I. capex expenditure of the three major operators collectively “turns”. 5g investment continued to decline steadily.
China Telecom Corporation Limited(601728) it is estimated that the capital expenditure in 2022 will be 93 billion yuan (a year-on-year increase of 7%), of which 5g network investment accounts for 36.6%, reaching 34 billion yuan, a year-on-year decrease of 10.5%. 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. At the same time, we will strive to improve investment efficiency in the future, and the proportion of capital expenditure in income will continue to decrease. China Mobile expects capital expenditure of 185.2 billion yuan in 2022, of which 5g related capital expenditure is about 110 billion yuan, a year-on-year decrease of 3.5%. 2022 is the last year of 5g investment peak of the company. From 2023, if there are no other major events, the capital expenditure will show a gradual downward trend. It is expected that after three years, the proportion of capital expenditure in revenue will be reduced to less than 20%. The goal set by the Ministry of industry and information technology is to strive to open more than 2 million 5g base stations in total and lay a good foundation. From the 5g base station construction goals announced by the three major operators, it is expected that more than 670000 new base stations will be built this year, and more than 2.09 million base stations will be opened in total, which can exceed the goal.
Focus on new growth points of digital economy. In 2022, China Telecom Corporation Limited(601728) will strengthen the investment in industrial digitization, which is expected to be 27.9 billion yuan, with a year-on-year increase of 62%, of which IDC is expected to invest 6.5 billion yuan, target to add 45000 racks, calculate 14 billion yuan, and plan to add 160000 cloud servers. The investment in cloud and IDC is also to better serve “counting from east to west”. For the next three years, China Telecom Corporation Limited(601728) strive to realize that the digital income of the industry accounts for more than 30% of the revenue.
China Mobile will invest 48 billion yuan in the computing power network carrying the business development related to its digital transformation, implement the national project deployment of “computing from the east to the west”, and put into operation about 450000 available IDC racks (43000 new ones are planned); Accelerate the layout of hot center cloud, build edge cloud as needed, and put into operation more than 660000 cloud servers (180000 new ones are planned). Yang Jie said that the construction of the computing power network will be fully carried out in 2022, and the relevant capital expenditure of the computing power network will gradually increase in the future.
1. We believe that from the perspective of capital expenditure structure, the proportion of 5g declined, the proportion of broadband investment remained stable, and the 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 Unisplendour Corporation Limited(000938) , as well as IDC refrigeration related companies. It is recommended to pay attention to: Shenzhen Envicool Technology Co.Ltd(002837) .
2. The proportion of capital expenditure in revenue continues to decrease, emphasizing 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. Suggestion: China Mobile.
II. The average annual price of Ethernet and WDM optical modules shows an upward trend. Lightcounting releases the latest market report. According to its recently completed supplier survey, in Q4 of 2021, the shipment volume of optical modules set a new record, with a single quarter sales of US $2 billion, an overall increase of 37%, of which the sales of Ethernet and WDM optical modules increased by about 40%. The average price of some important categories of products increased in 2021.
In the Ethernet and WDM segments, compared with 2020, the sales in 2021 increased by 28% and 27% respectively. The average price of Ethernet optical module products increased by 21%, and the average price of WDM optical module products increased by 37%. In the wireless and FTTx segments with more fierce competition and larger sales, the price decline in 2021 is actually greater than that in 2020. Similarly, the change of product structure also played a role. On the wireless side, 25g products are shipped less in 2021, while on the FTTx side, the proportion of ONU / ont and OLT of 10G PON is higher. In our opinion, due to the tight supply chain, the optical module has withstood the downward trend of price, while the shipment of optical module continues to increase, which is good for optical module enterprises. We suggest to pay attention to: Zhongji Innolight Co.Ltd(300308) , Eoptolink Technology Inc.Ltd(300502) , Suzhou Tfc Optical Communication Co.Ltd(300394) .
