This week, the CSI 300 fell by 4.19%, and the gem fell by 6.66%, of which the communication sector fell by 3.18%, and the price performance of the sector was stronger than the market; The turnover rate of 126 constituent stocks of the communication (CITIC) index this week was 1.10%; In the same period, the turnover rate of 300 constituent stocks in Shanghai and Shenzhen was 0.44%, and the overall activity of the sector was stronger than that of the market. In terms of individual stocks in the communications sector, the top five gainers this week are: Bybon Group Company Limited(300736) (7.75%), Suzhou New Sea Union Telecom Technology Co.Ltd(002089) (7.25%), Yealink Network Technology Co.Ltd(300628) (4.07%), Fujian Star-Net Communication Co.Ltd(002396) (3.57%) and Gome communications (3.11%); The companies with the top five declines are: bangxun Technology (- 36.51%), Suna Co.Ltd(002417) (- 16.67%), Wuhan Tianyu Information Industry Co.Ltd(300205) (- 14.35%), Eoptolink Technology Inc.Ltd(300502) (- 14.14%), Zhongtongguomai Communication Co.Ltd(603559) (- 13.19%).
The three major operators developed with high quality, and the emerging business maintained a high growth rate. In 2022q1, China Mobile achieved a revenue of 227.3 billion yuan, a year-on-year increase of 14.6%, a service revenue of 193.8 billion yuan, a year-on-year increase of 9.1%, of which the revenue of dict business was 23.7 billion yuan, a year-on-year increase of 50.9% China Telecom Corporation Limited(601728) achieved revenue of 118576 billion yuan, up 11.5% year-on-year, service revenue of 110 billion yuan, up 9.9% year-on-year, of which mobile communication achieved revenue of 49.014 billion yuan, up 5.0% year-on-year, fixed network and smart home revenue of 29.645 billion yuan, up 4.9% year-on-year, industrial digital revenue of 29.414 billion yuan, up 23.2% year-on-year, and Tianyi cloud’s market competitiveness continued to improve China United Network Communications Limited(600050) achieved revenue of 89.022 billion yuan, with a year-on-year increase of 8.2%, service revenue of 81.2 billion yuan, with a year-on-year increase of 9.8%, including mobile service revenue of 41.986 billion yuan, with a year-on-year increase of 2.2%, fixed network broadband access revenue of 11.5 billion yuan, with a year-on-year increase of 5.5%, Internet of things revenue of 2.121 billion yuan, with a year-on-year increase of 40.7%, and the number of Internet of things terminal connections reached 313 million. In terms of profits, China Mobile, China United Network Communications Limited(600050) and China Telecom Corporation Limited(601728) achieved net profits of 25.656 billion yuan / 7.223 billion yuan / 4.634 billion yuan respectively, with a year-on-year increase of 6.5% / 12.1% / 20.6% respectively. The net profit margin of China Mobile decreased slightly, mainly due to the rapid growth of mobile phone sales business with low profit margin.
5g user penetration is close to 50%, and the mobile ARPU value warms up. Traditional telecom services continued to improve. In terms of mobile services, China’s 5g users maintained rapid growth. According to the first quarterly report of the three major operators, by the end of March 2022, the number of users of China Mobile, China Telecom Corporation Limited(601728) , 6 Hainan Jingliang Holdings Co.Ltd(000505) g reached 467 million / 211 million / 171 million respectively, and the number of users of 5g of China Mobile exceeded the sum of China Telecom Corporation Limited(601728) and China United Network Communications Limited(600050) and the number of new users of 5g in a single quarter was 80 million / 23 million / 16 million respectively. The ARPU value of China Mobile continues to pick up. Due to the change from speed increase and fee reduction to specific users and the continuous improvement of 5g user penetration, the ARPU value of China Mobile in 2022q1 is 47.5 yuan, with a year-on-year increase of 0.3%, and the ARPU value of China Telecom Corporation Limited(601728) mobile is 45.1 yuan, which is warmer than that at the end of 2021. In terms of fixed line business, the number of wired broadband customers of China Mobile increased by 8.99 million to 249 million, of which the number of home broadband customers increased by 7.27 million to 225 million China Telecom Corporation Limited(601728) wired broadband subscribers increased by 3.4 million to 173 million. The comprehensive ARPU of China mobile cable broadband and home broadband were 32.4 yuan and 37.8 yuan respectively, with a year-on-year increase of 1.8% and 5.3% China Telecom Corporation Limited(601728) driven by the smart family, the fixed network ARPU value is 46.7 yuan.
