(report producer: CICC Securities )
1. Industry review
1.1 Communications sector Profitability improved in 2021, and performed well in 2022Q1
Communications sector The overall revenue and net profit attributable to shareholders achieved a slight increase in 2021. In 2021, the A-share communications sector (HSW Communications Index component , the same below) achieved a total revenue of 2098.905 billion yuan, with increasing by by 3.67% year-on-year, and the total net profit attributable to shareholders was 148.811 billion yuan, a year-on-year increase of 1.39%. If 1 stock has a greater impact, (a total of 14 stocks with greater volatility caused by non-recurring gains and losses, see the notes, the same below), the total net profit attributable to shareholders was 131.268 billion yuan, an increase of 10.05% year-on-year (if China Mobile, which has a greater absolute net profit, it will increase by 32.6% year-on-year).
The performance of some individual stocks fell sharply, mainly due to impairment, bad debts, etc. For example, Zhongtian Technology 's net profit attributable to shareholders in 2021 decreased by 92.43% year-on-year, mainly due to the provisions for impairment of 3.619 billion yuan for risk assets of high-end communications business; Ruisconda lost 810 million yuan in 2021, mainly due to the company's 's provisions for expected credit impairment of accounts receivable and other receivables related to private network business, totaling 437 million yuan, and 415 million yuan for inventory impairment provisions.
Communications sector revenue performance has been improving since Q1 2021, and maintained a rapid growth momentum in all quarters of the year. The total revenue of the communications sector in 2021Q4 was 529.273 billion yuan, a year-on-year increase of 9.3%, and the total net profit attributable to shareholders was 23.579 billion yuan, and fell by 14.41% year-on-year. If stocks with a greater impact were excluded, the total net profit attributable to shareholders in 2021Q4 was 29.426 billion yuan, a year-on-year increase of 15.69%. The net profit performance of the communications sector was poor in 2021Q4, mainly affected by the large amount of business reputation impairment and asset impairment. The total revenue of the communications sector in Q1 2022 was 546.491 billion yuan, a year-on-year increase of 13.57%, and the net profit attributable to shareholders in Q1 2022 was 40.617 billion yuan, a year-on-year increase of 10.11%, and the profit situation improved.
According to the division of various sub-sectors of the communications industry by CICC , the top three sub-sectors with year-on-year revenue growth in 2021 are: Internet of Things (43.827 billion yuan, a year-on-year increase of 43.04%), communication supporting services (27.501 billion yuan, a year-on-year increase of 18.49%), and IDC (26.736 billion yuan, a year-on-year increase of 16.69%). The last three sub-sectors in 2021 are: communication value-added services (42.362 billion yuan, a year-on-year increase of 4.30%), smart cards (5.937 billion yuan, a year-on-year increase of 3.34%), and dedicated network equipment (23.332 billion yuan, a year-on-year decrease of 25.85%). Among the sub-sectors of
Communications, the outstanding net profit attributable to shareholders in 2021 included: the Internet of Things sector, from a loss of 920 million yuan in 2020 to a profit of 2.594 billion yuan in 2021, Beidou (1.029 billion yuan, a year-on-year increase of 3389.65%, mainly due to the large asset impairment provisions of Hezhong Sizhuang in 2020), optical modules (2.845 billion yuan, a year-on-year increase of 36.72%), and communication network equipment (9.855 billion yuan, a year-on-year increase of 28.37%). The three sub-sectors that lost money in 2021 are: communication supporting services (-140 million yuan, with a decrease in losses), communication value-added services (-2.493 billion yuan, profit to loss), and dedicated network equipment (-8.53 billion yuan, profit to loss). In addition, in the cable industry, the price of fiber optic cable continued to decline year-on-year in 2021, coupled with the impairment of Zhongtian Technology, the performance was average.
2022Q1 The top three sub-sectors with year-on-year revenue growth rate are: Internet of Things (9.894 billion yuan, a year-on-year increase of 24.61%), optical modules (5.921 billion yuan, a year-on-year increase of 14.83%), and communication supporting services (5.677 billion yuan, a year-on-year increase of 13.10%). The last three digits of revenue growth in Q1 2022 are: private network equipment (4.05 billion yuan, a year-on-year decrease of 29.37%), Beidou (3.181 billion yuan, a year-on-year increase of 0.72%), and communication value-added services (10.555 billion yuan, a year-on-year increase of 3.30%).
2022Q1, the sectors with outstanding net profit attributable to shareholders' net profits attributable to shareholders include: smart card (59 million yuan, a year-on-year increase of 200.49%), Beidou (331 million yuan, a year-on-year increase of 171.59%), cable (1.69 billion yuan, a year-on-year increase of 80.38%), communication value-added services (914 million yuan, a year-on-year increase of 39.89%), and communication supporting services (115 million yuan, a year-on-year increase of 23.43%).The last three digits of the year-on-year growth rate of net profit attributable to shareholders in 2022Q1 are: private network equipment (-92 million yuan, a year-on-year decrease of 199.30%), Internet of Things (185 million yuan, a year-on-year decrease of 42.67%), and optical modules (551 million yuan, a year-on-year decrease of 1.11%).
1.2 Telecom operators' operations are improving in general, and capital expenditure focuses on computing power network investment
2021, the operating income of the three major operators (to ensure data continuity, select Hong Kong stock report data, the same below) has improved in general, and the year-on-year growth rate of total operating income and communication service revenue has hit new highs in recent years, and the growth rate of net profit has improved year-on-year. We believe that the main benefits are: First, in the context of the decline in fee reduction pressure on policy end, the tendency of competition among operators to rationalize, and the commercialization of 5G, the mobile APPUs of the three major operators achieved year-on-year growth in 2021; Second, operators have focused on the "three gigabit" business, and the home broadband business is no longer limited to providing only Internet broadband, but creates a smart home service system including whole-house intelligence, high-definition video, and security. The family business income of the three major operators has grown rapidly; Third, under the wave of the development of digital economy , operators seized the opportunity to help enterprises complete the digital transformation of , and achieve rapid growth in government and enterprise market revenue, especially cloud computing, IDC, and Internet of Things businesses.
In 2021, the total revenue of the three major operators was 1615.7 billion yuan, a year-on-year increase of 10.25%, of which China Mobile achieved revenue of 848.3 billion yuan, a year-on-year increase of 10.44%, China Telecom achieved revenue of 439.6 billion yuan, a year-on-year increase of 11.69%, China Unicom achieved revenue of 327.9 billion yuan, a year-on-year increase of 7.90%. The revenue growth rate of the three major operators hit new highs in recent years. In terms of net profit attributable to shareholders, the total net profit attributable to shareholders of the three major operators in 2021 was 156.5 billion yuan, a year-on-year increase of 10.82%. Among them, China Mobile had RMB 116.1 billion, a year-on-year increase of 7.70%; China Telecom had RMB 25.9 billion, a year-on-year increase of 24.45% (comparable profit increased by 17.7%); China Unicom had RMB 14.4 billion, a year-on-year increase of 15.01%. With the background of declining pressure on fee reduction, more rational competition, and 5G scale commercial use, operators' profitability continues to improve.
