Zhitong Finance APP was informed that Tianfeng Securities released a research report saying that the "East Number West Calculation" project was fully launched, and the backbone enterprises of the data center are expected to usher in new opportunities for development. At the same time, the demand for supporting equipment such as data center construction, operation and maintenance, as well as network equipment, transmission equipment, temperature-controlled cooling, and UPS power supply within the data center is expected to continue to grow. On the other hand, in order to optimize the structure of the communication network and improve the quality of network transmission, the telecommunications network links such as transmission network equipment, optical fiber cables, and optical modules are expected to usher in incremental demand. The core opportunities of the 5G big cycle are in 5G networks (main equipment, fiber optic cables, etc.) + 5G applications (Internet of Things / Internet of Vehicles + Cloud Computing + UC & Video + Traffic), and overall, the agency maintains the industry's "stronger than the big city" rating.
From the perspective of operating income, the 21Q4 and 22Q1 revenues of the communication equipment industry increased by 12.2% and 10.3% year-on-year, and the revenue has maintained growth for many consecutive quarters. Among them, in terms of telecommunications equipment, 21Q4 and 22Q1 revenue increased by 13.1% and 9.9% year-on-year, mainly due to: 1) the continuous advancement of 5G scale construction, the increase in the global share of domestic main equipment leaders, and the steady growth of the equipment industry chain; 2) Fiber optic cable prices pick up, while marine/power and other businesses drive growth; 3) Optical devices benefit from data center traffic expansion and upgrading >5G demand gradually recovered to promote growth; 4) Network optimization industry some leading companies business expansion smoothly, ushering in a growth inflection point. Telecom operations 21Q4 and 22Q1 revenue increased by 5.2% and 12.4% year-on-year, which has continued to grow well for several quarters, due to the increase in ARPU value/ new business expansion. Looking forward to the next few quarters, with the stability of epidemic control and the global development of 5G scale construction & the increase in the share of domestic manufacturers, it is expected that the telecom equipment industry is expected to show a sustained and rapid growth trend in the next few quarters; in the field of non-telecom equipment, the Internet of Things, Crystal Oscillator, UC Unified Communications, IDC and Beidou Military Industry will continue to be prosperous, and the focus is promising.
From the perspective of net profit, the net profit attributable to the parent company of the communication equipment industry 22Q1 increased by 27% year-on-year, reflecting the industry's gradual removal from the impact of upstream price increases and shortages. The agency believes that looking forward to the next few quarters, with the stabilization of epidemic control and the continuous large-scale construction and application of 5G in the world, the net profit attributable to listed companies in the industry will be expected to increase steadily.
From the perspective of the overall industry, the communication hardware side, 5GCapex has a certain periodicity, but standing at the global 5G construction rhythm, the next 3-4 years are expected to continue to prosper, focusing on high barriers & globalization & share increase & scale effect of the subdivision direction (such as the main equipment); Optical fiber and cable ushered in the opportunity of rising volume and price, marine & power opened up more space; the share of network excellence leaders increased + new business entered the harvest period. The application side is partial to the post-cycle, the growth sustainability is good, focusing on the high-prosperity segment, the competitiveness is strong, and the future growth logic is clear: operators, communication + energy storage / new energy, Internet of Things / Internet of Vehicles, cloud computing, optical modules and other high-quality targets.
Combined with the matching of the valuation and growth of the sector and the company, the agency recommends the following key recommendations:
1. 5G network
1. Main equipment manufacturer: Key recommendation: ZTE (000063.SZ);
2. Optical fiber and cable: Key recommendations: Zhongtian Technology (600522.SH) (full potential of marine and new energy sectors, optical fiber and cable boom cycle opened), Hengtong Optoelectronics (600487.SH) (marine + optical fiber and cable dual drive), it is recommended to pay attention to: Changfei optical fiber (601869.SH) (optical fiber and cable volume and price rise), Yongding shares (600105.SH) (optical communication recovery, automotive wiring harness incremental space);
3. Optical transceiver & optical devices: Zhongji Innolux (300308.SZ) (the world's leading optical transceiver), Tianfu Communications (300394.SZ), Xinyisheng (300502.SZ), Guangxun Technology (002281.SZ), Borche Technology (300548.SZ), Optical Library Technology (300620.SZ), China Porcelain Electronics (003031.SZ), Taichen Light (300570.SZ), Cambridge Technology (603083.SH);
Second, 5G application side (automotive intelligence, etc.)
1. Internet of Things/Internet of Vehicles: Key recommendations: Skyworth Digital (000810.SZ) (intelligent cockpit + meta-universe VR, home appliance joint coverage), Topband (002139.SZ) (intelligent controller + energy storage, electronic joint coverage), Guanghetong (300638.SZ), Hanwei Technology (300007.SZ) (mechanical joint coverage), Mobile Communications (300590.SZ), Quection Communications (603236.SH), Wasion Information (688100. SH) (mechanical joint coverage), Meige Intelligent (002811.SZ), Youfang Technology (688159.SH), Sifang Optoelectronics (688665.SH) (mechanical joint coverage); It is recommended to pay attention to: Huagong Technology (000988.SZ) (vehicle sensor amplification), Yinghantong (688080.SH), Yihua Co., Ltd. (002897.SZ) (automotive connector + photovoltaic), Dingtong Technology (688668.SH), Ruida (688800.SH), Hongquan Internet of Things (688288.SH);
2. Online office/video conferencing: Key recommendation: Yilian Network (300628.SZ) (UC terminal solution leader, continuous improvement of product matrix); It is recommended to pay attention to: Starnet Ruijie (002396.SZ) (cloud office/cloud desktop, video conferencing), Monternet Technology (002123.SZ) (rich media SMS leader), Huichang Communication (300578.SZ) (video conferencing software and hardware layout), etc.;
Third, communication + energy
1. Sea breeze submarine cable: Zhongtian Technology (full of potential in the marine and new energy sectors, the boom cycle of optical fiber and cable is opened), Hengtong optoelectronics (double drive of sea breeze + optical fiber cable);
2. IDC: Key recommendations: Kehua Data (002335.SZ) (joint coverage of electric new), Runjian (002929.SZ) (private communication network management and maintenance leader, key breakthrough in photovoltaic operation and maintenance), Sinnet (300383.SZ), recommended attention: Tsinghua Unigroup (000938.SZ), Invic (002837.SZ), Aofei Data (300738.SZ), Highland (300065.SZ) (UDC), Dataport ( 600881.SH) etc.;
4. Operators
Low valuation, high dividends: China Mobile (600941.SH), China Telecom (601728.SH), China Unicom (600050.SH);
5. Military Communications & Beidou
Communication is a serious shortcoming in the field of national defense informatization, ultra-short wave and area wide penetration rate can be expected, it is recommended to pay attention to: Haige Communications (002465.SZ), 712 (603712.SH), Shanghai Hanxun (300762.SZ), Hua test navigation (300627.SZ);
Risk warning: Operators' capital expenditure has fallen more than expected, the impact of the global epidemic has exceeded expectations, industry competition has intensified, the impact of raw material shortages and price increases has exceeded expectations, the risk of exchange rate fluctuations, and the small number of selected samples may lead to deviations in statistical results