The revenue of telecom business was stable and good, and the growth rate of cumulative traffic continued to decline. According to the data of the Ministry of industry and information technology, in the first quarter of 2022, the telecom business revenue totaled 393.5 billion yuan, a year-on-year increase of 9.3%. Emerging businesses achieved a total revenue of 79.7 billion yuan, a year-on-year increase of 36.3%, of which the growth rates of Internet data center, big data, cloud computing and Internet of things were 19.8% / 59.1% / 138.1% / 23.9% respectively. In terms of the number of users, the total number of mobile phone users of the three major operators reached 1.66 billion, a net increase of 18.2 million over the end of the previous year. The total number of fixed Internet broadband access users reached 551 million, a net increase of 15.13 million over the end of the previous year, including 45.96 million fixed Internet broadband access users with access rate of 1000Mbps and above, a net increase of 11.4 million over the end of the previous year. There were 1.52 billion end users of the cellular Internet of things, a net increase of 119 million over the end of the previous year, and the total number of IPTV users reached 360 million, a net increase of 11.21 million over the end of the previous year. In terms of traffic, from January to March 2022, the cumulative traffic of mobile Internet reached 58.7 billion GB, with a year-on-year increase of 22%, and the growth rate decreased by 14 PCT. In March, the mobile Internet access traffic reached 21.4 billion GB, a year-on-year increase of 23. 7%, with a month on month increase of 23.4%, and the average household mobile Internet access traffic (Dou) reached 14.98gb/household, with a year-on-year increase of 17.5% and a month on month increase of 22.5%.
Investment suggestion: pay attention to telecom operators: China Mobile, China Telecom Corporation Limited(601728) , China United Network Communications Limited(600050) ; Data center: Shanghai Baosight Software Co.Ltd(600845) , Kehua Data Co.Ltd(002335) , Beijing Sinnet Technology Co.Ltd(300383) , etc; Equipment manufacturer: Unisplendour Corporation Limited(000938) (Xinhua III), Zte Corporation(000063) , Fujian Star-Net Communication Co.Ltd(002396) ; IDC HVAC equipment: Shenzhen Envicool Technology Co.Ltd(002837) , Nanjing Canatal Data-Centre Environmental Tech Co.Ltd(603912) , Yimikang Tech.Group.Co.Ltd(300249) , etc; Internet of things and car Networking: the Internet of things and networking of things and car Networking: the Internet of things and car Networking: the following: Fibocom Wireless Inc(300638) etc; On board connector: Suzhou Recodeal Interconnect System Co.Ltd(688800) , Wenzhou Yihua Connector Co.Ltd(002897) ; Intelligent controller: Shenzhen Topband Co.Ltd(002139) , Shenzhen H&T Intelligent Control Co.Ltd(002402) , Shenzhen Longood Intelligent Electric Co.Ltd(300543) , Shenzhen Bestek Technology Co.Ltd(300822) ; Optical devices and optical modules: Eoptolink Technology Inc.Ltd(300502) , Suzhou Tfc Optical Communication Co.Ltd(300394) , Accelink Technologies Co.Ltd(002281) ; Military communications and satellite applications: Jushri Technologies Inc(300762) , Tianjin 712 Communication & Broadcasting Co.Ltd(603712) , Shanghai Huace Navigation Technology Ltd(300627) , Chengdu Corpro Technology Co.Ltd(300101) , Guangzhou Haige Communications Group Incorporated Company(002465) , China Satellite Communications Co.Ltd(601698) , etc.
Risk warning events: 5g investment is less than expected, market competition intensifies, overseas trade disputes, market systemic risks, etc
