Industry highlights tracking: 2022 China Spacesat Co.Ltd(600118) navigation and location service industry development white paper released. The boom of Beidou industry continued in 2021, among which high-precision applications continued to grow. Since 2022, Beidou has been continuously supported by industrial policies, and high-precision applications have continued to enable many industrial application fields such as geological disaster monitoring, water conservancy monitoring, precision agriculture, precision construction and automatic driving. The market demand is expected to maintain a high growth trend. It is suggested to pay attention to Beidou industrial chain, such as [ Shanghai Huace Navigation Technology Ltd(300627) ], [ Beijing Bdstar Navigation Co.Ltd(002151) ].
The construction of computing power network has made steady progress China Telecom Corporation Limited(601728) launched the special optical cable construction of “counting from the east to the west”, reflecting the steady progress of China’s computing network construction. Computing power network includes data center, all-optical network and operation platform. The accelerated construction of data center directly drives the demand growth of servers, switches and optical modules. The construction of all-optical network also releases the demand for g.654e optical fiber and OTN equipment, which directly benefits ICT equipment manufacturers. It is suggested to pay attention to [ Zte Corporation(000063) ], [ Unisplendour Corporation Limited(000938) ], [ Zhongji Innolight Co.Ltd(300308) ], [ Jiangsu Zhongtian Technology Co.Ltd(600522) ], [ Suzhou Tfc Optical Communication Co.Ltd(300394) ].
Key industry data tracking: 1) operator data: according to the data of the Ministry of industry and information technology, the total number of mobile phone users in China reached 1.66 billion in March 2022, including 403 million 5g mobile phone users, a net increase of 29.05 million over the end of the previous year and a penetration rate of 24.3%; 2) 5g base stations: as of March 2022, the total number of 5g base stations has reached 1.559 million; 3) Cloud computing and chip manufacturers: 21q4, bat capital expenditure totaled 25.2 billion yuan (year-on-year + 51%, month on month + 12%); 22q1, the capital expenditure of the three major overseas cloud manufacturers and meta totaled US $35.518 billion (year-on-year + 30%, month on month – 2.8%). Xinhua’s revenue in April 2022 was NT $454 million (year-on-year + 60.8%, month on month + 4.9%); Intel dcai22q1’s revenue increased by + 22% year-on-year to US $6 billion; Amd computing and graphics 22q1 achieved a revenue of $2.8 billion (year-on-year + 33%, month on month + 8%).
Market review: in the past two weeks, the communication (Shenwan) index rose by 4.75%, and the Shanghai and Shenzhen 300 index rose by 5.16%. The performance of the sector is weaker than the market, with a relative return of – 0.41%, ranking 10th in the Shenwan industry. There are 148 companies in the communication stock pool we built, with an average increase or decrease of 6.62% in the past two weeks. In various sub sectors, IDC, Internet of things, optical fiber and cable and other sectors led the rise, rising by 10.7%, 8.7% and 8.4% respectively.
Investment suggestion: look at the communication industry in May. There are three main lines: (I) the high-quality leaders in the high elasticity industry with outstanding performance in the first quarter and limited impact by the epidemic in the second quarter mainly include: Internet of things module ( Quectel Wireless Solutions Co.Ltd(603236) ), automobile connector ( Suzhou Recodeal Interconnect System Co.Ltd(688800) ), sea optical cable ( Jiangsu Zhongtian Technology Co.Ltd(600522) ), optical module ( Zhongji Innolight Co.Ltd(300308) ), ICT equipment ( Unisplendour Corporation Limited(000938) ). (II) industries actively promoted by policies: typical ones are Beidou ( Shanghai Huace Navigation Technology Ltd(300627) , Beijing Bdstar Navigation Co.Ltd(002151) ), industrial Internet ( Beijing Inhand Networks Technology Co.Ltd(688080) , 3Onedata Co.Ltd(688618) ). It is expected that more industrial policies will be implemented to accelerate the development of the catalytic industry. (III) high quality companies with a large proportion of overseas business and benefiting from the depreciation of RMB mainly include: Yealink Network Technology Co.Ltd(300628) , Suzhou Tfc Optical Communication Co.Ltd(300394) , etc.
Key recommended combinations in May 2022: Quectel Wireless Solutions Co.Ltd(603236) , Yealink Network Technology Co.Ltd(300628) , Fibocom Wireless Inc(300638) , Suzhou Tfc Optical Communication Co.Ltd(300394) , Guangdong Shenling Environmental Systems Co.Ltd(301018) , Unisplendour Corporation Limited(000938) , Suzhou Recodeal Interconnect System Co.Ltd(688800) .
Risk tip: the global epidemic intensifies the risk, 5g investment and construction is less than expected, Sino US trade friction and other external environmental changes.
