Today, the communications sector broke out, the communications index (Shenwan) rose 5.23%. The company moved to a strong block of 20% for communications, with guangha communications, Yitong century and Pingzhi information up more than 10%. Eight stocks, including Cambridge Technology and Dongfang communications, rose by the limit. ZTE, the communications leader, rose by more than 8% in volume, with a turnover of nearly 900000.

The reason is that, on the one hand, it is stimulated by the good news that more than 600000 5g base stations will be built next year; on the other hand, due to the large decline of the previous plate, there is a rising demand for the stock price.

On the news side, Xiao Yaqing, Minister of the Ministry of industry and information technology, said at the 2021 national industrial and information work conference held on the 28th that in 2021, 5g network construction and application will be promoted in an orderly manner, 5g coverage in major cities will be accelerated, co construction and sharing will be promoted, and more than 600000 5g base stations will be built. At present, 715000 5g base stations have been built in China.

This means that next year, 5g base station construction and capital investment will be faster and larger, and the new scale may cover the cumulative number of completed stations in recent years.

5g communications sector ushered in a full-scale outbreak

In the first half of 2020, the total capital expenditure of the three operators in 5g is as high as 88 billion yuan, which is obviously accelerated compared with the capital expenditure of 41.2 billion yuan in the second half of 2019. Among them, China Mobile’s capital expenditure in 5g reached 55.2 billion yuan in the first half of the year, up 130% on a month on month basis, surpassing the sum of China Unicom and China Telecom. As far as the capital expenditure structure is concerned, it also inclines to 5g. In the first half of 2020, the proportion of 5g capital expenditure of the three major operators is about 50%, with mobile accounting for 54.7%.

From the market point of view, the annual trend of the communications sector is greatly affected by domestic policies and Sino US trade frictions. In the first quarter, the central government deployed tasks related to “new infrastructure” for many times, and then set an important tone for the new infrastructure at the meeting of the Political Bureau of the CPC Central Committee. The communications industry rose against the trend. After the second quarter, the US Department of commerce further expanded the scope of entity list in mid May. With the continuous deterioration of the external environment, the communications industry began to decline since July. Since the third quarter, Huawei 5g products have been completely banned in the UK, and the US hardware sanctions against Huawei have come into effect. The industry has entered a stage of substantial downward adjustment.

On December 18, the U.S. Department of Commerce officially announced that a total of 77 entities were included in the “entity list” on the ground of “protecting U.S. national security”, including SMIC international, Dajiang, China shipbuilding group, etc. Take SMIC international as an example. After being listed in the list of entities, U.S. exporters must apply to the U.S. government for a license to continue to supply SMIC international. For the export of semiconductor products needed for the production of advanced process nodes (chips of 10 nm and below), the U.S. government will give priority to the “presumed refusal” policy, that is, not to approve the export license in principle.

Affected by the Sino US conflict and the trump government’s encirclement and interception, the communication index (Shenwan) fell by more than 30% from 2879.80 in July to 2008.49, the lowest point in the year. As of December 28, the communications sector as a whole fell by 12.39%, ranking the last in all 28 Shenyi industry indexes.

From the perspective of market sentiment, liquor, new energy and other fields are still hot, while the long-term earning effect of the communication sector is not good, which leads to more and more impatience of funds to continue to wait, and further leads to the continuous downturn of 5g communication sector in the early stage.

After half a year’s stock price correction, most of the stock prices of Companies in the plate are basically in the bottom range, so the possibility of capital flowing back to the plate is not ruled out.

Tianfeng Securities believes that 5g’s boom will continue in the next 2-3 years, in which the global growth logic of main equipment manufacturers is still strong, and the upstream of 5g hardware industry chain (PCB, filter, antenna, etc.) is characterized by strong periodicity, which may bear greater price reduction pressure in the future. Cloud computing and traffic are growing rapidly, and the Internet of things / Internet of vehicles / cloud video applications will open up more room for growth with the increase of penetration.

Editor in charge: Tzh

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