ZTE has won 25 5G commercial contracts to cooperate with more than 60 operators around the world-Shanghai Metals Market

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ZTE has won 25 5G commercial contracts to cooperate with more than 60 operators around the world

Translation 11:50:49AM Jun 25, 2019 Source:Gronghui

SMM News: ZTE News: recently, during the period of MWC19 Shanghai, ZTE announced that with the first batch of 5G commercial deployment in the world, ZTE has won 25 5G commercial contracts in the world, covering China, Europe, Asia-Pacific, Middle East and other major 5G markets, and carrying out 5G cooperation with more than 60 operators around the world, including China Mobile, China Telecom, China Unicom, Orange, Telefonica, Italy Wind Tre, Austria H3A, MTN, Indonesia Telkomsel and so on.

[industry research]

Investment Strategy of Communication Industry in the second half of 2019: 5G Wave has arrived

Abstract

In the first half of 2019, the communications industry experienced 4G expansion, the issuance of 5G licenses exceeded expectations, the boom continued to rise, and capital expenditure was facing an inflection point, but it also put pressure on the plate due to unjustified restrictions on Huawei in the United States. Looking forward to the second half of the year, we believe that compared with previous thematic emotions and other factors, orders and performance will be the first conditions for us to choose a good target, and the domestic supply chain is expected to rise. On the device side, it is suggested that attention should be paid to the main devices, RF filters, optical devices and other fields, and the application layer will blossom a hundred flowers. We suggest that we should pay attention to the Internet of things, IDC, cloud communications and other fields.

In the first half of 2019, the policy advantages continued to be good, and the communications sector performed better.

In the first half of 2019, the A-share market experienced a relatively rapid rise and subsequent adjustment. The Shenwan Communications Industry Index has risen 23.98% since the beginning of the year, beating the Shanghai Composite Index, the Shanghai and Shenzhen 300 Index and the gem Index. Judging from the valuation level, the communications industry has experienced a rapid rise so far at the beginning of the year, rising from 30 times at the beginning of the year (excluding negative values for historical TTM,) to 40 times at present, which is basically the same as the valuation level of the gem index, but still far higher than the valuation of Shanghai and Shenzhen 300s and all A-shares. In addition, 2019 is the first time that the capital expenditure of the three major operators has rebounded after three consecutive years of decline, totaling about 300 billion yuan. And the future is expected to usher in sustained growth, the industry economy is guaranteed, reasonable valuation, deterministic benefits of the variety will stand out.

5G license issued more than expected, investment in 5G main equipment at the right time

On June 6 this year, the Ministry of Industry and Information Technology officially issued a 5G business license to the three major operators, China Radio and Television, exceeding market expectations, and China officially entered the first year of 5G business. With the gradual maturity of 5G technology and the gradual landing of 5G investment in operators, the development of 5G will reach a new level. Before that, operators planned to invest about 322-34.2 billion yuan in 5G, and it is very likely that additional investment will be made in the follow-up. The main equipment has the highest certainty of benefit, so it is suggested to focus on it.

5G promotes the expansion and upgrading of load-bearing network, optical devices usher in new opportunities

5G construction, bearing first. We believe that with the rise of 5G network construction, it will promote the expansion and upgrading of load-bearing network, resulting in the demand for a large number of optical devices. Optical device suppliers have ushered in a rare opportunity for large-scale network updates and upgrades.

The Internet of things industry has been promoted in an all-round way, and the number of connections has increased more than expected.

At present, the three major operators have basically completed the construction of NB-IoT network. The number of Internet of things connections nearly doubled in the first half of 2019 and is expected to exceed expectations for the whole year. With Huawei, Ali and other giants taking the Internet of things as the core strategy, there may be a large number of innovative applications in the Internet of things industry in 2019.

Cloud computing market remains strong, focusing on infrastructure and cloud communications

Benefiting from the vigorous development of cloud computing, big data and other industries, the demand for upstream IDC, optical modules, network equipment and other infrastructure areas continues to be strong. The digital transformation of enterprises and the rise of mobile office and cross-regional office trend drive the transformation of enterprise communication forms to cloud and integrated communications.

