Core view (April 11, 2022 - April 17, 2022):
The thematic catalytic communication segment is expected to rebound from the bottom and maintain the recommended rating of the communication industry
Weekly market: this week, the Shanghai Composite Index fell 1.25%, the Shenzhen Component Index fell 2.60%, and the gem index fell 4.26%. In this week's primary industry index, the communication sector fell by 5.67%; Among the individual stocks in the communication sector, the proportion of rising, maintaining and falling stocks was 7.03%, 0.78% and 92.19% respectively. Among them, in terms of the increase of individual stocks, Beijing E-Techstar Co.Ltd(300513) (+ 6.50%), Sichuan Tianyi Comheart Telecom Co.Ltd(300504) (+ 5.46%) and Shenzhen Gongjin Electronics Co.Ltd(603118) (+ 3.93%) were among the top three. In terms of sub sectors: according to the data of sub sectors divided by companies in the communication industry, the decline of relevant targets in the equipment integration sector and the operator sector this week was small, with the decline of - 1.40% and - 2.61% respectively. Combined with the continuous extension of capital expenditure of communication operators to it services in 2022, the "5g new call" of China Mobile broke out this week, the continuous breakthrough of 5g applications and the continuous development of digital traffic economy, we maintain the "recommended" rating of the communication industry.
The centralized equipment purchase of operators has been steadily promoted, and the capital expenditure has stabilized, extending from CT side to it side
China Mobile announced the successful candidates for centralized procurement: from 2022 to 2023, g.654e optical fiber and cable products were purchased intensively, and Changfei, Hengtong and Fenghuo won the bid; In 2022, the base station antenna was purchased intensively, and many manufacturers such as Jingxin communication, CITIC mobile and Huawei won the bid; From 2022 to 2023, 444 antennas and single 4 antennas (including 700m) were purchased intensively, and eight manufacturers including Hengxin technology and Jingxin communication won the bid China United Network Communications Limited(600050) announced the list of candidates for winning the bid for the procurement project (traffic tracing and evidence collection equipment) to improve the normalization capacity of Beijing cloud network delivery center in 2021, and three enterprises Venustech Group Inc(002439) , Topsec Technologies Group Inc(002212) and HengAn Jiaxin were shortlisted; In 2020, the bidding results of the new iteration project of the application software of the ECS system innovation business management platform of the headquarters were officially announced, and HengAn Jiaxin and Huashun Xin'an were shortlisted China Telecom Corporation Limited(601728) start the centralized purchase of customized WDM equipment and the 5g core network expansion project of Shanxi company; In 2021, the list of successful candidates for the upgrading project of voice International Bureau was announced, and Huawei and ZTE were shortlisted. The intensive centralized purchase of relevant equipment by operators shows that, on the one hand, the stability of operators' business development is expected to drive the stabilization of the whole communication industry chain. On the other hand, the continuous extension of investment focus CT to it shows that the comprehensive development process of operators' ICT business is expected to exceed expectations.
Investment suggestion: 5g application is the key direction of communication exceeding expectations in the future, and the industry prosperity of ICT integration on the equipment side is expected to improve
We believe that the focus of investment in the communication industry is shifting from equipment to application, and the equipment manufacturers that prefer it services of operators are expected to usher in the increase of capital expenditure. Proposals to focus on targets: light modules are suggested to focus on targets: light modules: light modules: 3 Zuming Bean Products Co.Ltd(003030) 3030303030 236), Fibocom Wireless Inc(300638) ( Fibocom Wireless Inc(300638) ), video conference Yealink Network Technology Co.Ltd(300628) ( Yealink Network Technology Co.Ltd(300628) ), navigation application target Shanghai Huace Navigation Technology Ltd(300627) ( Shanghai Huace Navigation Technology Ltd(300627) ), 5g message Montnets Cloud Technology Group Co.Ltd(002123) ( Montnets Cloud Technology Group Co.Ltd(002123) ). At the same time, as a long-term configuration direction, the communication operator sector also needs to pay special attention, and China Mobile (600941) is recommended.
Risk warning: risk of rising raw material price; Global epidemic impact and uncertainty of foreign policy environment; 5g commercial promotion is less than expected
