The policy of "raising speed and reducing fees" converged, and the prosperity of the operator sector rose. The policy of "raising speed and reducing fees" of operators was put forward by the State Council for the first time in April 2015 and was not highlighted for the first time in the report of the two sessions in March 2022. In the past seven years, telecom operators have been the specific executors of the strategy of "raising speed and reducing fees". While releasing huge industrial dividends to the social economy, they have promoted the upgrading of the traditional communication industry; The digital transformation of operators continues to make breakthroughs, and it is not easy to maintain the steady growth of operating income. With the convergence of the policy of "raising speed and reducing fees" and the proposal of promoting 5g large-scale application policy, operators are expected to catch up with the era of Trust Alliance Information Development Inc.Ltd.Shanghai(300469) reform of China's digital economy, continuously optimize the degree of marketization, usher in the recovery of industry prosperity, and their business performance is expected to rise to a higher level.
5g's "investment period" has achieved remarkable results, capital expenditure has stabilized, and structural optimization has contributed to high-quality development. With the construction of 5g infrastructure network for three years, 5g infrastructure has entered the middle and late stage, the effect of 5g "investment period" is remarkable, and the number of 5g users and penetration rate continue to increase. According to the data of the Ministry of industry and information technology, the number of 5g users continued to rise in 2021. In February 2022, the number of 5g package customers of China Mobile maintained a rapid growth, reaching 425 million, China Telecom Corporation Limited(601728) 202 million and China United Network Communications Limited(600050) 165 million. With the continuous penetration of 5g users, 5g is about to enter the full harvest period. At the same time, the stabilization of capital expenditure and optimization of allocation, on the one hand, will effectively reduce the pressure on the cost side, on the other hand, will further help the operator 2B business development and bring new performance increment, Boost the high-quality development of the company's business performance (the overall capital expenditure of operators increased slightly in 2022, including the stabilization of 5g related capital expenditure, and the investment focus shifted to promoting the construction of computing network, broadband Internet and industrial digitization, as well as the capacity layout of data center and broadband Gigabit Network).
The APRU of 5g "harvest period" is improved, and the 2B / 2C end makes concerted efforts, and the operating performance is expected to exceed expectations again. Driven by the increase of 5g package user penetration, the mobile ARPU value of the three major operators increased steadily. China Mobile's mobile billing ARPU was the highest in 2021, at 48.8 yuan, a year-on-year increase of 3.0% China Telecom Corporation Limited(601728) and China United Network Communications Limited(600050) mobile billing user ARPU have increased, of which 5garpu has made a greater contribution. According to the data of the Ministry of industry and information technology, from January to February 2022, the mobile Internet access traffic reached 37.3 billion GB, a year-on-year increase of 20.7%, and the monthly average household access traffic (Dou) of mobile Internet reached 12.22gb/household · month, a year-on-year increase of 12.7%. At present, 80% of China's 5g traffic is concentrated in the TOC end and 20% is distributed in the tob end. In the future, the operator's TOC end will develop stably on the basis of the improvement of 5g user penetration and the gradual popularization of 5g + applications. The tob end business innovation is expected to become a high driver of the operator's business growth. The traditional government enterprise interconnection business will be transformed into cloud services, IDC, dict and other businesses to help the digital transformation and upgrading. There is a large space for vertical industries in the government enterprise market. The transformation and upgrading structure of operators is optimized, and the 2B / 2C terminal develops synchronously and rapidly. With the accelerated integration of 5g large-scale applications, operators are expected to further increase their revenue and profits, and their operating performance is expected to exceed expectations.
The return to high growth brings the repair of the valuation bottom. We are optimistic about the operator sector and recommend China Mobile. The profitability and cash flow assets of operators have been continuously improved, and dividends have been continuously increased to give back to shareholders. Compared with historical valuation and foreign level, communication operators are at a low valuation. The double-digit growth of the operator's performance may exceed expectations, and the high dividend strategy is expected to drive the valuation repair of the operator sector. Pay attention to the operator sector and recommend the operator leader China Mobile (600941).
The risk indicates that the tob end business transformation of the operator is not as expected, and the innovative business model has not been formed; Factors such as intensified competition lead to the future ARPU trend of operators less than expected; 5g large-scale commercial promotion was less than expected.