1. In the first half of 2019, the policy advantages continued to be good, and the communications sector performed better.

2018 was an extraordinary year. Affected by the slowdown in macroeconomic growth, the A-share market has undergone a relatively large adjustment. In the first half of 2019, the Shanghai Stock Exchange index changed from last year's downturn in many ways. Due to 4G expansion and superimposed 5G license expectations, the industry mood and market sentiment in the communications industry were relatively good, up 23.98%. In the same period, the Shanghai Stock Exchange index rose 21.66%, and the Shanghai and Shenzhen 300 rose 23.66%. The gem rose 22.74%. In terms of industry, food and beverage, non-silver and other increases, the communications industry ranked ninth in all 28 industries.

From the valuation level, the communications industry has experienced rapid rise so far at the beginning of the year, rising from 30 times at the beginning of the year (historical TTM, excluding negative values) to 40 times, basically the same as the gem valuation level, but still far higher than the Shanghai and Shenzhen 300 valuation (10 times) and all A-share valuation (15 times), in the Shenwan level of industry in a higher position, only lower than the defense industry and computer plate, agriculture, forestry, animal husbandry and fishing.

Under the influence of the policy of "raising speed and reducing fees" and the saturation of user penetration, the growth of the three major domestic operators has been weak in recent years. The mobile subscribers of the three major operators have remained basically stable. In terms of wired broadband subscribers, China Mobile overtook China Telecom for the first time in September this year to become the largest fixed-line broadband operator in the country. In terms of users, China Mobile reached 906 million, an increase of 4.5 percent over the same period last year, of which 677 million were 4G users, an increase of 14 percent over the same period last year. China Unicom has 302 million subscribers, including 203 million 4G subscribers, a net increase of 28.23 million over the end of last year. China Telecom has 282 million mobile subscribers, including 217 million 4G subscribers, a net increase of 35.27 million over the end of last year.

In 2019, China Mobile's operating income was 185 billion yuan, down 0.3 percent from the same period last year; profit was 23.7 billion yuan, down 8.3 percent from the same period last year; China Telecom's operating income was 96.135 billion yuan, down 0.5 percent from the same period last year; and profit was 5.956 billion yuan, up 4.5 percent from the same period last year. China Unicom's main business revenue was 66.9 billion yuan, up 0.29 percent from the same period last year, and its net profit was 3.67 billion yuan, up 23.05 percent from the same period last year.

On the spending side, as 4G construction is gradually completed, the CAPEX of the three major operators has fallen year by year from 2016 to 2018 after reaching its investment peak in 2015. In 2019, China Mobile's capital expenditure was about 166.9 billion yuan, which was basically the same as the same period last year; China Telecom's capital expenditure was 78 billion yuan, an increase of 4.1 percent over the same period last year; and China Unicom's capital expenditure was 58 billion yuan, up 29 percent from a year earlier. In 2019, the capital expenditure of the three major operators after three consecutive years of decline, ushered in a rebound for the first time, and is expected to usher in sustained growth in the future.

Affected by the decline in capital expenditure of operators, the "ZTE event" and other factors, the total revenue and net profit of the communications industry as a whole (Shenwan) fluctuated greatly. Excluding ZTE and China Unicom, revenue and net profit growth for the entire sector were-1.62 per cent and 1078 per cent, respectively, in 2019.

To sum up, in the first half of 2019, the communications industry experienced 4G expansion and the issuance of 5G licenses that exceeded expectations. The boom continued to rise, and capital expenditure was facing an inflection point. However, due to unjustified restrictions on Huawei in the United States, the plate was under pressure. Looking forward to the second half of the year, we believe that compared with the previous thematic emotions and other factors, orders and performance will be the first conditions for us to choose a good target. At the same time, the domestic supply chain is expected to rise. On the device side, it is suggested that attention should be paid to the main devices, RF filters, optical devices and other fields, and the application layer will blossom a hundred flowers. We suggest that we should pay attention to the Internet of things, cloud communications and other fields.

