We draw the following conclusions by combing the annual report of 21 years and the quarterly report of 22 years. See the text for the sample selection.
(1) the industry’s revenue returns to high growth in 2021. With the continuous recovery of China’s economy in 2021, the communication industry returned to growth. In 2021, the revenue of the whole communication industry reached 2496.2 billion yuan, a year-on-year increase of 13%. After excluding ZTE and the three operators, the revenue was 771.4 billion yuan, a year-on-year increase of 21%. 22q1 affected by the epidemic and other factors, the growth rate of the industry slowed down slightly, but the continuous good trend of high boom industries such as the Internet of things and optical modules in the industry has not changed, and the growth of the industry will continue to be good in the second half of this year.
(2) occasional events affect the profits of the industry, and the high boom track continues to be strong. In 2021, the communication industry realized a net profit attributable to the parent company of 159.7 billion yuan, a year-on-year increase of 3%. After excluding ZTE and the three operators, the industry realized a profit of 2 billion yuan, a year-on-year decrease of 86.4%. The decline in annual profits was mainly due to the impact of private network communication events and the rise in the price of upstream raw materials. But at the same time, such as optical modules, Internet of things and other high boom tracks, the industry profits have improved significantly. We believe that with the completion of the impairment provision of relevant companies in the event and the small subsequent impact of the private network communication event, and the gradual improvement of inventory reserves as companies in the industry begin to transmit costs to the downstream, we believe that 2021 may be the low profit point of the industry. With the recent resumption of work and production in various places in an orderly manner, we might as well be optimistic about the market expectation in the second half of the year.
(3) the expense side remains stable and the reserve of raw materials continues to be abundant. From the perspective of cost rate during the period, the cost of the communication industry remained stable and fluctuated slightly on the basis of good cost rate control in the first half of the year, reflecting the continuous optimization of the personnel structure and operation mode of enterprises in the industry and the continuous improvement of management efficiency. In terms of inventory, the proportion of inventory in revenue and the proportion of raw materials in inventory of industrial enterprises in 2021 were significantly higher than that in 2020, reflecting the continuous reserve of industrial enterprises under the rise of upstream prices, which laid a good foundation for cost transmission and profit improvement in the later stage.
(4) among the sub industries, the Internet of things and optical modules are booming, and operators are accelerating their growth. (1) The development of the Internet of things sector has accelerated under the trend of 10000 households interconnection, and the global module connection number and shipment volume have continued to rise. At the same time, under the intelligent automobile, module manufacturers have actively developed vehicle customers and successfully opened the second growth curve. (2) The boom of overseas digital communication of optical modules continues, and the demand of overseas cloud manufacturers for cloud based construction is still strong. With the promotion of “counting from east to west” in China and the restart of 5g construction, optical module manufacturers will still maintain good growth throughout the year. (3) With the listing of China Mobile in the first quarter, the three operators gathered in a shares, and the “a + H” capital pattern was officially established. From the annual performance, operators b-end and C-end resonated and returned to steady growth. Subsequently, with the increase of dividends and the continuous development of b-end high value-added business, operators are expected to open up the space for valuation repair and occupy a unique position in the industry comparison of a shares.
(5) investment strategy: be optimistic about the second half of the year, with operators as the shield and high prosperity as the spear. Looking at the whole year from the current time point, we believe that the impact of the epidemic will eventually fade and the development trend of high boom industries will not change. In the current shock range at the bottom of the market, the layout of the communication industry should highlight both attack and defense. Attack: continue to seize the two high boom tracks of optical module and Internet of things, and cherish the undervalued buying opportunities brought by high market differentiation. Shou: in the uncertain market environment, operators with the attribute of “mandatory consumption + high cash flow, low debt + undervalued value” should be grasped to resist the fluctuation of macro and market environment.
Recommended object:
1) underestimatetargets of the high boom track: 1) underestimateunderestimateunderestimatetargets of the high boom track: Suzhou Tfc Optical Communication Co.Ltd(300394) .
2) operators with outstanding defense attributes: China Mobile, China Telecom Corporation Limited(601728) , China United Network Communications Limited(600050) .
Risk tip: the progress of 5g fails to meet expectations, and the global trade friction intensifies
