In 2021, the overall trend of the communication industry is similar to the market, and the valuation is still low: in 2021, the communication industry index increased by 3.05% year-on-year, the CSI 300 fell by 5.20% year-on-year, and the overall trend of the communication industry is stronger than the CSI 300 index by 8.25%; The overall communication industry index of Shanghai and Shenzhen decreased by 14.68% year-on-year in 2022q1, and the overall communication industry index of Shanghai and Shenzhen decreased by 14.300% year-on-year. As of May 12, the overall ttmpe of the communication industry was 26.97 times, down 13.36 times from the highest valuation point (40.33 times) this year. Observing the valuation level of the communication industry in the past decade, the current valuation level only exceeded the historical range of 0.03%. Considering that the performance of the whole communication industry is still improving steadily, and the application scenarios of main products and technologies in the industry are still extensive, the valuation of the communication industry is expected to rebound in the future.
In 2021 and 2022q1, the industry’s revenue and net profit attributable to parent company after deduction of non-profit have maintained rapid growth, and the continuous R & D investment is expected to further improve the industry’s performance: in 2021, the communication industry achieved a revenue of 1250647 billion yuan, a year-on-year increase of 74.86%; The net profit deducted from non parent company was 23.123 billion yuan, a year-on-year increase of 172.38%. In 2022, Q1 communication industry realized a revenue of 546491 billion yuan, a year-on-year increase of 202.25%; The net profit deducted from non parent company was 38.783 billion yuan, a year-on-year increase of 638.46%. In horizontal comparison, the annual net profit attributable to the parent company of the communication industry in 2021 increased by 99.30% year-on-year, ranking seventh among the 31 Shenwan industries, and the overall performance is stronger than the comprehensive level of the industry. The overall performance was good under the dual pressure of the epidemic and the international situation. In 2021, the R & D cost of the communication industry was 25.726 billion yuan, a year-on-year increase of 29.82%. In 2012, the R & D cost of Q1 communication industry was 14.652 billion yuan, with a year-on-year increase of 23.73%. The new infrastructure policy continues to bring benefits to the whole industry, and the demand for downstream 5g and data center continues to improve, which is expected to drive the performance of the communication industry to achieve further growth.
Several segments of the industry showed a rapid growth trend: according to the performance of the whole industry in 2021, each segment of the communication industry maintained a good development trend as a whole, and the net profit of six of the eight segments increased. Among all segments of the communication industry, the performance of Companies in the Internet of things / vehicles and modules and network equipment segments increased rapidly, and the year-on-year growth rate of net profit attributable to the parent was 150.99% and 44.73% respectively. We believe that with the deep integration of the Internet of things / vehicles and modules with specific industries and scenarios, the scale effect will be rapid and large-scale, and the Internet of things / vehicles and module industry is expected to grow rapidly.
Investment suggestions: it is suggested to focus on two main lines: 1) 5g construction is progressing steadily, the investment continues to increase, and the share of head equipment manufacturers continues to rise, Zte Corporation(000063) and other major equipment manufacturers will continue to benefit; 2) With the continuous penetration of 5g, the C-end business of operators has stabilized and rebounded, the revenue of b-end business has increased rapidly, and the investment opportunities of operators are highlighted.
Recommended: operators: China Mobile, China Telecom Corporation Limited(601728) , China United Network Communications Limited(600050) ; 5g main equipment: Zte Corporation(000063) ; Smart energy: Longshine Technology Group Co.Ltd(300682) , Beijing Forever Technology Co.Ltd(300365) , Willfar Information Technology Co.Ltd(688100) , Shenzhen Envicool Technology Co.Ltd(002837) , Nanjing Canatal Data-Centre Environmental Tech Co.Ltd(603912) ; Optical module: Suzhou Tfc Optical Communication Co.Ltd(300394) , Huagong Tech Company Limited(000988) , Zhongji Innolight Co.Ltd(300308) ; IC carrier board / PCB: Shenzhen Fastprint Circuit Tech Co.Ltd(002436) ; Internet of things / Internet of vehicles: Meig Smart Technology Co.Ltd(002881) , Thunder Software Technology Co.Ltd(300496) ;
Recommended target: server / router / switch: Unisplendour Corporation Limited(000938) , Fujian Star-Net Communication Co.Ltd(002396) , Inspur Electronic Information Industry Co.Ltd(000977) ; Optical module: Eoptolink Technology Inc.Ltd(300502) , Cig Shanghai Co.Ltd(603083) , Advanced Fiber Resources (Zhuhai) Ltd(300620) , Broadex Technologies Co.Ltd(300548) ; IC carrier board / PCB: Shennan Circuits Co.Ltd(002916) , Victory Giant Technology (Huizhou)Co.Ltd(300476) , Suzhou Dongshan Precision Manufacturing Co.Ltd(002384) ; Internet of things / Internet of vehicles: Fibocom Wireless Inc(300638) , Quectel Wireless Solutions Co.Ltd(603236) , Shenzhen H&T Intelligent Control Co.Ltd(002402) , Shenzhen Topband Co.Ltd(002139) .
Risk tip: supply system risk caused by Sino US friction; The risk of slowing down the downstream demand of the industry caused by policy changes; Industry competition intensifies risks.
