Investment summary:
Talk every Monday:
Driven by 5g new infrastructure, the overall revenue of the communication industry maintained a relatively high growth, and the operation was stable and good.
The operating revenue of the communication industry increased by 28.62% year-on-year in 2021 and 23.94% in Q1 in 2022, further slowing down.
In 2021, the net profit attributable to the parent company of the communication industry decreased by – 18.94% year-on-year; In 2022, the growth rate of Q1 was 30.52%, and the profitability was further enhanced.
The gross profit margin and net profit margin of the communication industry showed a trend of further improvement, and the expense rate remained stable and showed a further downward trend during the period.
We resumed the rise and fall of the communication sector, ranking lower than the middle compared with other industries.
In 2021, Shenwan communication index increased by 3.05%, ranking 16th among Shenwan’s 28 primary industries.
In 2022, Q1 Shenwan communication index increased by – 21.99%, ranking 19th among Shenwan’s 28 primary industries.
Communication equipment manufacturers: benefiting from the large-scale construction of China’s 5g network and the digital transformation of the industry, the revenue and net profit of communication equipment manufacturers have increased, and the gross profit margin has continued to improve.
Operators: the performance of operators is stable and good, and 5g penetration continues to improve. With the rapid growth of emerging digital industry business and continuous optimization of revenue structure, it is expected to open the second curve of operator growth.
Internet of things: the prosperity of the Internet of things industry continues to improve, with strong demand and strong industry certainty.
The Internet of things communication module industry has strong demand and is the foundation of the interconnection of all things. At the same time, in 2021, the whole industry was affected by the price rise and shortage of upstream raw materials, fierce competition in the industry and further pressure on the gross profit margin.
The short-term performance of the intelligent controller industry is under pressure and does not change the long-term good trend. Due to the impact of the price rise of upstream raw materials and the sealing and control of the epidemic in Shenzhen, the revenue of the intelligent controller industry slows down, but the demand for intelligent controllers in automotive electronics, new energy vehicles and other fields is still strong.
Optical module: benefiting from the pull of telecom market and digital communication market, the optical module industry continues to grow. The performance growth of optical module manufacturers in 2021 mainly benefited from the high prosperity of the global digital communication market. Overseas cloud manufacturers increased capital expenditure, the gross profit margin of the industry changed little, and the profitability remained relatively stable.
In 2021, the Eoptolink Technology Inc.Ltd(300502) operating revenue increased by 45.6% year-on-year, and the net profit attributable to the parent company increased by 34.6% year-on-year. In 2021, the proportion of overseas revenue increased significantly, and the growth rate slowed down in 2022q1.
Q1 Zhongji Innolight Co.Ltd(300308) performance in 2022 exceeded market expectations. The operating revenue increased by 41.9% year-on-year, and the net profit attributable to the parent company increased by 63.4% year-on-year. According to the latest report of omdia, the market share of the company ranked second in the world in 2021, accounting for about 10%.
Market review:
This week (202204.25202204.29), the Shanghai Composite Index, Shenzhen Component Index and gem index increased by – 1.29%, – 0.27% and 0.98% respectively, and the Shenwan communication index increased by – 1.10%, ranking 11th in Shenwan’s 28 primary industries.
Performance of individual stocks in the communication sector this week:
The top five stock price increases are: Jiangsu Zhongtian Technology Co.Ltd(600522) , Qingdao Topscomm Communication Inc(603421) , Willfar Information Technology Co.Ltd(688100) , Shanghai Huace Navigation Technology Ltd(300627) , Quectel Wireless Solutions Co.Ltd(603236)
The top five stock price declines are: Boomsense Technology Co.Ltd(300312) , Beijing E-Techstar Co.Ltd(300513) , Hangzhou Freely Communication Co.Ltd(603602) , Beijing Inhand Networks Technology Co.Ltd(688080) , Dr.Peng Telecom&Media Group Co.Ltd(600804)
Investment strategy: (1) 5g network coverage continues to improve, the number of 5g base stations exceeds 1.56 million, and the leading 5g equipment manufacturer is continuously recommended: Zte Corporation(000063) ; (2) The increase in the penetration rate of 5g package users drives the Arup value of operators. Operators give up the price war and improve user stickiness by providing more high-quality and differentiated services. It is suggested to pay attention to: China Mobile; (3) The development of the Internet of things industry has entered the fast lane, focusing on the investment opportunities of vehicle communication modules. It is suggested to pay attention to Fibocom Wireless Inc(300638) , Quectel Wireless Solutions Co.Ltd(603236) ; (4) In the context of double carbon, green energy conservation has become the main theme. The key recommendation is precision temperature control faucet: Shenzhen Envicool Technology Co.Ltd(002837) .
Risk tip: the development of 5g is not as expected, the trade friction between China and the United States has further escalated, and the epidemic has further spread.