2022Q1 The three major operators achieved a total revenue of 436 billion yuan, a year-on-year increase of 12.49%. Among them, China Mobile achieved revenue of 227.3 billion yuan, a year-on-year increase of 14.6%; China Telecom achieved revenue of 119.6 billion yuan, a year-on-year increase of 11.9%; China Unicom achieved revenue of 89 billion yuan, a year-on-year increase of 8.2%. In 2022Q1, the three major operators achieved a total net profit attributable to shareholders of RMB 37.5 billion, an increase of 8.94% year-on-year. Among them, China Mobile's net profit attributable to shareholders was 25.6 billion yuan, a year-on-year increase of 6.5%; China Telecom's net profit attributable to shareholders was 7.2 billion yuan, a year-on-year increase of 12.1%; China Unicom's net profit attributable to shareholders was 4.6 billion yuan, a year-on-year increase of 20.6%. Among them, China Mobile's revenue growth rate is faster than its profit growth rate, mainly because the
2022 The capital expenditure of the three major operators increased slightly, 5G capital expenditure decreased, and computing power network capital expenditure increased. In 2021, the three major operators had a total capital expenditure of 339.3 billion yuan, an increase of 1.9% year-on-year. In 2022, China Mobile expects capital expenditure to be 185.2 billion yuan, a year-on-year increase of 0.9%, and China Telecom expects capital expenditure to be 93 billion yuan, a year-on-year increase of 7.2%. Assuming that China Unicom's capital expenditure in 2022 is 7%, the capital expenditure of the three major operators in 2022 will be approximately 352 billion yuan, a year-on-year increase of about 3.7%. Capital expenditure overall shows a slight growth trend, but investment direction has been focused. 2022 is the last year of large-scale 5G construction, and 5G capital expenditure is expected to continue to decline in the future. In 2022, China Mobile expects 5G capital expenditure to be approximately 110 billion yuan, a year-on-year decrease of 3.5%, and China Telecom expects 5G network investment to be approximately 34 billion yuan, a year-on-year decrease of 10.5%. In the context of the development of the digital economy, operators focus on computing power network investment.In 2022, China Mobile will invest 48 billion yuan in computing power network, and is expected to put into production of about 450,000 IDC racks available to the outside world (about 43,000 new ones, slightly lower than the 47,000 new ones in 2021), and over 660,000 cloud server (about 180,000 new ones); in 2022, China Telecom's investment in industry digitalization is expected to be 27.9 billion yuan, a year-on-year increase of 62%, involving IDC-related capital expenditure of 6.5 billion yuan (about 45,000 racks added, slightly lower than the 50,000 racks added in 2021, reflecting that the company's current slow launch speed in the IDC industry, IDC construction is targeted), and the computing power network investment is about 14 billion yuan (about 14 billion yuan) (about 45,000 racks added, slightly lower than the increase of about 50,000 racks in 2021, reflecting that the company's current slow launch speed in the IDC industry, IDC construction is targeted), and the computing power network investment is about 14 billion yuan (about 10,000 racks added). 160,000 cloud server). We believe that in the digital economy era, computing power will become the most important infrastructure, and the core of computing power network lies in cloud computing. Operators increase related investment will help better development in the future.
1.3 The communications industry index rebounded after the market fluctuated and downward. Industry dynamics PE is at the historical bottom
2022 The communications industry index has fluctuated and downward since 2022, and has rebounded recently, and the valuation is still at the bottom. On January 12, 2022, the State Council issued the "14th Five-Year Plan for Digital Economy Development". As the infrastructure of the digital economy, the communications industry has increased its market attention and the index has increased slightly. However, since March, due to the outbreak of the Russian-Ukrainian conflict, the Federal Reserve's interest rate hike , and the outbreak of the Shanghai epidemic, market sentiment has been relatively pessimistic, and the communications index has continued to decline. On April 26, 2022, the communications industry index (Shenwan, the same below) fell to 1,597 points, and PE-TTM fell to 25.93 times, the lowest point from the beginning of the year to date. Since May, as the epidemic in Shanghai has gradually been controlled, market sentiment has recovered, and the index has rebounded. As of May 30, 2022, the communications industry index closed at 1778 points, down 18.4% from the beginning of the year and up 11.3% from the previous low. The communications industry PE-TTM is 28.25, at the 1.17% digit of the ten-year 1.3% digit of the five-year 2.34% digit of the five-year 2.
2022 The valuation of cables, communication network equipment, smart controllers and other sectors is relatively low. The sector valuation is calculated based on Wind's consistent forecast of 2022 profits. If there is no consensus expectation, if the profit in 2021 is positive, the assumption is the same as in 2021, otherwise the assumption is the same as in 2020 (the net profit attributable to the parent in 2020 is positive) or the same as in 2019 (the net profit attributable to the parent in 2020 is negative). Overall, the sectors with lower valuations in 2022 are cables (14X), communication network equipment (15X), and smart controllers (16X), while the sectors with higher valuations are communication supporting services (350X), and smart cards (108X).
2021Q4, public fund communications industry holdings market value 83.644 billion yuan, accounting for 1.31%, an increase of 0.50pct from 2021Q3 (it is expected to be mainly related to China Telecom reply A). The market value of the public fund communications industry held in Q1 2022 was 44.743 billion yuan (quarterly data was incompletely released), accounting for 1.31%, and remained on the same month-on-month basis as . In terms of northbound funds holdings, as of May 30, 2022, the market value of the northbound funds communications industry in 2021Q4 was 19.174 billion yuan, accounting for 0.70%, an increase of 0.20pct from 2021Q3; the market value of the northbound funds communications industry in 2022Q1 was 14.719 billion yuan, accounting for 0.65%, a decrease of 0.05pct from the previous month.
2022Q1. The top ten stocks in the market value of public funds in the communications industry are: Zhongtian Technology,
2. Market Outlook
Outlook In the second half of 2022, with the ease of the epidemic and the development of the digital economy, the market's investment expectations for the technology industry are expected to return to the right track. The international situation is complex and changeable, and the domestic epidemic is still repeated. These will inevitably affect the performance of listed companies, especially in 2022Q2, which in turn affects market investment sentiment.But if we look at the cycle, the current investment opportunities should be greater than the investment risk of , and especially the valuations of many companies with excellent operating performance in the past are already at the bottom of the history. If we simply look at the " base effect ", this year's lows are likely to be exchanged for next year's high growth, which is also worth looking forward to. As of May 30, 2022, the communications industry's PE-TTM was 28.25, at the 1.17% digit of ten years and 2.34% digit of five years.