III. The financial statements of the three major operators in 2021 are released. In 2021, the revenue and profit of the three major operators ushered in positive growth. In terms of revenue, China Mobile and China Telecom Corporation Limited(601728) both had double-digit year-on-year growth of 10.4% and 11.3% respectively, and China United Network Communications Limited(600050) increased by 7.9%. In terms of net profit growth, China Telecom Corporation Limited(601728) performed well and achieved new results in high-quality development, with a growth rate of 24.4%. China Mobile’s operating revenue was 848258 billion yuan, a year-on-year increase of 10.4%; Among them, the revenue from communication services was 751.4 billion yuan, a year-on-year increase of 8.0%. The profit attributable to shareholders was RMB 116.1 billion, a year-on-year increase of 7.7% China Telecom Corporation Limited(601728) in 2021, the operating revenue was RMB 434159 billion, with a year-on-year increase of 11.3%, including service revenue of RMB 402.8 billion, with a year-on-year increase of 7.8%, including net profit attributable to parent company of RMB 25.952 billion, with a year-on-year increase of 24.4%. In 2021, the China United Network Communications Limited(600050) operating revenue reached 327854 billion yuan, a year-on-year increase of 7.9%; The service revenue reached 296.2 billion yuan, a year-on-year increase of 7.4%; The net profit was 14.4 billion yuan, a year-on-year increase of 15.0%.
We believe that with the growth of C-end mobile business revenue slows down. In order to gradually get rid of the situation of increasing revenue without increasing revenue, operators attach great importance to the b-end industry market, and the business layout gradually highlights its value. In the past year, the main performance growth of operators was mainly supported by the government enterprise market. Government enterprise business has been a key component of the operator’s “one-third of the world” strategy. Under the environment of the slowdown of the operator’s overall income growth, the business focus should be appropriately transferred to government enterprise business. At the same time, operators have announced capital expenditure plans one after another. It is expected that 5g related investment will decline in the future, and “counting East and west” related investment will rise. It is expected that the proportion of capital expenditure in total revenue will decline in the future, and the operating business performance will benefit from increasing revenue and reducing expenditure.
Industry highlights
\u3000\u30001. Miao Wei: China’s auto industry decided to win or lose in the second half of the smart netunion
At the China electric vehicle hundred people’s meeting, Miao Wei, deputy director of the Economic Committee of the CPPCC National Committee, said that if we compare new energy vehicles to the first half and intelligent Internet connected vehicles to the second half, China’s automobile industry has achieved great results in the first half, but the decision is still in the second half. Miao Wei believes that the Internet of vehicles should develop short-range broadband wireless communication technology as soon as possible to meet the needs of edge computing, roadside units and vehicle communication; In terms of vehicle road coordination, we should establish national standards for intelligent classification of roads as soon as possible, as well as intelligent standards for roadside units, traffic lights and road markings, so as to achieve unification in China.
\u3000\u30002. Zte Corporation(000063) five year compliance monitoring period ends
Zte Corporation(000063) announcement: on March 22, 2022 (US time), the company received the court’s judgment and ruled not to revoke the probation of Zte Corporation(000063) without any penalty (i.e. the probation will expire on March 22, 2022 (US time), and confirmed that the term of office of the inspector will end on March 22, 2022 (US time).
\u3000\u30003. FCC of the United States listed China Telecom Corporation Limited(601728) and relevant subsidiaries of China Mobile in the “security threat list”
On the ground of “national security”, the Federal Communications Commission (FCC) of the United States announced that China Telecom Corporation Limited(601728) America company, China Mobile International (USA) Co., Ltd. and Russia’s Kaspersky Lab will be included in the list of “communication equipment and services that pose a threat to the national security of the United States”. Huawei was listed in the list of and international of the United States last year, and Huawei was listed in August and
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) ; 5g message: Montnets Cloud Technology Group Co.Ltd(002123) , Zjbc Information Technology Co.Ltd(000889) , Wutong Holding Group Co.Ltd(300292) ; 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.
