Core view
Industry highlights tracking: the three major operators released the first quarterly report and continued the good growth trend. The growth of 5g users of the three major operators on the 22q1 revenue side drives the steady growth of mobile services. Gigabit broadband and smart home help the sustained growth of broadband services, and the growth momentum of innovative services is strong. On the cost side, although operators continue to increase investment in innovative business and R & D expenses increase rapidly, it also accumulates strength for the long-term development of innovative business; The operation support cost increases with the expansion of network scale, but operators attach importance to the research of new technologies such as energy conservation and low carbon, and the operation support cost is expected to be reasonably controlled. Moreover, operators have turned to precision investment, and the investment focus has shifted from 5g network to digital transformation. The total asset scale is expected to gradually become “light”. Based on this, we are optimistic about the continuous recovery of roe and Pb repair of the three major operators. From the perspective of business scale, China Mobile is relatively ahead, from the perspective of cloud resources, China Telecom Corporation Limited(601728) has obvious advantages, and from the perspective of profit elasticity, China United Network Communications Limited(600050) has a large space. Key recommendations: [China Mobile], [ China Telecom Corporation Limited(601728) ], [ China United Network Communications Limited(600050) ].
Key industry data tracking: 1) operator data: according to the data of the Ministry of industry and information technology, the total number of mobile phone users in China reached 1.66 billion in March 2022, including 403 million 5g mobile phone users, a net increase of 29.05 million over the end of the previous year and a penetration rate of 24.3%; 2) 5g base stations: as of March 2022, the total number of 5g base stations has reached 1.559 million; 3) Cloud computing and chip manufacturers: 21q4, bat capital expenditure totaled 25.2 billion yuan (year-on-year + 51%, month on month + 12%); In 21q4, the capital expenditure of the three major overseas cloud manufacturers and meta totaled US $36.553 billion (year-on-year + 26%, month on month + 11.8%). Xinhua’s revenue in March 2022 was NT $433 million (year-on-year + 66.3%, month on month + 29.6%); Intel DCG 21q4 revenue + 20% year-on-year to US $7.3 billion; Amd computing and graphics 21q4 achieved a revenue of US $2.6 billion (year-on-year +32%, month on month +8%).
Market review: this week, the communication (Shenwan) index fell 4.29%, and the Shanghai and Shenzhen 300 index fell 3.68%. The performance of the sector was weaker than the market, with a relative return of – 0.61%, ranking 12th in the Shenwan industry. There are 147 companies in our communications stock pool, with an average rise or fall of – 4.88% this week.
Investment suggestion: in April, focus on the direction of operators and industrial digitization. The fundamentals of operators continue to recover and improve, with valuation repair opportunities, focusing on China Mobile. In the direction of industrial digitization, we should focus on the track with high flexibility: first, the direction of policy overweight, with more catalysts, such as the Internet of things, Beidou and industrial Internet. Specifically, there are Internet of things modules (focusing on Quectel Wireless Solutions Co.Ltd(603236) , Fibocom Wireless Inc(300638) ), IOT chip ( Rockchip Electronics Co.Ltd(603893) ), industrial Internet gateway ( Beijing Inhand Networks Technology Co.Ltd(688080) , 3Onedata Co.Ltd(688618) ), Beidou application terminal ( Shanghai Huace Navigation Technology Ltd(300627) ). Second, the track combined with new energy and intelligent vehicles has high certainty and high valuation flexibility. Focus on “communication + energy” ( Jiangsu Zhongtian Technology Co.Ltd(600522) , Guangdong Shenling Environmental Systems Co.Ltd(301018) , Shenzhen Kstar Science & Technology Co.Ltd(002518) ) and “communication + automobile” ( Suzhou Recodeal Interconnect System Co.Ltd(688800) ). The key recommended combinations in April 2022 are Quectel Wireless Solutions Co.Ltd(603236) , Yealink Network Technology Co.Ltd(300628) , Jiangsu Zhongtian Technology Co.Ltd(600522) , Guangdong Shenling Environmental Systems Co.Ltd(301018) , China Mobile and Suzhou Recodeal Interconnect System Co.Ltd(688800) .
Risk tip: the global epidemic intensifies the risk, 5g investment and construction is less than expected, Sino US trade friction and other external environmental changes.