Digital economy will be the main line of development of the technology industry. At the beginning of 2022, the "14th Five-Year Plan for Digital Economy Development" was issued, laying the main tone for the development of my country's digital economy. We believe that the digital economy has rich connotations, and its core lies in digital industrialization and industrial digitalization. The former emphasizes the growth and strength of the technology industry, while the latter attaches importance to technology empowering all walks of life and realizing the digital transformation and upgrading of traditional industries. In the development of the digital economy, we believe that the focus of digital industrialization should focus on the Internet of Things and cloud computing. The Internet of Things industry is still maintaining a high prosperity, and the high-versatility of IoT communication modules companies are still worthy of attention. As the core computing power infrastructure of the digital economy, cloud computing will not change the medium- and long-term development trend in the short term. Among them, although the IDC industry is slow to be launched in the short term, it is expected to achieve green and low-carbon sustainable development in the future with the recovery of demand for cloud computing and guided by the "East and West Computing" policy; with the improvement of the competitive landscape of ICT equipment manufacturers, major manufacturers are achieving the dual improvement of market share and profitability; optical module manufacturers are fully benefiting against the background of continued growth of North American cloud manufacturers' capital support, and at the same time, the upstream of the optical module industry chain and vehicle-mounted lidar are reusable, which will further open up space for growth. Industrial Internet , as the carrier of , the integration of , will enter a period of rapid development. The penetration rate of industrial Internet platforms will increase rapidly during the 14th Five-Year Plan period, and more support policies are expected to be implemented in the future. As a typical application of enterprise digital transformation, the implementation model is relatively simple. In the context of the epidemic changing the office model, market demand is expected to continue to be released.
3. Investment analysis
3.1 The cellular Internet of Things maintains a high prosperity, paying attention to key scenarios such as cars, FWA, PC, and
3.1.1 The cellular module market maintains a high prosperity, and the market share is concentrated in the leading Chinese manufacturers
chip shortage affects the development of the Internet of Things in 2021 and is expected to accelerate in 2022. According to IoT Analytics data, the number of global Internet of Things connections reached 12.2 billion in 2021, an increase of 8% year-on-year, and the growth rate declined, mainly affected by the chip shortage. In 2022, chip shortage is expected to continue, and the COVID-19 epidemic, supply chain chaos, inflation and other factors will also have adverse effects, but the growth rate of the Internet of Things industry is still expected to be restored. IoT Analytics expects that the number of global Internet of Things connections will increase to 14.4 billion in 2022, an increase of 18% year-on-year. With the gradual easing of various adverse factors, the industry is expected to accelerate further from 2023 to 2025, and the number of Internet of Things connections is expected to reach 27 billion by 2025. According to the communication system, 5G, LPWAN, WLAN will maintain a high growth rate.
cellular communication module market maintains a high prosperity, 5G modules will become the main driving force, and SoC intelligent modules will flourish. According to Counterpoint data, the global shipment of cellular communication modules reached 421 million pieces in 2021, a year-on-year increase of 59%, and the shipment amount increased by 57% year-on-year. Counterpoint expects global cellular communication module shipments to exceed 1.2 billion pieces in 2030, with a CAGR 12%. According to the rules, the shipment of 5G modules in 2028 will exceed 4G, and the cumulative shipment of 5G modules will reach 2.5 billion pieces from 2022 to 2030. In addition, NB-IoT and 4G Cat1 bis will also maintain a high growth rate. With the vigorous development of AI, the SoC intelligent modules that further provide intelligent operating system capabilities and AI computing power on the basis of cellular connections have shown an improvement in the penetration rate of in the overall module industry, such as new retail, financial payment, intelligent connected vehicles and other fields. By application scenario, the top five major areas of shipment volume in 2030 are smart meter (LPWA), industrial (5G), router/CPE (5G), automobile (5G), POS machines (4G Cat1 bis and 5G RedCap).
China's cellular Internet of Things connections has accelerated. According to data from the Ministry of Industry and Information Technology, as of the end of 2021, China Mobile, China Telecom and China Unicom have developed a total of 1.399 billion cellular IoT terminal users, a net increase of 264 million from the end of 2020, exceeding the double the net increase in the number of users (108 million) in 2020. Among them, the proportion of end users used in smart public utilities, intelligent manufacturing and smart transportation reached 22.4%, 18.1%, and 15.6% respectively. As of the end of April this year, the three major operators had 1.558 billion IoT terminal users, a net increase of 159 million from the end of 2021, and a net increase of 59% year-on-year.
cellular communication module pattern "goes east and falls west", and its market share is concentrated in Chinese manufacturers. According to TSR data, the top three global cellular communication module shipments in 2021 are Yiyuan Communications (39%), Guanghetong (including Ruiling, 11%), and Rihai Intelligent (9%), all of which are Chinese companies. Counterpoint expects that as 5G gradually matures, leading suppliers such as Yiyuan Communications, Guanghetong, Meige Intelligence, Foxconn , etc. will further enhance their market position, and long-tail suppliers will have many difficulties in terms of scale and partners. (Report source: Future Think Tank)
3.1.2 The penetration rate of front-installation of the Internet of Vehicles continues to increase, and the leading position of Guanghetong and Yiyuan Communications is stable and the transmittance of automobile intelligence and networking continues to increase. In terms of networking, according to data from Gaogong Intelligence, the load capacity of new vehicles in the domestic market in 2021 was 12.65 million vehicles, a year-on-year increase of 32%, and the load rate reached 62%, an increase of 15pp year-on-year. Since 2020, some new cars have begun to be equipped with 5G communication modules. It is expected that the 4G capacity will continue to increase gradually in the next three years, and 5G capacity will enter a period of rapid growth. Some domestic independent brand OEMs are the first to adopt 5G SoC modules, such as BYD , to achieve higher integration and lower costs. In addition, a few high-end models equipped with V2X have been launched, such as the Hongqi E-HS9, Buick GL8 Avenir, etc. In terms of intelligence, according to data from Gaogong Intelligence, the number of new L2-class ADAS vehicles will be equipped with insurance to 3.96 million vehicles by 2021, an increase of 78% year-on-year, and a loading rate of 19%, an increase of 7pp year-on-year.
network penetration rate is improved and product upgrades are superimposed, and the in-vehicle communication module market is expected to maintain high growth. We expect that the market size of China's pre-installed cellular communication modules will be approximately 3.4 billion yuan in 2021, with a CAGR of 45% in the next four years. The global market size of the pre-installed cellular communication modules will be approximately 9.8 billion yuan in 2021, with a CAGR of 33% in the next four years. Starting from 2022, 5G and 5G SoCs will be the main drivers of the growth of the in-vehicle cellular communications market.
