The valuation of the communication sector is expected to stabilize and recover and maintain the recommended rating of the communication industry
Weekly market: this week, the Shanghai Composite Index fell 1.19%, the Shenzhen Component Index fell 2.08%, and the gem index fell 2.79%. In this week’s primary industry index, the communication sector fell by 1.48%; Among the individual stocks in the communication sector, the proportion of rising, maintaining and falling stocks was 23.62%, 0% and 76.38% respectively. Among them, in terms of the increase of individual stocks, Wuhan Fingu Electronic Technology Co.Ltd(002194) (+ 37.26%), Jilin Jlu Communication Design Institute Co.Ltd(300597) (+ 8.58%) and Skyworth Digital Co.Ltd(000810) (+ 8.52%) were the top three respectively.
In terms of sub sectors: according to our data on the division of sub sectors by companies in the communication industry, the relevant targets of the operator sector and the military communication / BeiDou Navigation sector performed well this week, with an increase of 1.37% and 0.99% respectively.
We believe that with the continuous promotion of the construction of 5g base stations by China’s three major operators, the continuous accumulation and innovation of 5g applications, the rapid growth of 5g traffic is expected to accelerate, and the economic development of digital traffic is expected to exceed expectations, maintaining the “recommended” rating of the communication industry.
The operator’s operating data grew strongly in February 2022, and the marginal operating performance of the operator’s annual report was better
On Wednesday, major operators released the operation data of February 2022, and the number of 5g users in the operation index increased strongly. China Mobile released its annual report for 2021. During the reporting period, the operating revenue was 848.3 billion yuan, with a year-on-year increase of 10.4%, and the marginal improvement of operating performance China Telecom Corporation Limited(601728) start the centralized purchase of – 48V combined switching power supply in 2022. Huawei cloud released the “cloud climbing plan” on March 25, 2022 to accelerate the innovation and development of Beijing specialized, special and new enterprises. Continuous breakthroughs have been made in the application of communication industry, Fiberhome Telecommunication Technologies Co.Ltd(600498) through the application of cloud classroom + cloud laboratory, help more network engineers supplement technical reserves and help the cultivation and development of digital talents. In the overseas incident, Malaysian operators supported the government’s decision to promote the plan of building a single 5g wholesale network by state-owned entities.
Investment suggestion: large space 5g application is the key direction of communication 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 cosmic infrastructure of the meta universe: the light module of the cosmic infrastructure of the cosmic universe: the light module of the cosmic infrastructure of the cosmic universe: the light module of the cosmic infrastructure of the cosmic universe: the 3 Zuming Bean Products Co.Ltd(003030) 30303030303030303030303030383 \ ( Yealink Network Technology Co.Ltd(300628) ), disaster monitoring faucet superimposed with automatic driving target Shanghai Huace Navigation Technology Ltd(300627) ( Shanghai Huace Navigation Technology Ltd(300627) ). At the same time, as a long-term configuration direction, the communication operator sector also needs to pay special attention.
Risk warning: risk of rising raw material price; Global epidemic impact and uncertainty of foreign policy environment; 5g commercial promotion was less than expected.
