1. Valuation level: in the middle and later period of 5g, the performance of the industry in the capital market is at the lowest level in history, and the market expectation is generally pessimistic.
2. Financial aspect: the overall operation of the industry is stable, the revenue and profit continue to grow positively, and the performance sustainability slightly exceeds the market expectation.
3. Sub sectors: from the medium and long-term trend, operators, main equipment manufacturers, Beidou, private network communication, Internet of things modules and other industries will still be in an upward trend
1) telecom operators: with the continuous investment in innovation fields such as IDC, IOT, smart home and cloud business, the overall cloud and intelligent transformation and upgrading of operators will help the industry transform from channel to ICT comprehensive business, sink the overall value chain of the industry to b-end application, continue to expand the industry boundary and improve the overall valuation level of the industry..
2) main equipment manufacturers: under the background that the progress of 5g network construction is slightly lower than expected, the growth of major manufacturers is higher than expected, and will grow to 10gpon and government enterprise business in the future.
3) Beidou: the market application is gradually mature, and the policy accelerates the iterative upgrading of “Beisan”.
4) Internet of things: the epidemic catalysis industry accelerated its growth, and the gross profit margin declined due to the expansion of business categories.
5) IDC: the overall industry cycle is still at the bottom, waiting for the formation of new industrial mergers and acquisitions under industry competition.
4. Investment suggestions
At present, the valuation of the communication sector has fallen to a historical low, the growth is determined, and the sector has entered the value buying range, which is recommended this week
1) for undervalued and high dividend, telecom operators (a + H) with strong consumption attributes must be selected: China Mobile, China Telecom Corporation Limited(601728) , China United Network Communications Limited(600050) ;
2) main equipment with underestimated value still growing: Unisplendour Corporation Limited(000938) (West China Communication & computer joint coverage), Zte Corporation(000063) ;
3) IDC and optical modules in the East digital West computing industry chain: Beijing Sinnet Technology Co.Ltd(300383) , Guangdong Aofei Data Technology Co.Ltd(300738) , Eoptolink Technology Inc.Ltd(300502) , Suzhou Tfc Optical Communication Co.Ltd(300394) , Accelink Technologies Co.Ltd(002281) , Zhongji Innolight Co.Ltd(300308) etc;
4) high growth energy informatization sector: Longshine Technology Group Co.Ltd(300682) (West China Communication & computer joint coverage), Willfar Information Technology Co.Ltd(688100) etc;
5) 10g-pon and home broadband design industrial chain: Hangzhou Anysoft Information Technology Co.Ltd(300571) , Sichuan Tianyi Comheart Telecom Co.Ltd(300504) etc;
6) other stocks: Guangzhou Haige Communications Group Incorporated Company(002465) (Beidou 3 penetration increased) (West China Communication & Military Industry joint coverage), Beijing Relpow Technology Co.Ltd(300593) (West China Communication & Military Industry joint coverage), Tcl Technology Group Corporation(000100) (panel price bottomed out) (West China Communication & electronic joint coverage), Tianjin 712 Communication & Broadcasting Co.Ltd(603712) (military industry informatization), Goldcard Smart Group Co.Ltd(300349) (West China Communication & Machinery Joint coverage), etc.
5. Risk warning
The capital expenditure and construction progress of 5g operators are less than expected; 5g related technical solutions bring new changes to the competition pattern; Affected by macroeconomic factors, the expenditure of Internet companies is lower than expected; Risk of uncertainty caused by epidemic situation; Systemic risk.