Guanghetong and Yiyuan Communications are the global and domestic front-mounted market leaders, respectively, and Meige Intelligent Vehicle SoC module layout is leading. According to Counterpoint data, the top three suppliers of the global front-mounted vehicle communication module market in 2021Q3 are Ruiling Wireless, LG, and Continental, with revenue shares of 29.9%, 21.8%, and 12.3%, respectively, totaling 64%. According to Gaogong Intelligence data, the top three suppliers of China's pre-installed vehicle communication module market in 2020H1 are Yiyuan Communications, Huihan Microelectronics, and Sierra Wireless. The shipment shares of the three are 35.99%, 17.53%, and 17.04%, respectively, totaling 70.56%. Meige Intelligent's YUV Camera custom development technology based on the 5G SOC chip platform is exclusively developed and applied in the field of intelligent connected vehicles.
3.1.3 FWA demand is improving, and the competitive landscape is reshaping
FWA is expected to become the fastest commercial 5G application outside of mobile phones. Fixed Wireless Access refers to the connection that provides broadband access through a customer premise equipment (CPE) that supports mobile networks, including client devices indoors (desktops and windows) and outdoors (roof and wall-mounted). CPE is expected to become the fastest commercial 5G terminal outside of mobile phones and to form a large scale. According to Ericsson data, by the end of 2021, FWA data traffic will account for more than 15% of the global mobile network data traffic, and it is expected that by 2027, this number will grow nearly 6 times to 82EB, accounting for more than 20% of the global mobile network data traffic.
Overseas CPE shipments have maintained rapid growth, and epidemic catalysis and 5G promotion are the main driving forces.According to the survey data of 25 equipment suppliers based on the 3GPP FWA CPE ecosystem, the global 4G/5G FWA CPE shipments in 2020 were 22.9 million units, an increase of 18% year-on-year. It is expected that the growth rate in 2021 will accelerate to 31%. Remote office and distance education may be catalytic factors during the epidemic. The launch of 5G services by overseas operators is expected to become the driving force for the continued growth of the FWA market. According to GSA data, as of December 2021, there were 446 operators providing 4G/5G FWA services worldwide, accounting for more than half of the total 4G/5G operators. Among them, there are 81 operators that provide 5G FWA services. Verzion added 194,000 FWA users in Q1, increased by 148% month-on-month and 10.4 times year-on-year. It is expected that FWA is expected to cover 50 million households and enterprises by the end of 2025.
3.1.4 The laptop cellular module is expected to increase in both quantity and price, and the demand for high-end business laptops is stable. The configuration rate of the pencil continues to increase. The communication standard is upgraded to
Post-epidemic cycle, education and consumer laptop shipments may decline in the short term, high-end business laptop demand is stable, and laptop cellular module demand is good. According to Trendforce data, 246 million laptops were shipped worldwide in 2021 (including Chromebook), a year-on-year increase of 19.4%, a high increase for the second consecutive year, mainly benefiting from the demand for online education and remote work during the epidemic. As the global vaccination rate continues to increase, overseas companies return to their offices, the laptop market has slowed down since 2021Q3, and the growth pressure in 2022 is relatively high. Coupled with the impact of the Russian-Ukrainian war, inflation, domestic epidemic, etc., major laptop manufacturers have recently lowered their annual shipment expectations, reaching 10%-15%. Trendforce recently lowered its annual laptop shipment expectations to 225 million units, a year-on-year decrease of 8.5%. In January 2022, it gave an expected 238 million units, a year-on-year decrease of 3.3%. By product, demand for education and consumer laptops has slowed down significantly, with 2021H2 Chromebook shipments down 50% year-on-year, and it is expected that the decline in 2022 will still exceed 50% (Trendforce data), but such laptops are rarely equipped with cellular communication modules. The business laptop market has grown relatively stable in the past two years. Research by IDC, Gartner and other institutions show that the demand for business laptops remains stable from 2021Q4 to 2022Q1. The market is worried that the downward prosperity of the laptop market will have a major impact on Guanghetong's laptop business. We believe that it is a bit overly pessimistic and there is a gap in expectations.
3.2 Investment in cloud infrastructure continues. It is recommended to pay attention to ICT equipment, optical modules/optical devices
3.2.1 The general trend of cloud computing development. Forecast data guides the industry to gradually recover
IT. Cloud access is the general trend. Cloud computing adopts virtualization technology to greatly improve the utilization rate of servers and storage, and has the advantages of flexible configuration, on-demand services, low prices, and simple operation and maintenance. Cloud computing reduces costs and increases efficiency significantly. According to the cloud computing development survey report of China Institute of Information and Communications Technology , 95% of enterprises believe that using cloud computing can reduce the IT costs of enterprises, and more than 10% of users believe that the cost savings are more than half. In addition, more than 40% of enterprises said that using cloud computing has improved IT operation efficiency, with the reduction in IT operation and maintenance workload and the increase in security respectively 25.8% and 24.2% respectively.
Global cloud infrastructure expenditure accounts for the proportion of enterprise IT infrastructure expenditures continue to increase. The COVID-19 pandemic has caused major adjustments in business, education and social activities and has affected the IT infrastructure structure. According to IDC data, global cloud infrastructure spending was US$73.9 billion in 2021, an increase of 8.8% year-on-year, and is expected to reach US$133.7 billion by 2026, with an annual compound growth rate of 12.6%.Among them, public cloud infrastructure accounts for 72% of the total cloud infrastructure, with an annual compound growth rate of 13.4%, private cloud accounts for 28%, and an annual compound growth rate of 10.7%. Spending on traditional IT infrastructure will have a CAGR of 0.5% to reach USD 61.2 billion by 2026. It is estimated that in 2022, global cloud infrastructure expenditure will reach 90 billion yuan, a year-on-year increase of 21.7%, of which public cloud infrastructure expenditure will increase by 25.5% year-on-year, private cloud expenditure will increase by 13.1% year-on-year, and traditional IT infrastructure expenditure will decrease by 0.3% year-on-year.
Large data center operators and enterprises have strong demand, and server demand is expected to gradually improve. Intel has made business structure adjustments in 2022Q1 and announced a business unit (DCAI) called Data Center and Artificial Intelligence , which includes services such as chips, accelerators, memory and field programmable gate arrays (FPGAs). In Q1 2022, the DCAI sector achieved operating income of US$6.03 billion, a year-on-year increase of 22%, and shipments increased by 28% year-on-year, mainly due to strong demand from large data center operators and enterprises. Since August 2021, Xinhua Technology has always maintained a high monthly revenue level with a high base in 2020, with a year-on-year growth rate of more than 30%, and has maintained a high growth rate from January to April 2022, with monthly growth rates exceeding 46%. In April 2022, revenue increased by 55.43% year-on-year, indicating that the downstream server industry has good demand and is expected to maintain a high prosperity in the next few quarters.
