Communications industry mid-year reports are intensively disclosed, and AI drives the performance of listed companies to rise
2024-08-26
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"In the first half of 2024, the communications industry achieved good growth in performance, telecom operators operated stably, and optical modules, IDCs, etc. benefited significantly from the increase in computing power demand brought about by the development of artificial intelligence (AI). "CITIC Construction Investment's chief TMT industry analyst Wu Chaoze told Caixin on August 25 that looking ahead to the second half of the year, the industry is expected to maintain a good growth trend.
According to iFinD, as of August 25, 50 listed companies in the communications industry have disclosed their 2024 semi-annual reports, of which nearly 80% have achieved profitability, and only 11 listed companies have net losses. Among them, 31 companies have disclosed semi-annual reports on the Shenzhen Stock Exchange, with a total net profit attributable to their parent companies exceeding 10 billion yuan, a year-on-year increase of 32%.
From the perspective of business segments, telecom operators operated steadily in the first half of the year, and the revenue of emerging businesses such as optical modules grew significantly. Data shows that among the companies that have disclosed their semi-annual performance reports, the revenue growth rates of the optical modules and IDC segments in the first half of the year were 69% and 79% respectively, and the net profit attributable to the parent companies grew by 123% and 35% respectively.
"Looking at the listed companies in the communications industry that have released their semi-annual reports, the industry as a whole has achieved steady growth." Zhang Lin, chief analyst of the communications industry at Industrial Securities, told Caixin that against the backdrop of many challenging global macroeconomic conditions, this steady growth reflects the rigidity of the communications industry as a strategic infrastructure for various countries and a requirement for the development of new quality productivity, as well as the global competitiveness of domestic listed companies.
The revenue of the three major operators exceeds one trillion
Among the 50 listed companies in the communications industry that have disclosed their semi-annual reports, 39 achieved growth in net profit attributable to their parent companies, including 24 in the Shenzhen Stock Exchange.
Specifically, in the first half of this year, the three major operators, China Mobile, China Telecom and China Unicom, achieved a total revenue of approximately 1.01 trillion yuan, a year-on-year increase of 2.94%, and a net profit attributable to shareholders of 108.052 billion yuan, a year-on-year increase of 6.17%.
In addition, the net profit of optical module leader Zhongji Xuchuan increased significantly by 284.26% year-on-year, and the net profit growth rates of five companies including Tianfu Communication and Hytera Communications exceeded 50%.
On August 25, Zhongji Xuchuan released its semi-annual report. The company achieved revenue of 10.799 billion yuan in the first half of the year, a year-on-year increase of 169.70%; net profit attributable to shareholders of listed companies was 2.358 billion yuan, a year-on-year increase of 284.26%; non-net profit was 2.333 billion yuan, a year-on-year increase of 300.07%.
As for the reasons for the substantial increase in performance, Zhongji Xuchuan previously stated that the company's main product, 800G/400G optical modules, continued to maintain rapid growth in the first half of this year, the company's product structure continued to be optimized, and the sales revenue of high-end products accounted for a high proportion, which led to a substantial increase in the company's operating income and net profit.
Tianfu Communication also achieved a double increase in revenue and net profit. In the first half of 2024, the company achieved operating income of 1.556 billion yuan, a year-on-year increase of 134.27%. Net profit was 654 million yuan, a year-on-year increase of 177.20%. Non-net profit was 641 million yuan, a year-on-year increase of 184.24%. Basic earnings per share was 1.1824 yuan.
Tianfu Communications said that the changes in the company's operating income were mainly due to the development of artificial intelligence (AI) technology and the increase in computing power demand. The construction of global data centers has led to a continued and stable growth in demand for high-speed optical device products, driving the company's active and passive product line revenue growth.
"From the perspective of each sub-sector, there are many highlights in operators and optical modules." Zhang Lin said that the three major operators, as excellent dividend assets, have maintained steady growth for many years, reflecting the stability of traditional businesses and the effectiveness of strategic transformation to new businesses. In addition, as the development of the global artificial intelligence industry enters the "iPhone" moment, countries are investing in it in full swing, and the core links of the industry are still in North America. Optical modules, as a key link (network) in China's participation in the development of global AI, are also the first to benefit from this round of technological changes. Starting from 2023, performance will continue to be released.
AI has a significant impact
From the perspective of the industry as a whole, the communications industry has regained its business momentum, driving growth in performance of listed companies in the industry in the first half of the year.
Recently, the Ministry of Industry and Information Technology released the economic operation of the communications industry in the first half of 2024. In the first half of this year, the total volume of telecommunications business increased by 11.1% year-on-year, and the total telecommunications business revenue reached 894.1 billion yuan, a year-on-year increase of 3%. Among them, the fixed-line broadband business and emerging business revenue continued to grow. The Internet broadband business of the three major operators increased by 5.4% year-on-year, achieving revenue of 136.5 billion yuan, while the emerging business achieved a total business revenue of 227.9 billion yuan in the first half of the year, a year-on-year increase of 11.4%.
In terms of the performance growth rate of listed companies, according to Wu Chaoze's analysis, as of August 25, 52 companies in the communications industry have disclosed their 2024 semi-annual performance reports. According to the announcement data statistics, the overall operating income growth rate of the sector was about 3%, and the net profit attributable to the parent company increased by about 7%. The total revenue was 1,189.8 billion yuan and the total profit was 121.9 billion yuan, achieving good growth in overall performance.
Specifically, the communications industry's telecom operators, optical modules and IDC sectors, and the Internet of Things and smart controller sectors all achieved varying degrees of growth in the first half of the year.
According to Wu Chaoze's analysis, the telecom operator sector's operating income grew by 3% in the first half of the year, and its net profit attributable to the parent company grew by 6%, still maintaining a steady growth trend. The optical module and IDC sectors' operating income grew by 69% and 79% in the first half of the year, and their net profit attributable to the parent company grew by 123% and 35%, respectively. The global artificial intelligence industry is currently developing at a high speed, AI large model capabilities are advancing by leaps and bounds, industry applications are ready to go, and end-side AI has also made good progress. The demand for AI computing infrastructure construction at home and abroad continues to be strong. As important components, optical modules and IDCs have rapidly increased downstream demand, and the performance of related companies has been significantly released.
In addition, the operating income growth rates of the Internet of Things and smart controller sectors in the first half of the year were 20% and 25% respectively, and the net profit attributable to shareholders grew by 26% and 31% respectively. The downstream demand directions of the two sectors include home appliances, power tools, electricity, pan-IOT and other fields. The performance of the sectors achieved rapid growth in the first half of the year. Driven by the current economic growth, demand in various industries has increased.
Looking ahead to the second half of the year, Wu Chaoze said that the communications industry is expected to maintain a good growth trend, telecom operators will operate stably and improve steadily, the artificial intelligence industry will develop in full swing, the demand for computing power infrastructure construction will further increase, and economic transformation and growth will also bring more demands for networking and intelligent upgrades in all walks of life.
(This article comes from China Business Network)
