 0.94% and the gem rose 1.81%, of which the communication sector fell 2.05%, and the price performance of the sector was weaker than the market; The turnover rate of 126 constituent stocks of the communication (CITIC) index this week was 2.13%; In the same period, the turnover rate of 300 constituent stocks in Shanghai and Shenzhen was 0.53%, and the overall activity of the sector was stronger than that of the market.
In terms of individual stocks in the communications sector, the top five companies that rose this week were: Routon Electronic Co.Ltd(600355) (34.38%), Zhong Fu Tong Group Co.Ltd(300560) (31.49%), Super Telecom Co.Ltd(603322) (23.20%), Hangzhou Anysoft Information Technology Co.Ltd(300571) (15.12%), Hengbao Co.Ltd(002104) (13.26%); The top five companies with declines were: Hangzhou Freely Communication Co.Ltd(603602) (- 23.04%), Jiangsu Yitong High-Tech Co.Ltd(300211) (- 9.75%), Bizconf Telecom Co.Ltd(300578) (- 9.74%), Gospell Digital Technology Co.Ltd(002848) (- 8.75%), Broadex Technologies Co.Ltd(300548) (- 8.49%).
The annual revenue and net profit of Telecom increased, and the cloud revolution reform achieved initial results China Telecom Corporation Limited(601728) recently released the annual report for 2021. The annual operating revenue was 434.2 billion yuan, an increase of 11.3% year-on-year, of which the service revenue was 402.8 billion yuan, an increase of 7.8% year-on-year. The net profit attributable to the parent company was 25.952 billion yuan, a year-on-year increase of 24.4%. In terms of business, (1) C-end business: mobile communication service revenue was 184.2 billion yuan, a year-on-year increase of 4.9%; The income from fixed network and smart family services was 113.5 billion yuan, a year-on-year increase of 4.1%, of which the income of smart family increased by 25.1%. In terms of the number of users, the company’s mobile users reached 372 million at the end of 2021, with a net increase of 21.41 million, including 188 million 5g package users, with a penetration rate of 50.4%. The ARPU of mobile users was 45 yuan, with a year-on-year increase of 2.0%. The volume and price increased simultaneously. There were nearly 170 million wired broadband users, with a net increase of 11.18 million, and the comprehensive ARPU of broadband increased by 3.4% year-on-year, reaching 45.9 yuan. The company expects a net increase of 15 million mobile users and 80 million 5g package users in 2022, The net increase of broadband users is 8 million. It is expected that with the increase of 5g penetration and the weakening trend of speed increase and fee reduction, the C-end business will continue to improve. (2) B-end business: the company’s industrial digital business revenue reached 98.9 billion yuan in 21 years, with a year-on-year increase of 19.4%, and the growth rate was significantly accelerated, becoming the main force of performance growth; During the reporting period, Tianyi cloud achieved breakthroughs in core technologies, comprehensively upgraded to distributed cloud infrastructure, operating systems and product capabilities, extended its computing power to edge nodes, improved its market competitiveness, and doubled its revenue to 27.9 billion yuan; IDC’s revenue is 31.6 billion yuan and its market share remains the first in the industry. On the whole, the company’s “cloud to digital transformation” strategy has achieved preliminary results, the development and upgrading of individual, family, government and enterprise intelligent information service capabilities, and the continuous enhancement of scientific and technological innovation capabilities.
Optimize the capital expenditure structure and focus on industrial digitization. In 2021, the company’s capital expenditure was 86.723 billion yuan, with a slight year-on-year increase of 2.27%, slightly lower than the budget of 87 billion yuan at the beginning of the year, of which 5g capital expenditure was 38 billion yuan, with a year-on-year decrease of 3.1%, accounting for 43.82%, and industrial digital investment was 17.3 billion yuan, with a year-on-year increase of 4.35pct to 19.95%. In the future, the proportion of capital expenditure in revenue will continue to decrease, with the growth rate lower than that of revenue and profit. The company will further strengthen precision investment and improve investment efficiency. In 2022, the planned capital expenditure is 93 billion yuan, of which the 5g network investment is 34 billion yuan, a year-on-year decrease of 10.5%. It will focus on strengthening the investment in industrial digitization. It is expected to invest 27.9 billion yuan, a year-on-year increase of 62%, and the proportion of capital expenditure will increase to 30%, of which IDC is expected to invest 6.5 billion yuan, The goal is to add 45000 racks, invest 14 billion yuan in computing power (cloud resources), and plan to add 160000 cloud servers. According to the company’s communication, 5g construction is expected to be mainly used to improve network coverage and capacity expansion in the future, and the investment scale of 5g will show a steady downward trend. In terms of expenditure structure, the focus of the company’s capital expenditure is shifting from 5g to b-end. The company is the largest IDC service provider in China, with more than 700 data centers and 470000 racks. At the same time, it has built the ROADM all-optical transmission network with the largest capacity in the world, accelerated the construction of gigabit optical network, continuously improved the optical network capacity, and actively built new information infrastructure. Under the guidance of industrial policies such as digital economy and computing from east to west, the company will give full play to the advantages of cloud network integration and benefit from the high prosperity of the industry.
