This week, there was a correction in the communication sector, and the sub sectors of equipment integration and operators performed well
Weekly market: this week, the Shanghai Composite Index fell 3.87%, the Shenzhen composite index fell 5.12%, and the gem index fell 6.66%. In the one week industry index, the communication sector fell by 2.28%; Among the individual stocks in the communication sector, the proportion of rising, maintaining and falling stocks was 11.72%, 0.78% and 87.5% respectively. In terms of the rise of individual stocks, Bybon Group Company Limited(300736) (+ 7.75%), Beijing E-Techstar Co.Ltd(300513) (+ 5.57%) and Skyworth Digital Co.Ltd(000810) (+ 5.53%) were among the top three. In terms of sub sectors: according to our data on the division of sub sectors by companies in the communication industry, the relevant targets of the equipment integration sector and the operator sector performed well this week, with the increase of 1.60% and 0.06% respectively.
We believe that with the continuous promotion of 5g base station construction of China’s three major operators, 5g is about to enter a comprehensive harvest period. The capital expenditure of operators has stabilized and expanded to the it side, the downstream applications have been accumulated and innovated, the rapid growth of 5g traffic is expected to accelerate, the economic development of digital traffic is expected to exceed expectations, and the “recommended” rating of the communication industry is maintained.
The industry’s economic operation has improved, the industrial chain has been stabilized, the business performance has increased, and the growth has been highlighted
Recently, the three major operators released the Q1 performance report in 2022. The three operators have high performance and strong growth momentum. China Mobile’s revenue grew faster than expected, China United Network Communications Limited(600050) net profit achieved double-digit growth, the fastest growth among the three, China Telecom Corporation Limited(601728) revenue and profit achieved double-digit growth. As of 2022q1, the total number of 5g package users of the three major operators has exceeded 800 million, and the number of 5g users of China Mobile ranks first. According to the latest data of the Ministry of industry and information technology, as of 2022q1, the telecom business revenue had reached 393.5 billion yuan, a year-on-year increase of 9.3%, 1340005g base stations had been built, and the number of 5g mobile phone users had increased by 48.11 million. The mobile data traffic business revenue of the three major operators was 160.9 billion yuan, accounting for 14.9% of the telecom business revenue. Among the three emerging telecom enterprises, the revenue was 79.3 billion yuan, accounting for a year-on-year increase of 2.3%. Huawei announced that it will rename its consumer business as terminal business, bring customized and scenario based solutions to the government and industry, and lead the future office into the era of full scene intelligent experience Zte Corporation(000063) 2021 annual general meeting of shareholders and performance presentation meeting indicated that two business curves will be promoted: the first curve (traditional wireless and wired products) will make steady progress, and the second curve (servers and storage, terminals (including smart home terminals), 5g industry applications, automotive electronics, digital energy, etc.) will accelerate innovation. Generally speaking, the development of the communication industry is stable, upward or better than expected.
Investment suggestion: optimize the high-quality target of the marginal improvement direction of the prosperity of the sub industry
The marginal improvement of prosperity of the sub industry of communication is conducive to the stabilization and recovery of valuation, and the high growth of performance is more deterministic in the medium and long term. It is suggested to pay attention to the subject matter: the related subject matter of East digital West computing Fujian Star-Net Communication Co.Ltd(002396) ( Fujian Star-Net Communication Co.Ltd(002396) ), Suzhou Tfc Optical Communication Co.Ltd(300394) ( Suzhou Tfc Optical Communication Co.Ltd(300394) ), Shenzhen Envicool Technology Co.Ltd(002837) ( Shenzhen Envicool Technology Co.Ltd(002837) ), optical module Zhongji Innolight Co.Ltd(300308) ( Zhongji Innolight Co.Ltd(300308) ), the subject matter of video conference of application section Yealink Network Technology Co.Ltd(300628) ( Yealink Network Technology Co.Ltd(300628) ), the subject matter of satellite navigation application Shanghai Huace Navigation Technology Ltd(300627) ( Shanghai Huace Navigation Technology Ltd(300627) ). Communication + breakthrough in new business development Jiangsu Zhongtian Technology Co.Ltd(600522) ( Jiangsu Zhongtian Technology Co.Ltd(600522) ), Hengtong Optic-Electric Co.Ltd(600487) ( Hengtong Optic-Electric Co.Ltd(600487) ). At the same time, as a long-term configuration direction, the communication operator sector also needs to pay special attention, and China Mobile (600941 + 0941) is recommended.
Risk warning: risk of rising raw material price; Global epidemic impact and uncertainty of foreign policy environment; The large-scale promotion of 5g was less than expected.
