I. China Telecom Corporation Limited(601728) : capital expenditure of 93 billion in 2022, focusing on industrial digitization China Telecom Corporation Limited(601728) released the results of 2021, China Telecom Corporation Limited(601728) adhered to the steady and accurate investment strategy, continued to optimize the investment structure, focused on emerging fields such as 5g and industrial digitization, and built a new information infrastructure for cloud network integration. The total capital expenditure of the whole year was 86.7 billion yuan, including 38 billion yuan for 5g and 17.3 billion yuan for industrial digitization.
Ke Ruiwen, chairman of China Telecom Corporation Limited(601728) said at the performance presentation meeting that China Telecom Corporation Limited(601728) will make precise investment and focus on new growth points in 2022. It is mainly to strengthen the investment in industrial digitization, which is expected to increase by 62% year-on-year. IDC is expected to invest 6.5 billion yuan, target to add 45000 racks, invest 14 billion yuan in computing power (cloud resources), and plan to add 160000 cloud servers China Telecom Corporation Limited(601728) estimated capital expenditure is 93 billion yuan, of which 5g network investment accounts for 36.6%, 4G network investment accounts for 1.1%, broadband Internet investment accounts for 17.2%, industrial digitization investment accounts for 30.0%, operation system and business platform investment accounts for 5.4%, and infrastructure and other investment accounts for 9.7%. We believe that from the perspective of capital expenditure structure, the proportion of 5g declined, the proportion of broadband investment remained stable, and digital investment increased by nearly 10 percentage points. It is mainly invested in IDC and servers, which is good for the investment of high-end switches and routers. It is recommended to pay attention to Zte Corporation(000063) , Unisplendour Corporation Limited(000938) , as well as IDC refrigeration related companies. It is recommended to pay attention to: Shenzhen Envicool Technology Co.Ltd(002837) , Nanjing Canatal Data-Centre Environmental Tech Co.Ltd(603912) , Yimikang Tech.Group.Co.Ltd(300249) . In 2022, the capital expenditure of China Telecom Corporation Limited(601728) in 5g network will decrease by 10.5% year on year. It is estimated that in the next 1-2 years, 5g construction will be mainly used to improve network coverage and capacity expansion. Compared with recent years, 5g investment scale has decreased steadily. In the future, we will strive to improve investment efficiency, continuously reduce the proportion of capital expenditure in revenue, and emphasize that the growth rate of capital expenditure is lower than that of revenue and profit. Total capital expenditure still increased by 7%, which was good for the communication industry, and the proportion of long-term capital expenditure decreased, which was good for operators. Suggestions: China Mobile, China Telecom Corporation Limited(601728) .
II. MIIT: vigorously promote the construction and application of 5g, industrial Internet and other new infrastructure.
Xiao Yaqing, Secretary of the Party group and Minister of the Ministry of industry and information technology, presided over a special meeting to analyze and judge the current industrial economic operation situation, study and deploy the work of promoting sustained and stable growth. The meeting requested that we should closely track the impact of the international situation and epidemic trend on the industrial economy, strengthen cross regional and cross sectoral coordination, and effectively ensure the stable operation of key industrial chains. Focusing on expanding effective investment in manufacturing, the Ministry of industry and information technology will accelerate the implementation of major projects in the 14th five year plan, vigorously promote the construction and application of 5g, industrial Internet and other new infrastructure, start a number of manufacturing innovation centers, industrial infrastructure reconstruction, digital and green transformation projects, and cultivate and develop advanced manufacturing clusters. We believe that 5g is not only the cornerstone of promoting the rapid development of digital economy, but also an important investment direction to achieve steady growth. With the basic completion of 5g wide area coverage, 5g downstream will be an important direction of innovation and investment in the future, which will fully benefit industries such as industrial Internet, Internet of things and VR / ar.
III. in 2021, the global telecom equipment market revenue was US $100 billion, and Huawei remained in the lead.
Dell’orogroup has just released the global overall telecom equipment market report for the fourth quarter of 2021. In 2021, the overall global telecommunications equipment market increased by 7% for the fourth consecutive year, mainly due to the soaring wireless revenue and the healthy demand for wired related equipment stimulated by the double-digit percentage growth of ran and broadband access segments. The total revenue of the global telecommunications equipment market was close to US $100 billion in 2021, an increase of more than 20% since 2017.
From 2020 to 2021, the overall global share of leading suppliers remained relatively stable, and the top 7 suppliers accounted for about 80% of the whole market. The market competition environment outside China is more balanced. Ericsson and Nokia’s share is basically the same (20%), while Huawei accounts for about 18%. The growth of the global telecommunications equipment market in 2022 is expected to slow to 4% from 7% in 2021. Wireless capital spending in the United States is expected to surge this year. We believe that affected by the US sanctions, Huawei’s market share has declined slightly, but it still occupies the largest market share in the world. However, the demand for telecommunication equipment continues to grow in the long term. It is recommended to pay attention to the world’s leading communication equipment manufacturers: Zte Corporation(000063) , Unisplendour Corporation Limited(000938) .
