Investment advice
Industry strategy: the 21-year annual report and 22-year quarterly report of the communication industry are stable and good, and the value distribution is transferred to the new generation ICT industry. It is suggested to grasp the relevant investment opportunities from two main lines: first, the head company with good market pattern and scale effect in the supply chain of new ICT infrastructure such as 5g, cloud, optical network, IOT perception and satellite Internet; Second, in the scenario of the integration of communication and vertical industries, including the high growth segment leaders in the tracks of emerging industries such as aiot, digital energy and smart cars.
Recommended combination: China Mobile (operator), Quectel Wireless Solutions Co.Ltd(603236) (Internet of things module), Shenzhen H&T Intelligent Control Co.Ltd(002402) (intelligent controller), Shenzhen Topband Co.Ltd(002139) (intelligent controller), Shanghai Baosight Software Co.Ltd(600845) (IDC).
Industry perspective
The overall performance is stable and good, and the sectors are divided under the influence of the epidemic. In 2021, the overall revenue of the communication sector was 427.8 billion yuan, a year-on-year increase of 6.75%; The net profit attributable to the parent company was 13.9 billion yuan, a year-on-year increase of 3.46%. Affected by the epidemic situation and the 21-year base, the segments in 2022q1 are differentiated, and the year-on-year growth rate is mainly between 0% and 30%. The growth rate of communication components (+ 28.74%), optical modules and devices (+ 27.04%), cloud video (+ 26.25%), optical communication (+ 20.05%) and communication equipment (+ 17.91%) ranked among the top five. The growth rate of cloud computing, optical fiber and optical cable, military special communication, antenna RF and Internet of things was between 5% and 10%, the growth rate of network planning and network optimization was 4.48%, and the revenue of satellite communication and navigation decreased by 1.31%.
5g investment turns to demand driven, focusing on investment opportunities in subdivided fields such as operators, main equipment manufacturers, optical communication and VR. The total capital expenditure of the three operators and radio and television 5g21 was 234.1 billion, a year-on-year increase of 33.2%. By the end of the 21st century, a total of 1.425 million 5g base stations had been completed and opened, and the construction of 5g base stations in China accounted for more than 70% of the world. Operator ARPU bottomed out and rebounded, and China Mobile’s revenue showed double-digit growth for the first time in 21 years after 2008. The scene of optical communication city has been improved, the number of VR terminals in the world has exceeded ten million for the first time, and the ecology and application have accelerated.
Cloud computing is still an important investment opportunity for 22 years. China’s cloud giant’s capital expenditure rebounded in Q4 in 21 years, focusing on the four investment opportunities in the cloud computing industry chain. 1) IAAs: large cloud manufacturers continue to increase capital expenditure, with strong industry growth certainty. 2) IDC: there is room to repair the undervalued value in the sector as a whole, focusing on the accessory manufacturers with technical and service advantages and the head third-party IDC manufacturers under the policy guidance of “counting from the east to the west”. 3) Server: according to IDC data, the compound growth rate of China’s server market in 21-25 years was 12.5%, and there was a structural opportunity to evolve to high-end servers. 4) SaaS: enterprise SaaS manufacturers are in a critical transition period. With the localization substitution process and the acceleration of cloud transformation, general ERP manufacturers such as Kingdee and UFIDA are expected to increase the proportion of cloud business revenue and profit level rapidly.
The performance of the Internet of things in the past 21 years has verified that it perceives the growth of connection layer height and is optimistic that the profitability of the whole year will continue to improve. From the performance of the company in the whole year of the 21st century and 22q1, the main benefit link of the Internet of things is still the perception connection layer, and modules and intelligent controllers are the main benefit tracks. The compound growth rate of revenue / net profit in recent five years is 30% +. Among them, the Matthew effect of the module track is significant, benefiting from the wide connection characteristics of the Internet of things. The performance of the platform module leader in Quectel Wireless Solutions Co.Ltd(603236) 21 and 22q1 exceeded expectations Affected by repeated epidemics, rising prices of raw materials and changes in downstream demand, the short-term performance of the intelligent controller track is under pressure. In the whole year of 21, the revenue of Shenzhen H&T Intelligent Control Co.Ltd(002402) , Shenzhen Topband Co.Ltd(002139) and Shenzhen Topband Co.Ltd(002139) still maintained a high growth of 20% + in terms of intelligent controller. Looking forward to 2022, intelligent controller and module manufacturers are expected to benefit from the weakening of supply and the increase of demand in downstream scenarios, so as to further improve their profitability.
Risk tips
5g commercial progress is less than expected, the development of public cloud slows down, the growth of Internet of things connections is less than expected, and the development of intelligent driving industry is less than expected.
