The valuation of the communication sector is expected to recover from the bottom and maintain the "recommended" rating of the communication industry
Weekly market: this week (from January 9, 2022 to January 14, 2022), the Shanghai Composite Index fell 1.63%, the Shenzhen Component Index fell 1.35% and the gem index rose 0.73%. In this week's industry index, the communication sector fell by 1.39%, with a medium performance; Among the 109 stocks in the communications sector, the number of rising / falling stocks was 62 / 46, accounting for 56.88% / 42.20% respectively. Among them, Zhejiang Shengyang Science And Technology Co.Ltd(603703) (+ 21.41%), Tianjin Futong Information Science&Technology Co.Ltd(000836) (+ 17.14%) and Raisecom Technology Co.Ltd(603803) (+ 16.71%) were among the top three in terms of growth.
In terms of sub sections: according to our data on the division of Companies in the communication industry, the operator (H-share) section continued its strong performance last week, with an increase of 2.39%.
The 14th five year plan for the development of digital economy was issued, and digital infrastructure is expected to exceed expectations
According to the development plan, it is expected that by 2025, China's digital economy will move towards a comprehensive expansion period, and the added value of core industries of digital economy will account for 10% of GDP. The plan defines the main indicators of digital economy development: by 2025, the number of IPv6 active users will reach 800 million; The number of Gigabit broadband users has reached 60 million; The scale of software and information technology services reached 14 trillion yuan; The application penetration rate of industrial Internet platform has reached 45%; The national online retail sales reached 17 trillion yuan; The scale of e-commerce transactions reached 46 trillion yuan; The number of real name users of online government services has reached 800 million.
We believe that the issuance of the plan means that China's 5g development will usher in a new stage of inclusive sharing, and the requirements for 5g wide coverage and stability will be more urgent. After the operator sector includes the previous China Telecom Corporation Limited(601728) and the latest China Mobile's return to a shares, it will better ensure the stabilization of a large amount of capital expenditure investment in the early stage in the medium and long term, Effectively promote the stability and upward trend of the overall business cycle of the communication industry. With the continuous promotion of the construction of base stations of the three major operators in China, 5g applications continue to accumulate, innovate and make breakthroughs, and 5g traffic continues to grow rapidly,
Digital infrastructure is expected to exceed expectations.
Key directions of communication investment: yuancosmic infrastructure, 5g application and new business breakthrough
Recommended targets: yuancosmic infrastructure target Zte Corporation(000063) (000063), optical module Zhongji Innolight Co.Ltd(300308) (300308), Suzhou Tfc Optical Communication Co.Ltd(300394) (300394); It is suggested to focus on the subdivided areas and targets:
Fiber optic cable section: Yangtze Optical Fibre And Cable Joint Stock Limited Company(601869) (601869), Hengtong Optic-Electric Co.Ltd(600487) (600487);
Related to vehicle / Internet of things / energy Internet of things: Queclink Wireless Solutions Co.Ltd(300590) (300590), Shenzhen H&T Intelligent Control Co.Ltd(002402) (002402), Willfar Information Technology Co.Ltd(688100) (688100), video conference Yealink Network Technology Co.Ltd(300628) (300628), Bizconf Telecom Co.Ltd(300578) (300578), automatic driving breakthrough Shanghai Huace Navigation Technology Ltd(300627) (300627) superimposed by leaders in disaster monitoring section, 5g message Montnets Cloud Technology Group Co.Ltd(002123) (002123); And Runjian Co.Ltd(002929) (002929) and Jiangsu Zhongtian Technology Co.Ltd(600522) (600522) with continuous breakthroughs in new energy business.
Risk tips
Risk of rising raw material prices; Global epidemic impact and uncertainty of foreign policy environment; 5g commercial promotion was less than expected.