North American cloud vendor business growth. In Q1 2022, Amazon, Google, Microsoft and Meta (formerly Facebook) had a total revenue of US$261.723 billion, a year-on-year increase of 12.95%; in Q1 2022, the total capital expenditure of the four companies was US$35.392 billion, a year-on-year increase of 29.24%.
2022Q1, the capital expenditure of four cloud manufacturers in North America all achieved year-on-year growth. Since Amazon's year-on-year growth rate bottomed in Q4 2018, it has generally increased quarter by quarter. Since Q1 2021, the growth rate has declined due to base reasons. Capital expenditure in Q1 2022 increased by 23.75% year-on-year to US$14.951 billion, still maintaining a relatively high level, accounting for 42.24% of the total capital expenditure of the four companies. We believe that this is related to the rapid development of AWS. In Q1 2022, AWS revenue was US$18.441 billion, a year-on-year increase of 36.57% and a month-on-month increase of 3.72%, a record high. Microsoft's cloud business revenue in Q1 2022 was US$19.051 billion, a year-on-year increase of 26.02%, a month-on-month increase of 3.95%, and capital expenditure in Q1 2022 was US$5.34 billion, a year-on-year increase of 4.93%. Google's cloud business revenue in Q1 2022 was US$5.821 billion, a year-on-year increase of 43.83%, a month-on-month increase of 5.05%, and capital expenditure in Q1 2022 was RMB9.786 billion, a year-on-year increase of 64.69%. Meta's revenue in 2022Q1 was US$27.908 billion, a year-on-year increase of 6.64%, a month-on-month decrease of 17.12%, and capital expenditure in 2022Q1 was US$5.315 billion, a year-on-year increase of 24.41%.
China's cloud computing development level still has a big gap compared with the world, and there is a lot of room for improvement. According to Gartner and IDC statistics, the global public cloud market size accounted for 7.78% of global IT spending in 2021, and the domestic public cloud market penetration rate was 5.61%, which still widened the gap compared with the global level. Compared with leading cloud manufacturers in China and the United States, Alibaba Cloud's revenue in 2021 was 72.4 billion yuan, while AWS revenue was US$62.2 billion in the same period, and Alibaba Cloud's revenue was only about one-fifth of AWS; in terms of market share, AWS's global cloud computing IaaS market share in 2021 was 38.92%, Alibaba Cloud's market share was only 9.55%, and Alibaba Cloud's market share was only about one-quarter of AWS. The United States and China are the two poles of global IT and the Internet. Although China's cloud computing started later than the United States, it has developed faster and has an IT and Internet environment of comparable size as the United States. China is expected to become the second pole of global cloud computing development.
2021 China's public cloud market still achieves rapid growth, and is expected to maintain a compound growth rate of 31% in the next five years. According to IDC data, the size of China's public cloud market in 2021 was US$27.44 billion, a year-on-year increase of 41.59%. Among them, the IaaS market size was US$17.1 billion, a year-on-year increase of 40.1%, the PaaS market size was US$4.14 billion, a year-on-year increase of 55.7%, and the SaaS market size was US$6.28 billion. According to IDC's forecast, the compound growth rate of China's public cloud market in the next five years will be 30.9%, and the market size is expected to reach US$105.76 billion in 2026, and the global share will increase from 6.7% in 2021 to 9.9%.
2021 The year-on-year growth rate of Alibaba Cloud's business revenue was about 30%, lower than the overall market growth rate. Judging from the market share of 2021H2, Alibaba Cloud's market share is 36.7%, Tencent Cloud and Huawei Cloud's market share are both about 11%, and Tianyi Cloud's market share is 8.9%. In the second half of 2018, Alibaba Cloud's market share was 42.7%, Tencent Cloud's 11.8%, Tianyi Cloud's 7.5%, and Huawei Cloud's just started. At the same time, ByteDance began to fully enter the cloud computing market. We believe that as enterprises such as telecom operators, Huawei, ByteDance and other companies increase their investment in cloud services, the growth rate and investment of traditional Internet leading manufacturers' cloud services cannot fully represent the overall situation of the industry, and the market structure has begun to undergo subtle changes.
2021 The cloud computing services of the three major telecom operators have achieved rapid growth in 2021, and will continue to increase investment in the future. In 2021, China Telecom's "Tianyi Cloud" achieved revenue of 27.9 billion yuan, a year-on-year increase of 102%, and the industry cloud achieved revenue of 21.3 billion yuan, a year-on-year increase of 90.9%, ranking fourth in the domestic market share of public cloud IaaS+PaaS. China Mobile's "Mobile Cloud" achieved revenue of 24.2 billion yuan, a year-on-year increase of 114%, of which the industry's cloud revenue was 19.2 billion yuan, a year-on-year increase of 109.6%. The public cloud ranking ranked among the top seven in the industry and the government cloud ranking third. China Unicom's "Unicom Cloud" revenue was 16.3 billion yuan, a year-on-year increase of 46.3%. In terms of IDC business, China Telecom and China Mobile's IDC businesses achieved revenue of 31.6 billion yuan and 21.6 billion yuan in 2021, a year-on-year increase of 13% and 33%.