Key Words:  5G 

ZTE has won 25 5G commercial contracts to cooperate with more than 60 operators around the world

Translation 11:50:49AM Jun 25, 2019 Source:Gronghui

SMM News: ZTE News: recently, during the period of MWC19 Shanghai, ZTE announced that with the first batch of 5G commercial deployment in the world, ZTE has won 25 5G commercial contracts in the world, covering China, Europe, Asia-Pacific, Middle East and other major 5G markets, and carrying out 5G cooperation with more than 60 operators around the world, including China Mobile, China Telecom, China Unicom, Orange, Telefonica, Italy Wind Tre, Austria H3A, MTN, Indonesia Telkomsel and so on.

[industry research]

Investment Strategy of Communication Industry in the second half of 2019: 5G Wave has arrived

Abstract

In the first half of 2019, the communications industry experienced 4G expansion, the issuance of 5G licenses exceeded expectations, the boom continued to rise, and capital expenditure was facing an inflection point, but it also put pressure on the plate due to unjustified restrictions on Huawei in the United States. Looking forward to the second half of the year, we believe that compared with previous thematic emotions and other factors, orders and performance will be the first conditions for us to choose a good target, and the domestic supply chain is expected to rise. On the device side, it is suggested that attention should be paid to the main devices, RF filters, optical devices and other fields, and the application layer will blossom a hundred flowers. We suggest that we should pay attention to the Internet of things, IDC, cloud communications and other fields.

In the first half of 2019, the policy advantages continued to be good, and the communications sector performed better.

In the first half of 2019, the A-share market experienced a relatively rapid rise and subsequent adjustment. The Shenwan Communications Industry Index has risen 23.98% since the beginning of the year, beating the Shanghai Composite Index, the Shanghai and Shenzhen 300 Index and the gem Index. Judging from the valuation level, the communications industry has experienced a rapid rise so far at the beginning of the year, rising from 30 times at the beginning of the year (excluding negative values for historical TTM,) to 40 times at present, which is basically the same as the valuation level of the gem index, but still far higher than the valuation of Shanghai and Shenzhen 300s and all A-shares. In addition, 2019 is the first time that the capital expenditure of the three major operators has rebounded after three consecutive years of decline, totaling about 300 billion yuan. And the future is expected to usher in sustained growth, the industry economy is guaranteed, reasonable valuation, deterministic benefits of the variety will stand out.

5G license issued more than expected, investment in 5G main equipment at the right time

On June 6 this year, the Ministry of Industry and Information Technology officially issued a 5G business license to the three major operators, China Radio and Television, exceeding market expectations, and China officially entered the first year of 5G business. With the gradual maturity of 5G technology and the gradual landing of 5G investment in operators, the development of 5G will reach a new level. Before that, operators planned to invest about 322-34.2 billion yuan in 5G, and it is very likely that additional investment will be made in the follow-up. The main equipment has the highest certainty of benefit, so it is suggested to focus on it.

5G promotes the expansion and upgrading of load-bearing network, optical devices usher in new opportunities

5G construction, bearing first. We believe that with the rise of 5G network construction, it will promote the expansion and upgrading of load-bearing network, resulting in the demand for a large number of optical devices. Optical device suppliers have ushered in a rare opportunity for large-scale network updates and upgrades.

The Internet of things industry has been promoted in an all-round way, and the number of connections has increased more than expected.

At present, the three major operators have basically completed the construction of NB-IoT network. The number of Internet of things connections nearly doubled in the first half of 2019 and is expected to exceed expectations for the whole year. With Huawei, Ali and other giants taking the Internet of things as the core strategy, there may be a large number of innovative applications in the Internet of things industry in 2019.

Cloud computing market remains strong, focusing on infrastructure and cloud communications

Benefiting from the vigorous development of cloud computing, big data and other industries, the demand for upstream IDC, optical modules, network equipment and other infrastructure areas continues to be strong. The digital transformation of enterprises and the rise of mobile office and cross-regional office trend drive the transformation of enterprise communication forms to cloud and integrated communications.