Industry highlights
\u3000\u30001. FCC revokes the authorization of two CITIC Group companies to provide telecommunications services in the United States. The Federal Communications Commission (FCC) voted on Wednesday to revoke the authorization of China Telecom Corporation Limited(601728) enterprise Pacific networks and its wholly-owned subsidiary ComNet to provide telecommunications services in the United States.
In January last year, the FCC voted to revoke the similar authorization of China United Network Communications Limited(600050) U.S. subsidiary to operate services in the United States on the grounds of national security. Last October, the FCC revoked the authorization of China Telecom Corporation Limited(601728) (America) company to provide telecommunications services in the United States. In 2019, the FCC announced that it would stop Authorizing China Mobile to provide telecommunications services in the United States on the grounds of national security risks.
\u3000\u30002. The downlink speed of SpaceX satellite chain exceeded 100Mbps, faster than 5g in the United States
In the fourth quarter of 2021, the average data downlink rate of SpaceX’s low earth orbit (LEO) satellite broadband service Starlink in the United States increased to 104.97mbps from 87.25mbps in the third quarter. Among the top three satellite providers in the United States, the satellite link easily exceeds the median of viasat’s 21.81 Mbps and the highest network speed of HughesNet’s 20.92 Mbps. Okla also added SES to its list in the fourth quarter, but it lagged behind other players at a rate of 2.19 Mbps.
In contrast, in terms of competition with mobile operators, star chain has a slight advantage – according to a report by ookla at the end of 2021, the average downlink rate of 5g in the United States is 93.73 Mbps.
Although the downlink rate of Starlink increased in the fourth quarter, the uplink rate decreased to 12.02mbps from 13.54mbps in the third quarter. SES, Weixun and HughesNet all use higher geosynchronous orbit (GEO) satellites, and the median delay of these satellites is higher than that of low earth orbit satellites in the satellite chain. The median delay of 40ms of star chain is much better than 613ms of SES, 627ms of Weixun and 725ms of Hughes network.
Recommended this week: 5g construction leader [ Zte Corporation(000063) ]; [ Unigroup Guoxin Microelectronics Co.Ltd(002049) ] with the acceleration of domestic substitution and the warming of super SIM card sales; Benefiting from the rapid growth of intelligent controller industry [ Shenzhen H&T Intelligent Control Co.Ltd(002402) ]; [ Meig Smart Technology Co.Ltd(002881) ] of rapid and large-scale Internet of things module; Beidou industry solution leader [ Shanghai Huace Navigation Technology Ltd(300627) ]; [ Zhongji Innolight Co.Ltd(300308) ] benefiting from the increasing demand for optical modules.
Long term recommendation: 5g main equipment and infrastructure: Zte Corporation(000063) ; Optical communication: Suzhou Tfc Optical Communication Co.Ltd(300394) , Zhongji Innolight Co.Ltd(300308) , Eoptolink Technology Inc.Ltd(300502) , Accelink Technologies Co.Ltd(002281) , Broadex Technologies Co.Ltd(300548) Advanced Fiber Resources (Zhuhai) Ltd(300620) ； Optowide Technologies Co.Ltd(688195) , torch technology; Radio frequency: Guangdong Shenglu Telecommunication Tech.Co.Ltd(002446) ; Benefit flow explosion: Fujian Star-Net Communication Co.Ltd(002396) , New Guomai Digital Culture Co.Ltd(600640) , Wangsu Science & Technology Co.Ltd(300017) ; Internet of things segment: Quectel Wireless Solutions Co.Ltd(603236) , Fibocom Wireless Inc(300638) , Meig Smart Technology Co.Ltd(002881) , Hanwei Electronics Group Corporation(300007) , Queclink Wireless Solutions Co.Ltd(300590) . IDC direction: Beijing Sinnet Technology Co.Ltd(300383) , Shanghai Athub Co.Ltd(603881) , Shanghai Baosight Software Co.Ltd(600845) , Guangdong Aofei Data Technology Co.Ltd(300738) ; ; Industrial Internet: Business-Intelligence Of Oriental Nations Corporation Ltd(300166) ; Intelligent controller: Shenzhen H&T Intelligent Control Co.Ltd(002402) , Shenzhen Topband Co.Ltd(002139) . Energy storage is related to new energy: Jiangsu Zhongtian Technology Co.Ltd(600522) , Hengtong Optic-Electric Co.Ltd(600487) , Kehua Data Co.Ltd(002335) , Longshine Technology Group Co.Ltd(300682) .
Risk tips
(1) systemic risk caused by the unexpected decline of the market;
(2) focus on the uncertainty risk of promoting relevant matters of the company.