Under the background of the policy of east-west computing, operators focus on computing power network investment. In 2022, China Mobile will invest 48 billion yuan in computing power network, and is expected to put into production of about 450,000 IDC racks available to the outside world (about 43,000 new ones, slightly lower than the 47,000 new ones in 2021), and cumulatively put into production of more than 660,000 cloud servers (about 180,000 new ones); China Telecom's investment in industry digitalization in 2022 is expected to be 27.9 billion yuan, a year-on-year increase of 62%, involving IDC-related capital expenditure of 6.5 billion yuan (about 45,000 racks added, slightly lower than the 50,000 racks added in 2021, reflecting that the company's current slow launch speed in the IDC industry, IDC construction is targeted), and the computing power network investment is about 14 billion yuan (about 16). Wanyun Server). We believe that in the digital economy era, computing power will become the most important infrastructure, and the core of computing power network lies in cloud computing. Operators increase related investment will help better development in the future. (Report source: Future Think Tank)
3.2.2 The competitive landscape of the ICT industry has improved, and its profitability is expected to improve
According to the financial report of 2022Q1, the performance of many ICT equipment companies has achieved good growth. At the same time, thanks to the improvement of the competitive environment and the company's internal cost reduction and efficiency improvement, the gross profit margin has also increased significantly. Among them, Unigroup achieved revenue of 15.342 billion yuan, a year-on-year increase of 13.58%, and a net profit attributable to shareholders of 372 million yuan, a year-on-year increase of 35.26%, and a gross profit margin of 21.93%, an increase of 358pct; Starnet Ruijie achieved revenue of 2.95 billion yuan, a year-on-year increase of 53.72%, and a net profit attributable to shareholders of 120 million yuan, a year-on-year increase of 202.88%, a year-on-year increase of 34.2%, an increase of 0.99pct; ZTE achieved revenue of 27.93 billion yuan, a year-on-year increase of 6.43%, and a net profit attributable to shareholders of 1.952 billion yuan, a year-on-year increase of 117.13%, and a gross profit margin of 37.78%, an increase of 2.34pct. Huawei's share is gradually declining, and the share of Unigroup and Starnet Ruijie has increased significantly. In 2021, Huawei divested its X86 server business, so its server market share declined significantly, from 19% in 2020 to 6.6%. Unigroup Co., Ltd.'s market share has increased significantly, from 14.8% to 17.5%. In the switch market, Huawei's market share has also declined, from 38.5% in 2020 to 36.5%. Starnet Ruijie's market share has increased significantly, from 11.7% in 2020 to 14%. Domestic ICT equipment manufacturers have relatively close strength in server and switch products with Huawei, and their share has room for improvement. At the same time, the competitive landscape has improved and their profitability has been further improved. The technical threshold and gross profit margin of
router products are relatively high, and Huawei still occupies a high market share.Although Huawei's market share fell from 79.7% in 2020 to 77.2% in 2021, it is still in an absolute leading position. Unigroup and ZTE ranked second and third with shares of 9.6% and 5.9% respectively. High-end router products have high technical thresholds and high gross profit margins. With the decline in Huawei's chip reserves and the continuous breakthroughs of other domestic manufacturers, the competitive landscape is expected to be reshaped. The gross profit margin of WLAN products is relatively high, and Huawei's market share has increased to a certain extent. In the domestic WLAN market in 2021, H3H3, Huawei and Starnet Ruijie ranked the top three with market shares of 28.4%, 27.2% and 21.9% respectively.
wireless access base stations and wired SPN equipment are Huawei's strategic core products, and the gross profit margin level is relatively high. In 2021, the market share of Huawei 5G base stations increased from 56% in 2020 to 60% (of which the dynamic share in the Telecom Unicom bid was calculated as median). Although Ericsson benefits from Huawei's restriction by the United States and has significantly increased its overseas market share, its domestic market share has dropped significantly. ZTE's market share increased from 31% in 2020 to 33% in 2021. In terms of SPN equipment, ZTE's market share has increased to a certain extent.
3.2.3 The optical device industry benefits from the high prosperity of the Digital Communication market. New applications such as lidar have opened up market space
2022Q1. The capital expenditure of four cloud manufacturers in North America increased by 29.7% year-on-year, reflecting that the investment in North America's cloud computing still maintains a high prosperity. Meta expects capital expenditure to be between US$29-34 billion in 2022, a year-on-year increase of 63.72% in median; Amazon said it is investing in expanding global AWS data centers to match the rapid growth of its cloud business. Domestic operators' cloud revenue has maintained rapid growth, and in order to cope with the ever-increasing demand, operators' cloud-related capital expenditures have increased significantly. In 2022, China's telecom industry digital investment is expected to reach 27.9 billion yuan, a year-on-year increase of 61.7%.
high-speed digital optical module market shows a high prosperity. The 200G optical module R&D design and industrial chain are highly mature, and demand will remain strong in the next two years, but there are many manufacturers participating in the market, and competition may become increasingly fierce. As the 400G optical module enters the third year after mass production, demand remains high in prosperity and price declines remain at normal levels. The 800G optical module has passed the R&D window in 2021, and many optical module manufacturers have successively owned the R&D capabilities of a number of 800G optical modules. Looking ahead to 2022, 800G optical modules will usher in their first year of mass shipment. According to LightCounting's forecast data, the demand for 800G optical modules by the top five cloud manufacturers is expected to reach around US$180 million in 2022 and US$1.6 billion by 2025, an increase of more than 7 times.
2022Q1, the performance of major optical modules and optical device manufacturers at home and abroad shows a positive trend, and domestic manufacturers' business performance has achieved rapid growth. In Q1 2022, Zhongji Xuchuang's revenue growth rate was 41.9%, Tianfu Communication's revenue growth rate was 16.18%, and Xinyisheng's revenue growth rate was 18.3%. For overseas manufacturers, although the growth rate of II-VI was only 5.68%, the company added 1.2 billion yuan in new orders in the first quarter, and the orders in hand increased by 88% year-on-year. Lumentum’s optical communications business revenue was US$344 million, down 11.3% year-on-year. Although sales revenue fell year-on-year, EML chip revenue hit a single quarter high. The basic principle of
lidar is that the laser emits a beam, and the detector receives the beam reflected from the object to be measured, and obtains relevant information such as the distance of the object to be measured by analyzing it to draw a high-precision 3D image. The laser needs to form a transmission module through an integrated laser driving and emission optical system, so as to ensure the stable operation of the laser and emit high-quality light beams. The detector also needs to integrate analog front-end circuits and reception optical systems to ensure the reception of high signal-to-noise ratio reflected signals. The structure of the lidar is highly similar to that of the optical module, both include the transmitting part and the receiving part. Components such as lasers and filters can be multiplexed, and the BOM cost of the transmitting part and the receiving part accounts for a relatively high proportion and belongs to the core part.
3.3 Beidou navigation high-precision applications are blooming in multiple points, military products are about to enter the replacement cycle
3.3.1 Beidou 3 improves positioning accuracy, and the development of industry applications is expected to speed up
On July 31, 2020, the Beidou 3 global satellite navigation system was officially launched, and the Beidou system entered a new stage of global service. At present, the United Nations Satellite Navigation Commission has identified suppliers including China Beidou, US GPS, Russian GLONASS and EU GALILEO. Global satellite navigation has formed a new pattern of coexistence of four global systems, two regional systems and multiple enhanced systems, and the global satellite navigation industry continues to develop.
Compared with the other three global navigation satellite systems, Beidou navigation technology is more advanced. First, Beidou-3 uses a satellite-borne hydrogen atomic clock, which has the characteristics of good frequency stability and low drift rate, and has advantages in navigation accuracy; second, Beidou-3 navigation system further improves short message communication services and realizes short message emergency communication, and the satellite navigation system does not have this capability; third, Beidou-3 system consists of three orbit satellites, and high-orbit satellites have more high-orbit satellites than other satellite navigation systems, with strong occlusion resistance and performance advantages in low-latitude areas. At present, the Beidou satellite navigation system has signed cooperation agreements with 137 countries around the world, and the international development space is constantly expanding.
