Under the digital economy, the growth rate of computing power is accelerated, and the layout of computing from the east to the West will further enhance the industry demand. The 14th five year plan for the development of digital economy was issued, and the development of digital economy has risen to the national strategic level. The plan clearly proposes that by 2025, the added value of core industries of digital economy will account for 10% of GDP. As an important part of the digital economy strategy, the East digital West computing project will further strengthen relevant implementation. We believe that the server, as the underlying computing support, will usher in a demand explosion under the policy guarantee.
The competition pattern of the industry is stabilizing, and the concentration is expected to be further improved in the future. (1) In the chip market, x86 is still the mainstream architecture, and Intel and AMD occupy the main market share; The penetration rate of domestic chips is still at a low level. With the gradual development of the industry’s information innovation, there is a broad space for domestic replacement. (2) In the server market, with the White Brand branding and the White Brand branding, the boundary between the white brand and the brand is gradually blurred, but the former has natural deficiencies compared with the latter, and the impact of the former on the latter will continue to weaken. At present, the competition pattern of the server industry is stabilizing, and China’s server market share continues to concentrate on China’s top enterprises. We believe that under the background of cloud computing, China’s professional server manufacturers have made rapid technological innovation, and the concentration is expected to be further improved in the future.
The upstream and downstream data are improving, and the industry will usher in a turning point in the cycle. (1) Optimization of upstream forward-looking indicators. From the perspective of upstream key components, the monthly revenue index of Xinhua technology can be used as a priori index of the prosperity of servers and cloud computing. Generally, it is about 2-3 months ahead of the industry. The revenue growth of Xinhua technology has accelerated since 2021q3, and the revenue increased by 61.46% year-on-year in January 2022; In the field of CPU, the business income of leading manufacturers Intel and AMD chips recovered and maintained stable growth; The inventory turnover rate of major foundary / IDM manufacturers in the world accelerated significantly in 2021. (2) Downstream demand is full. Capex, an Internet cloud giant outside China, maintained a high growth rate. Alibaba and Baidu 2021q4 capital expenditure increased by 90.94% and 94.54% year-on-year respectively. Tencent 2021q4 capital expenditure returned to positive after negative growth for two consecutive quarters, with a year-on-year growth rate of 20.73%. We believe that with the reversal of the bottom of the upstream supply side and the expected optimization of downstream capital expenditure, the cloud infrastructure represented by servers will usher in a cycle inflection point in 2022.
Key targets: Unisplendour Corporation Limited(000938) ( Unisplendour Corporation Limited(000938) . SZ), Inspur Electronic Information Industry Co.Ltd(000977) ( Inspur Electronic Information Industry Co.Ltd(000977) . SZ), Dawning Information Industry Co.Ltd(603019) ( Dawning Information Industry Co.Ltd(603019) . SH)
Risk tip: server shipment is less than expected; Changes in the external environment lead to lower downstream demand than expected; Policy uncertainty
