Industry core view:
The last trading week was the 15th trading week of A-Shares in 2022. The CSI 300 index fell 4.19%, and one of the 31 industries in Shenwan class rose and 30 fell. The overall trend of the communication industry was stronger than the market last week, down 2.28%, ranking No. 5 and No. 1 in the TMT industry. According to the 2022q1 financial report of the three operators, the 2022q1 revenue and profit of the three operators increased steadily, the tariff decline narrowed, the Dou continued to grow, and the ARPU driven by 5g users continued to grow. In terms of revenue, the three major operators once realized an accumulated operating revenue of 434917 billion yuan in 2022. Among them, China Mobile ranks first, with an operating revenue of 227.32 billion yuan China Telecom Corporation Limited(601728) revenue followed, with 118576 billion yuan China United Network Communications Limited(600050) ranked third, with an operating revenue of 89.022 billion yuan, both of which achieved substantial growth. With the gradual decline of traditional business, the industrial digitization of the three operators has emerged and become the pillar of revenue. In the first quarter, the business revenue of China Mobile's dict (big data and informatization) was 23.7 billion yuan, a year-on-year increase of 50.9%. In the first quarter, the digital business of China Telecom Corporation Limited(601728) industry also accelerated, with revenue reaching 29.414 billion yuan, a year-on-year increase of 23.2% China United Network Communications Limited(600050) of big computing and big data services have achieved double-digit growth. We believe that in the future, with the large-scale production of 5g, the network operation and support expenditure will increase rapidly. The expansion of information service business such as dict will also trigger a strong demand for transformation and upgrading resources. It is suggested to pay attention to the new growth space of operators under the continuous promotion of 5g industrial expansion and national digital transformation.
Key investment points:
One week's industrial news: (1) Ministry of industry and information technology: the number of number carrying network transfer users in China has exceeded 57 million;
(2) MIIT: 1340005g base stations will be built in China in the first quarter of 2022; (3) 5g start up the mountain and go to the countryside! Multiple ministries and commissions issued the key points of digital village development in 2022; (4) Analysis of Q1 transcripts of three major operators: Double growth of revenue and profit China United Network Communications Limited(600050) takes the lead; (5) Comparison of average download rate of Q4 fixed broadband among the three operators in 2021: China Telecom Corporation Limited(601728) the highest; (6) The global 5g patent activity report (2022) was released: Huawei won the "championship" in the number of effective global patent families; (7) China Telecom Corporation Limited(601728) once again join hands with beacon fire construction g.654 E ultra high speed backbone network; (8) Omdia analyzes the EU's 6G vision: further technology and infrastructure investment plans are needed; (9) Global smartphone shipments fell 11% in the first quarter of 2022
Investment suggestions:
With the gradual advancement of 5g construction and the continuous high growth of cloud computing construction scale, the fundamentals of the communication industry may continue to improve in 2022. In terms of 5g construction, with the implementation of the "14th five year plan" for the development of information and communication industry, the goal of 5g construction in the future is clear. In the next three to five years, 5g construction will also maintain a stable pace of construction investment. However, with the gradual progress of construction, the downstream supporting applications will gradually mature, thus driving the relevant construction of 5g again.
We suggest paying attention to four investment tracks in the communication industry: (1) operators & equipment manufacturers: 5g construction continues to promote, and the prosperity of traditional communication services is rising. With the expansion of 5g construction, the performance of communication construction and operation and maintenance industrial chain has increased significantly, and the cloud network construction of data center and 5g2b business also opens new growth space for operators & communication equipment manufacturers. (2) Optical module: with a new round of demand growth and the promotion of optical module technology, the industry is expected to usher in a new round of double clicking in 2022. It is suggested to pay attention to the leading optical module enterprises on the digital communication side. (3) Internet of things module: in the next two years, the Internet of vehicles module will still be one of the main directions of the future market growth of the Internet of things module. It is suggested to pay attention to the leading enterprises with deep layout in the Internet of vehicles industrial chain. (4) Temperature control: it is suggested to pay attention to some leading temperature control enterprises that have the ability to transplant the original data center liquid cooling technology to the energy storage system.
Risk factors:
Slow down the price fluctuation of upstream raw materials.