1. In the first half of 2019, the policy advantages continued to be good, and the communications sector performed better.

2018 was an extraordinary year. Affected by the slowdown in macroeconomic growth, the A-share market has undergone a relatively large adjustment. In the first half of 2019, the Shanghai Stock Exchange index changed from last year's downturn in many ways. Due to 4G expansion and superimposed 5G license expectations, the industry mood and market sentiment in the communications industry were relatively good, up 23.98%. In the same period, the Shanghai Stock Exchange index rose 21.66%, and the Shanghai and Shenzhen 300 rose 23.66%. The gem rose 22.74%. In terms of industry, food and beverage, non-silver and other increases, the communications industry ranked ninth in all 28 industries.

From the valuation level, the communications industry has experienced rapid rise so far at the beginning of the year, rising from 30 times at the beginning of the year (historical TTM, excluding negative values) to 40 times, basically the same as the gem valuation level, but still far higher than the Shanghai and Shenzhen 300 valuation (10 times) and all A-share valuation (15 times), in the Shenwan level of industry in a higher position, only lower than the defense industry and computer plate, agriculture, forestry, animal husbandry and fishing.

Under the influence of the policy of "raising speed and reducing fees" and the saturation of user penetration, the growth of the three major domestic operators has been weak in recent years. The mobile subscribers of the three major operators have remained basically stable. In terms of wired broadband subscribers, China Mobile overtook China Telecom for the first time in September this year to become the largest fixed-line broadband operator in the country. In terms of users, China Mobile reached 906 million, an increase of 4.5 percent over the same period last year, of which 677 million were 4G users, an increase of 14 percent over the same period last year. China Unicom has 302 million subscribers, including 203 million 4G subscribers, a net increase of 28.23 million over the end of last year. China Telecom has 282 million mobile subscribers, including 217 million 4G subscribers, a net increase of 35.27 million over the end of last year.

In 2019, China Mobile's operating income was 185 billion yuan, down 0.3 percent from the same period last year; profit was 23.7 billion yuan, down 8.3 percent from the same period last year; China Telecom's operating income was 96.135 billion yuan, down 0.5 percent from the same period last year; and profit was 5.956 billion yuan, up 4.5 percent from the same period last year. China Unicom's main business revenue was 66.9 billion yuan, up 0.29 percent from the same period last year, and its net profit was 3.67 billion yuan, up 23.05 percent from the same period last year.

On the spending side, as 4G construction is gradually completed, the CAPEX of the three major operators has fallen year by year from 2016 to 2018 after reaching its investment peak in 2015. In 2019, China Mobile's capital expenditure was about 166.9 billion yuan, which was basically the same as the same period last year; China Telecom's capital expenditure was 78 billion yuan, an increase of 4.1 percent over the same period last year; and China Unicom's capital expenditure was 58 billion yuan, up 29 percent from a year earlier. In 2019, the capital expenditure of the three major operators after three consecutive years of decline, ushered in a rebound for the first time, and is expected to usher in sustained growth in the future.

Affected by the decline in capital expenditure of operators, the "ZTE event" and other factors, the total revenue and net profit of the communications industry as a whole (Shenwan) fluctuated greatly. Excluding ZTE and China Unicom, revenue and net profit growth for the entire sector were-1.62 per cent and 1078 per cent, respectively, in 2019.

To sum up, in the first half of 2019, the communications industry experienced 4G expansion and the issuance of 5G licenses that exceeded expectations. The boom continued to rise, and capital expenditure was facing an inflection point. However, due to unjustified restrictions on Huawei in the United States, the plate was under pressure. Looking forward to the second half of the year, we believe that compared with the previous thematic emotions and other factors, orders and performance will be the first conditions for us to choose a good target. At the same time, the domestic supply chain is expected to rise. On the device side, it is suggested that attention should be paid to the main devices, RF filters, optical devices and other fields, and the application layer will blossom a hundred flowers. We suggest that we should pay attention to the Internet of things, cloud communications and other fields.

Key Words:  5G