Core view
The growth rate of revenue & net profit of the three operators reached a new high in 2021. 1) In terms of operating revenue, the growth rate of mobile revenue reached a ten-year high, and the revenue of Telecom achieved double-digit growth, followed by China Unicom. The revenue of mobile, telecom and China Unicom were 848.3 billion yuan / 434.2 billion yuan / 327.9 billion yuan respectively, with a year-on-year increase of 10.4% / 11.3% / 7.9% respectively. 2) In terms of net profit attributable to the parent company, China Telecom and China Unicom increased rapidly and maintained a positive momentum. China Mobile maintained growth in the current large volume. The net profit attributable to the parent company of China Mobile, China Telecom and China Unicom were 115.9 billion yuan / 26 billion yuan / 6.3 billion yuan respectively, with a year-on-year increase of 7.5% / 24.4% / 14.2% respectively.
Industrial digital services have become the main force of growth, and mobile and fixed network services have achieved incremental income growth. 1) In terms of industrial digital business, the three operators vigorously promoted the integrated development of “network + cloud + dict”, actively enabled the transformation and upgrading of traditional industries, and the industrial digital business grew rapidly, becoming the first revenue increasing engine; The project of “counting from the east to the west” was officially launched. The three operators prospectively laid out the computing network, focusing on the deployment of data centers around the eight national computing hub nodes, which is highly consistent with the layout of the national integrated big data center. 2) In terms of mobile business, 5g continues to drive the growth of mobile revenue and the recovery of mobile ARPU. At the same time, 5g users accelerate the penetration, and there is a certain room for improvement in mobile business revenue and value; 5g co construction and sharing has achieved remarkable results. 3) In terms of fixed network and smart home business, the upgrading of Gigabit broadband network and smart home business provide a strong driving force for the development of fixed network business, forming a situation of double growth of quantity and quality; The application value of smart home is further highlighted, and its contribution to broadband comprehensive ARPU continues to increase.
Capital expenditure is expected to be basically stable in 2022, with the increase of computing power network investment and the decrease of 5g investment. Facing the new development opportunities brought by the digital economy and “digital computing in the East and digital computing in the west”, operators have increased their investment in industrial digitization, and mobile has spared no effort to build a new information service system based on 5g + computing network + smart middle station, changing to the service mode of “connection + computing power + capability”; Telecom fully implemented the strategy of “changing cloud to digital transformation”, accelerated cloud network integration, and focused on new growth points such as IDC and computing power, so as to strengthen the leading edge of intelligent network; China Unicom strives to build an integrated computing network service of “connection + perception + computing + intelligence”. In terms of 5g investment, 5g investment shows a decreasing trend, and 5g construction is advancing steadily.
The dividend payout ratio is increased and the dividend yield is high. Operators attach great importance to shareholders’ equity and accelerate shareholders’ return by paying interim dividends and raising the dividend rate. In 2021, China Mobile and China Telecom Corporation Limited(601728) dividend payout ratio will be increased to 60%, and it is planned to increase to more than 70% within three years The China United Network Communications Limited(600050) dividend payout rate also increased to 46%, an increase of 6 percentage points compared with last year.
Investment proposal and investment object
Facing the new blue ocean market of digital economy, operators have prospectively laid out their computing network: in terms of IDC, the market share of the three operators ranks among the top three; In terms of cloud, the cloud infrastructure has been continuously improved, and the compound growth rate of cloud business has been very high in recent years. At present, the volume of revenue has begun to take shape. Considering the good performance of operators and new development opportunities, it is suggested to pay attention to China Mobile (600941, not rated), China Telecom Corporation Limited(601728) ( China Telecom Corporation Limited(601728) , not rated), China United Network Communications Limited(600050) ( China United Network Communications Limited(600050) , not rated).
Risk tips
The project of “counting from the east to the west” was not advanced as expected, the industrial digital business and cloud business were not as expected, the 5g construction was not as expected, the promotion of 5g users was not as expected, and the impact of epidemic factors
