Last week was the second trading week of A-Shares in 2022. The CSI 300 index fell 1.98%, and 6 of the 31 industries in Shenwan class rose and 25 fell. The overall trend of the communication industry was stronger than the market last week, down 1.39%, ranking 15th and third in the TMT industry. In the 14th five year plan, “Digital China” is discussed separately as a special topic, which is also the first time to focus on the deployment of digitization as a special topic, clarify the content of the digital economic system, take the scene as an important starting point for the development of the digital economy, and clearly emphasize the important role of data elements for the first time. The essence of digital transformation is to use digital technology to give new momentum to social high-quality development, so as to redefine the process of value creation. In the new round of digital transformation for higher connection orders of magnitude, stronger data transmission capability is its indispensable support. A large amount of information infrastructure will accelerate China’s digital transformation in the future. Under the open, service-oriented and ecological digital enterprise operation mode, the change of enterprise business model and operation mode may bring more information transmission demand and bring more market value to the whole communication industry. It is suggested to continue to pay attention to the investment opportunities brought by the improvement of industry prosperity.
Key investment points:
One week industrial news: (1) the State Council printed and distributed the “14th five year plan” for digital economy development; (2) Xi Jinping : continuously strengthen, optimize and expand China’s digital economy; (3) The global 5g commercial network has reached 200; (4) 5g news is coming! China United Network Communications Limited(600050) has been launched for trial use, and China Telecom Corporation Limited(601728) is planned to be launched this month; (5) China iron tower starts the centralized purchase of lithium titanate replacement battery from 2021 to 2022, with an estimated 68.48 million wh; (6) Nokia raised its operating profit margin forecast for 2021, with an estimated annual net sales of 22.2 billion euros; (7) Layout of meta universe: Tencent plans to acquire game phone manufacturer black shark, with a valuation of 2.7 billion yuan; (8) The second generation satellite system of the satellite chain may be launched or will be launched, and 400 satellites can be launched at a time.
With the gradual advancement of 5g construction and the continuous high growth of cloud computing construction scale, the fundamentals of the communication industry may continue to improve in 2022. In terms of 5g construction, with the implementation of the development plan of the information and communication industry in the 14th five year plan, the future construction goal of 5g is clear. In the next three to five years, 5g construction will also maintain a stable pace of construction investment. However, with the gradual progress of construction, the downstream supporting applications will gradually mature, so as to drive the relevant construction of 5g again.
In the future when the structural market in the communication industry continues to evolve, we suggest paying attention to four investment tracks in the communication industry: (1) operators & equipment manufacturers: 5g construction continues to promote, and the prosperity of traditional communication business is rising. With the expansion of 5g construction, the performance of communication construction, operation and maintenance industrial chain has increased significantly, The cloud network construction of data center and 5g2b service also opens new growth space for operators & communication equipment manufacturers. (2) Optical module: with a new round of demand growth and the promotion of optical module technology, the industry is expected to usher in a new round of development in 2022. It is suggested to pay attention to the leading optical module enterprises on the digital communication side. (3) Internet of things module: in the next two years, the Internet of vehicles module will still be one of the main directions of the future market growth of the Internet of things module. It is suggested to pay attention to the leading enterprises with deep layout in the Internet of vehicles industrial chain. (4) Temperature control: it is suggested to pay attention to some leading temperature control enterprises capable of transplanting the original data center liquid cooling technology to the energy storage system.
Risk factors: increased trade friction, China’s 5g construction does not meet expectations, the slowdown of global cloud computing construction, and the price fluctuation of upstream raw materials.