The country attaches importance to the development of Beidou industry. On April 6, 2022, a relevant person in charge of the High-Tech Department of the National Development and Reform Commission answered reporters' questions on promoting the development of Beidou industry in the 14th Five-Year Plan, promoting the large-scale application of Beidou, as well as marketization, industrialization and internationalization, and put forward five policies to support the development of Beidou industry. During the 14th Five-Year Plan period, we must seize the major opportunity of the comprehensive completion and opening of services of Beidou-3 global satellite navigation system. The National Development and Reform Commission will actively work with relevant departments to strengthen system planning and top-level design, strengthen government guidance role, further improve Beidou industry development support policies, strengthen supervision and management, and promote the high-quality development of Beidou industry.
2021 The overall output value of my country's satellite navigation and location service industry reached 469 billion yuan, an increase of 16.29% over 2020. Among them, the core output value of industries, including chips, devices, algorithms, software, navigation data, terminal equipment, infrastructure, etc., reached 145.4 billion yuan, accounting for 31% of the total output value. The related output value derived from satellite navigation reached 323.6 billion yuan, an increase of 18.2% year-on-year.
my country's satellite navigation and location service industry chain shows a trend of value transfer to downstream application links. The upstream is affected by the decline in prices of chips, boards and core devices, and its proportion in the entire industrial chain has shown a downward trend. Positioning chips, boards, antennas and other products continue to decline in price, with low value, and the proportion of the value of the industrial chain has dropped from 11.27% in 2017 to 9.52%; with the gradual maturity of the industrial chain and the growth of the group, competition in the terminal integration link intensifies, years of market accumulation has gradually stabilized terminal demand, and terminal prices have declined steadily, and the proportion of the value of the midstream terminal and system integration links has increased from 52% to 44%; the downstream operation and maintenance service links have grown rapidly, and the fastest increase in all links. With the decline in costs in the middle and upstream industrial chain and the construction of Beidou navigation system gradually improved, the downstream application market has developed rapidly, and the proportion of output value has increased from 37% in 2017 to 47%.
3.3.2 High-precision positioning applications are blooming in multiple points, and deformation monitoring, autonomous driving and other scenarios have begun to increase in volume
At present, satellite navigation has been upgraded from traditional navigation positioning services to space-time information services, and high-precision positioning continues to generate new application formats. In 2021, China's sales revenue of high-precision positioning products was 15.19 billion yuan, an increase of about 33% year-on-year, and the average annual compound growth rate from 2010 to 2021 reached 24.5%. In 2021, the total shipment of high-precision chips, modules and boards in China's centimeter-level applications exceeded 1.2 million pieces this year. The main application scenarios include drones, automatic driving of agricultural machinery, surveying and mapping instruments, intelligent connected vehicles, etc. High-precision applications are clearly showing a trend of ubiquitousness and scale. The total sales volume of various high-precision application terminals in the domestic market is close to 1.7 million units per set, of which more than 80% of the terminals used in domestic high-precision modules and boards have been exceeded, and the shipment volume of high-precision antennas is close to 1.7 million.
With the promotion of the "new infrastructure" strategy, the demand for Beidou navigation application in the construction of modern infrastructure systems including transportation, energy, water conservancy, agriculture, etc. continues to be released. Digital construction plans that apply high-precision positioning are promoted in the construction of various infrastructures. The Ministry of Natural Resources continues to promote the in-depth application of the Beidou system in the fields of geographic information surveying and mapping, land space planning, geological disaster monitoring, etc. At the same time, the application of high-precision positioning navigation in agricultural machinery and automobile automatic driving is in full swing. High-precision positioning navigation is implemented in the digitalization process of various industries, and is constantly forming new segmented markets, showing a situation of blooming at multiple points, further enhancing the overall market size of my country's satellite navigation and location services.
The demand for multi-level real-life three-dimensional construction of national, provincial, municipal and county has increased, and industrial development continues to be stable during the 14th Five-Year Plan period. The construction of a real-life three-dimensional China is a development requirement for surveying, mapping, geographic information industry in the new era. It has been included in the "14th Five-Year Plan" natural resource protection and utilization plan, and the industrial development is long-term. In February 2022, the "Notice on Comprehensively Promoting the Construction of Real-Scene Three-Dimensional China" clarified the two major construction goals and five major construction tasks of Real-Scene Three-Dimensional China, and pointed out the direction for relevant enterprises to open up the market. According to data from the Surveying and Mapping Development Research Center of the Ministry of Natural Resources, the market price of urban non-urban three-dimensional data production in my country is about 50,000-06,000 yuan/square kilometer, and the market price of urban urban three-dimensional data production in about 20,000 yuan/square kilometer. The total number of real-life three-dimensional data production tasks in urban areas, built areas and non-urban areas in all cities is about 60 billion yuan.
Agricultural mechanization and intelligence transformation and upgrading, and promote the rapid development of the agricultural machinery autonomous driving industry. The agricultural machinery autonomous driving system is a necessary equipment for agricultural mechanization and intelligence. Through the integration of modules such as satellite navigation positioning and wheel rotation, it realizes the autonomous driving and remote control management of agricultural machinery. According to statistics from the China Satellite Navigation and Positioning Association, more than 100,000 agricultural machinery autonomous driving systems have been installed nationwide, more than 450,000 remote operation and maintenance terminals such as agricultural machinery positioning and operation monitoring have been installed nationwide, and 258,000 agricultural machinery equipment connected to the national precision agricultural comprehensive data service platform has been achieved, realizing cross-enterprise agricultural machinery operation data integration, 24-hour dynamic monitoring of staple grain crops such as rice, wheat, and corn, and tractor operations.
Since 2022, the "14th Five-Year Plan for National Agricultural Mechanization Development" and the "Opinions on Doing a Good Job in Key Work on Comprehensively Promoting Rural Revitalization in 2022" respectively mention promoting the application of Beidou smart terminals in the field of agricultural production. By 2025, there will be no less than 500,000 agricultural machinery installed in Beidou terminals. It is expected that the market for agricultural machinery autonomous driving systems will continue to grow, and the market size is expected to reach about 10 billion yuan from 2022 to 2025. The current market concentration of agricultural machinery autonomous driving systems is high, with the market share of the top five suppliers in the market in 2021 exceeding 80%.
Frequent geological disasters have caused huge losses, and geological disaster predictions have significantly reduced casualties and economic losses. Geological disasters have extremely strong uncertainty, and the number of geological disasters fluctuates and changes in the country in various years, and direct economic losses fluctuate at a high level. Based on the laws of the occurrence period, type and characteristics of geological disasters, combined with relevant meteorological data analysis, the prevention and control prediction of geological disasters can be achieved. According to statistics from the Ministry of Natural Resources, a total of 905 geological disasters were successfully predicted nationwide in 2021, involving 25,528 possible casualties, avoiding direct economic losses of 1.35 billion yuan.
