Key points of the report:
The valuation of the communication sector is expected to recover from the bottom and maintain the "recommended" rating of the communication industry
Weekly market: this week (from January 4, 2022 to January 7, 2022), the Shanghai Composite Index fell 1.65%, the Shenzhen Component Index fell 3.46% and the gem index fell 6.80%. In this week's primary industry index, the communication sector fell by 2.19%, with a medium performance; Among the stocks in the communication sector, the number of rising / falling stocks was 20 / 88, accounting for 18.35% / 80.73% respectively. Among them, Guangdong Tecsun Science & Technology Co.Ltd(002908) (+ 19.78%), Chutian Dragon Co.Ltd(003040) (+ 16.76%) and Shenzhen Sed Industry Co.Ltd(000032) (+ 9.16%) were the top three according to the analysis of individual stocks.
In terms of sub sections: according to our data on the division of Companies in the communication industry, the relevant targets of operators (H shares) and equipment integration sectors performed well this week, with an increase of 5.36% and 0.36% respectively.
China Mobile's return to a is conducive to the stabilization of capital expenditure in the medium and long term, and the infrastructure is expected to exceed expectations
At present, the three major operators have completed the "a + H" layout. We believe that the operator plate, including the previous China Telecom Corporation Limited(601728) and the latest return of China Mobile to a shares, will better ensure the stabilization of a large amount of capital expenditure investment in the early stage in the medium and long term, effectively promote the stabilization of the overall business cycle of the communication industry, and the continuation and application prospects of 5g construction are broad. With the continuous progress of base station construction of China's three major operators, 5g applications continue to accumulate, innovate and make breakthroughs, 5g traffic continues to grow rapidly, the progress remains unchanged, and 5g related infrastructure is expected to exceed expectations.
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. It is recommended to pay attention to the subject matter:
The subject matter of meta cosmic infrastructure Zte Corporation(000063) (000063), optical module Zhongji Innolight Co.Ltd(300308) (300308), Suzhou Tfc Optical Communication Co.Ltd(300394) (300394);
Vehicle / IOT / energy IOT related: Queclink Wireless Solutions Co.Ltd(300590) (300590), Shenzhen H&T Intelligent Control Co.Ltd(002402) (002402), Willfar Information Technology Co.Ltd(688100) (688100), video conference Yealink Network Technology Co.Ltd(300628) (300628), Bizconf Telecom Co.Ltd(300578) (300578), leader superposition of disaster monitoring section, automatic driving breakthrough China Survey navigation (300627), 5g message Montnets Cloud Technology Group Co.Ltd(002123) (002123);
And Runjian Co.Ltd(002929) (002929) and Jiangsu Zhongtian Technology Co.Ltd(600522) (600522) with continuous breakthroughs in new energy business.
Risk tips
Risk of rising raw material prices; Global epidemic impact and uncertainty of foreign policy environment; 5g commercial promotion was less than expected.