More than half of the annual results were disclosed, focusing on the booming tracks such as the Internet of things, the Internet of vehicles and optical devices. So far, more than half of the 247 listed companies in the communication industry we are concerned about have disclosed the performance forecast or annual report for 21 years, of which more than 90 companies are expected to achieve growth. In terms of breakdown, telecom operators have seen steady growth throughout the year. The Internet of things and car networking racetracks have continued to boom, application scenarios have been broaden, and related companies have seen high growth. Upstream chip makers Hanwei Electronics Group Corporation(300007) 7 \ (521.55%), Internet of things modules Quectel Wireless Solutions Co.Ltd(603236) (85.95%) and Meig Smart Technology Co.Ltd(002881) (328.21%) are mainly driven by the expansion of downstream demand, with a significant increase in module shipments. Terminal applications Goldcard Smart Group Co.Ltd(300349) (150.00%) and Queclink Wireless Solutions Co.Ltd(300590) (86.81%). The acceleration of smart cars has accelerated to accelerate the acceleration of smart cars, driving the performance growth of manufacturers of connectors, controllers, and high-precision navigation. Smart cockcockpits and intelligent driving Foryou Corporation(002906) \ (5.50%), inertial navigation Shanghai Huace Navigation Technology Ltd(300627) (48.16%). Optical devices and optical modules Advanced Fiber Resources (Zhuhai) Ltd(300620) (125.18%), Suzhou Tfc Optical Communication Co.Ltd(300394) (11.48%), Broadex Technologies Co.Ltd(300548) (80.88%), Eoptolink Technology Inc.Ltd(300502) (34.21%). The development of digital economy and new infrastructure drives the demand for upstream optical devices and optical modules. The localization process of industrial chain extends from optical modules to optical chips and optical devices, which is expected to drive the increase of industrial value.
Investment suggestions: Internet of things and car Networking: Quectel Wireless Solutions Co.Ltd(603236) \ etc; On board connector: Suzhou Recodeal Interconnect System Co.Ltd(688800) , Wenzhou Yihua Connector Co.Ltd(002897) ; Intelligent controller: Shenzhen Topband Co.Ltd(002139) , Shenzhen H&T Intelligent Control Co.Ltd(002402) , Shenzhen Longood Intelligent Electric Co.Ltd(300543) , Shenzhen Bestek Technology Co.Ltd(300822) ; Optical devices and optical modules: Eoptolink Technology Inc.Ltd(300502) , Suzhou Tfc Optical Communication Co.Ltd(300394) , Accelink Technologies Co.Ltd(002281) ; Focus on Data Center: Shanghai Baosight Software Co.Ltd(600845) , Kehua Data Co.Ltd(002335) , Beijing Sinnet Technology Co.Ltd(300383) , etc; Equipment manufacturer: Unisplendour Corporation Limited(000938) (Xinhua III), Zte Corporation(000063) , Fujian Star-Net Communication Co.Ltd(002396) ; Telecom operators: China Mobile, China Telecom Corporation Limited(601728) , China United Network Communications Limited(600050) ; IDC HVAC equipment: Shenzhen Envicool Technology Co.Ltd(002837) , Nanjing Canatal Data-Centre Environmental Tech Co.Ltd(603912) , Yimikang Tech.Group.Co.Ltd(300249) , etc; Military communications and satellite applications: Jushri Technologies Inc(300762) , Tianjin 712 Communication & Broadcasting Co.Ltd(603712) , Shanghai Huace Navigation Technology Ltd(300627) , Chengdu Corpro Technology Co.Ltd(300101) , Guangzhou Haige Communications Group Incorporated Company(002465) , China Satellite Communications Co.Ltd(601698) , etc.
Risk tips: 5g investment is less than expected, market competition intensifies, overseas trade disputes, market systemic risks, etc