National and local governments continue to issue documents to promote geological disaster prevention and control work, and the market potential for geological disaster monitoring is huge. The Ministry of Land and Resources, the Ministry of Natural Resources, the Ministry of Finance and other departments have issued documents to promote the improvement of grassroots geological disaster prevention capabilities. In the action plans of geological disaster prevention and control, many provinces and cities have proposed to use high-segment satellites and airborne lidars to couple geological disaster prevention and control capabilities, and the digital geological disaster monitoring needs in various regions and cities have increased. In the first quarter of 2021, the scale of government procurement of geological disaster monitoring projects exceeded 500 million yuan, and in April the procurement scale reached 130 million yuan. The geological disaster monitoring market is still in the process of increasing volume.According to data from the Geological Exploration and Management Department of the Ministry of Natural Resources, as of 2020, my country has detected more than 330,000 geological disaster hazards, and a large number of geological disaster hazards have not been discovered yet. Monitoring and early warning equipment has been installed at more than 25,000 hidden danger points, and there is still a large gap in the market. Assuming that each geological disaster monitoring point uses high-precision positioning navigation equipment value is about 50,000 yuan, and the overall market space is about 15 billion yuan. The application and promotion of the Beidou system in the water conservancy industry hydrological monitoring, dam deformation monitoring, water situation inspection and other fields has also achieved good demonstration results. At present, more than 2,587 reservoirs have used short messages to transmit hydrological monitoring information, and more than 650 deformation landslides have been set up with Beidou monitoring stations. According to the data of the National Water Conservancy Development Statistical Bulletin in 2020, my country has built 985.66 million reservoirs, including 774 large reservoirs and 4,098 medium-sized reservoirs. Assuming that each large and medium-sized reservoir needs to set up 10 deformation monitoring points, each small reservoir needs to set up 3 deformation monitoring points, and each deformation monitoring point has a value of 20,000 yuan, and the overall market space for deformation monitoring of reservoir dams is about 6.6 billion yuan.
Domestic automotive unmanned driving industry has gradually entered the stage of transformation and development. According to the "Action Plan for the Development of the Internet of Vehicles (Intelligent Connected Vehicles) Industry", after 2020, the country will gradually realize the large-scale commercial applications of intelligent connected vehicles and 5G-V2X with high-level autonomous driving functions, and the scale of the domestic unmanned driving market is in its infancy. According to IDC statistics, the penetration rate of new cars of L2 autonomous driving in the passenger car market in my country in the first quarter of 2022 reached 23.2%. It is predicted that with the continuous increase in the current domestic electric vehicle market, the models that have achieved centralized control in the domestic driving assistance field will continue to increase by 2025 and can support higher-level autonomous driving. The
L3 level driverless market promotes the coupling of on-board high-precision satellite positioning and inertial navigation (GNSS RTK+IMU), and a variety of new intelligent car configurations with high-precision navigation and positioning solutions. In the high-precision satellite positioning part, the GNSS system is the main one, and the centimeter-level positioning is achieved in combination with RTK; in the inertial navigation part, the inertial sensor is used to obtain information such as acceleration and angular velocity, and calculate the current vehicle position and orientation. The requirements for high accuracy and high reliability of the L3-level unmanned driving system promote the coupling of GNSS signals, cameras, lidars, IMUs, etc., especially the integration of GNSS RTK and IMU. Through the high-precision map, it includes information such as speed limits of corresponding road sections and map collection and recording of specific road sections, combined with satellite positioning signals, RTK differential positioning, IMU, cameras, lidars, etc., the positioning accuracy is achieved in the current market. At present, passenger models from many manufacturers such as Xiaopeng, NIO, Ideal, and Nezha have been equipped with high-precision positioning technology.
The growth rate of intelligent connected vehicles promotes the development of the unmanned driving market, and there is room for incremental space for the high-precision navigation and positioning equipment market for passenger vehicles. According to the forecast data of the China Jing Industry Research Institute, the penetration rate of my country's L3 and above unmanned driving market will reach 15% in 2025. The China Association of Automobile Manufacturers predicts that the overall sales volume of my country's automobile market is expected to reach 30 million vehicles in 2025. Assuming that the sales volume of passenger cars is 25 million, the sales volume of passenger cars L3 and above will be about 3.75 million vehicles. According to the calculation of 1,000 yuan of a single vehicle-mounted high-precision positioning equipment, the market size is about 3.75 billion yuan. (Report source: Future Think Tank)
3.3.3 Military Beidou equipment is about to enter the replacement cycle
0 The United States has established the world's largest military satellite system. Since its GPS navigation system was put into operation in the 1990s, it has played a key role in the coordination of combat units and precise weapon strikes in modern warfare. The satellite navigation system can provide navigation location services and timed services to the army, collect basic geographical location information of each unit, and provide effective battlefield management data for the command center. It can be used in various scenarios including individual soldiers, vehicles, ships, military aircraft, missile and weapons.
In June 2021, the successful launch of the fifth GPSIII satellite in the United States marked the completion of the deployment of all 24 M-code satellites with full operation capabilities of the US military.According to the latest satellite database released by UCS, as of the beginning of 2022, a total of 232 satellites for military or some military use in the United States are in orbit. According to their purpose, they can be divided into information acquisition satellites (reconnaissance, early warning, situational awareness), information transmission satellites (communication, relay), and space-time reference satellites (navigation, geodesic). For space-time reference satellites, in the future, GPS constellations will increase signal transmission power while improving anti-interference capabilities, providing users with more accurate information on position, speed, time and attitude, and will extend their service life.
GPS Military user equipment is a key link in the GPS system. While the development of military satellites is also promoting the development of military satellite reception equipment. GPS third-generation military equipment mainly uses a receiving card that receives M codes, which is a military-specific GPS signal designed to meet the needs of military positioning, navigation and timing (PNT). On December 31, 2018, the United States launched its first GPS-III satellite, which can launch powerful M signals, helping military users overcome GPS signal interference and prevent false GPS signals by encrypting the signal. In November 2020, the US military passed the early use function acceptance of the M code of the GPS system ground control section. The US military has signed M-code-related equipment orders with Raytheon, BAE and other companies, and applied M-code GPS receiving cards to armored vehicles, bombers, destroyers and other equipment.
The US military is currently still investing in GPS systems and equipment. In the US Department of Defense’s 2023 defense budget application, it plans to invest US$1.8 billion in two global positioning system development units in space and space-based systems. According to statistics from relevant reports of Industry Information Network, the U.S. military GPS investment accounts for about 1% of the total military expenditure. my country's defense budget in 2022 is 1.45 trillion yuan. This estimates that the potential market size of military Beidou navigation is more than 10 billion yuan
(This article is for reference only and does not represent any of our investment suggestions. If you need to use relevant information, please refer to the original text of the report.)
selected report source: [Future Think Tank]. Future Think Tank - Official Website
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