Market Overview - The Shanghai Composite Index rose by 1.22% on October 15, with 29 out of the 31 sectors in the Shenwan classification experiencing gains. The top-performing sectors were electric power equipment and automobiles, with increases of 2.72% and 2.37% respectively. The telecommunications sector also saw a rise of 1.42% [1] - The main funds in the two markets experienced a net outflow of 853 million yuan, while 16 sectors saw net inflows. The pharmaceutical and biological sector led with a net inflow of 3.845 billion yuan and a daily increase of 2.08%, followed by the electric power equipment sector with a net inflow of 1.704 billion yuan [1] Telecommunications Sector - The telecommunications sector increased by 1.42% today, but experienced a net outflow of 2.137 billion yuan. Out of 125 stocks in this sector, 103 rose while 18 fell. There were 54 stocks with net inflows, with the highest being Guanghetong, which saw a net inflow of 84.1974 million yuan [2] - The top three stocks with the highest net inflows in the telecommunications sector were Guanghetong (3.77% increase), Jianqiao Technology (2.03% increase), and Guandun Quantum (4.51% increase) [2] - The stocks with the highest net outflows included ZTE Corporation (-0.40% change), New Yisheng (-1.92% change), and Hengbao Co., Ltd. (-2.46% change), with net outflows of 666.95 million yuan, 464.37 million yuan, and 187.19 million yuan respectively [3]

Core Viewpoint - The traditional computing architecture is insufficient for the efficient, low-energy, and large-scale collaborative AI training needs, leading to the trend of supernodes which significantly boosts the demand for Scale up-related hardware [1][3] Group 1: AI Hardware Capabilities - AI hardware capabilities are driven by three main factors: computing power (determined by GPU performance and quantity), storage capacity (high-bandwidth memory cache close to GPUs), and communication capacity (encompassing Scale up, Scale out, and Scale across scenarios) [1][2] Group 2: Market Trends and Projections - The market for Scale up switching chips is expected to reach nearly $18 billion by 2030, with a CAGR of approximately 28% from 2022 to 2030, driven by the demand for supernodes [3] - The construction of large-scale AI clusters necessitates extensive interconnectivity between nodes, leading to increased demand for Scale out hardware, while power resource limitations in single regions will promote the adoption of Scale across solutions [3] Group 3: Communication Protocols - Different communication protocols are required for Scale up and Scale out, with major companies developing proprietary protocols alongside third-party and smaller firms promoting public protocols [4] - Notable proprietary protocols for Scale up include NVIDIA's NVlink and AMD's Infinity Fabric, while public protocols include Broadcom's SUE and PCIe [4] Group 4: Domestic Hardware Development - The domestic production rate of communication hardware is currently very low, presenting a significant opportunity for domestic replacement in the market [5] - Companies like Shudao Technology and Shengke Communication are advancing towards commercialization of their products, indicating a growing domestic market potential [5] Group 5: Investment Opportunities - Beneficiaries of PCIe hardware include Wantong Development and Lanke Technology, while Ethernet hardware beneficiaries include Shengke Communication and ZTE [6]

Core Viewpoint - ZTE Corporation, in collaboration with industry partners, has successfully completed key technology tests for RAN AI, enhancing the integration of AI with RAN for improved efficiency and user experience in 5G networks [1] Group 1: Technology Development - The tests were organized by the IMT-2020 (5G) Promotion Group, focusing on the research and standardization of 3GPP R18/R19 5G RAN+AI/ML [1] - The testing verified intelligent beam selection for millimeter waves and ensured service experience in low-frequency bands, demonstrating the capabilities of AI-driven base stations [1] Group 2: Commercialization Potential - The successful completion of these tests lays a solid foundation for the future commercialization of these technologies in the 5G sector [1]

Core Insights - The integrated sensing, communication, computing, and control (ISCCC) technology has seen significant development in China, with the market size projected to reach approximately 15.79 billion yuan in 2024, reflecting a year-on-year growth of 10.57% [1][7] - A major breakthrough in this field was achieved in 2023 when China Mobile Research Institute and ZTE completed the industry's first low-frequency ISCCC technology verification, demonstrating multi-target trajectory perception in complex mobile environments with a detection range exceeding 1.4 kilometers and sub-meter level accuracy [1][7] Industry Overview - ISCCC is a collaborative system that deeply integrates communication, sensing, computing, and control functions, enabling the fusion of communication and sensing capabilities through shared resources and joint design [2] - The technology supports smart cities, intelligent transportation, and industrial IoT by creating a closed-loop interaction between the physical and digital worlds [2] Industry Development History - The development of the ISCCC industry in China from 2021 to 2025 follows a path of "technology foundation - scenario verification - ecosystem construction," with significant milestones including the establishment of the ISCCC task force in July 2021 and various technological breakthroughs in subsequent years [3] - By 2025, the industry is expected to transition from technology verification to ecosystem collaboration and large-scale commercialization [3] Industry Value Chain - The upstream of the ISCCC industry includes core hardware such as base station RF and antennas, chips, and satellite communication equipment, while the midstream consists of system integrators and solution providers [4] - Downstream applications are primarily in smart cities, intelligent transportation, low-altitude economy, and smart manufacturing [4] Market Size - The ISCCC market in China is projected to reach approximately 15.79 billion yuan in 2024, with a year-on-year growth of 10.57% [7] - The successful verification of low-frequency ISCCC technology in 2023 has laid a solid foundation for future commercialization [7] Key Companies' Performance - The competitive landscape of the ISCCC industry is characterized by leading companies like Huawei, ZTE, and China Mobile, which leverage their technological advantages to dominate the market [8] - ZTE has made significant advancements in ISCCC technology, achieving notable results in various application scenarios and completing over 80 low-altitude ISCCC pilot projects across multiple provinces [10] - China Mobile has played a pivotal role in network architecture upgrades and has deployed ISCCC traffic perception systems during the Hangzhou Asian Games [9] Industry Development Trends - The ISCCC industry is expected to leverage 6G technology for accelerated development, creating a closed-loop system that integrates communication, sensing, and computing [11] - Low-altitude economy and smart city applications are anticipated to be core areas for ISCCC technology, enhancing logistics and urban management efficiency [13] - The industry is moving towards a collaborative ecosystem involving hardware, software, protocols, and applications, supported by government policies and standardization efforts [14]

Core Viewpoint - ZTE Corporation's subsidiary, ZTE Microelectronics, has developed the Han域 M1 chip, which is a high-performance SoC chip designed for the next generation of automotive electronic architectures, emphasizing high performance, large bandwidth, and high security [1] Group 1 - The Han域 M1 chip features a multi-core heterogeneous architecture, providing strong computing power and low-latency processing capabilities for multifunctional domains and centralized computing units [1] - The chip is set to be delivered by the end of September 2025 [1]

Economic News - The Ministry of Commerce of China has taken countermeasures against five U.S. subsidiaries of Hanwha Ocean Corporation in response to the U.S. investigation into China's maritime, logistics, and shipbuilding sectors [2] - The Chinese automotive industry has seen significant growth in the first nine months of the year, with production and sales reaching 24.43 million and 24.36 million vehicles, respectively, marking year-on-year increases of 13.3% and 12.9% [2] - The China Nuclear Group has made significant progress in key technologies for magnetic confinement nuclear fusion energy extraction, establishing a research platform for liquid metal and helium gas working fluids [2] Company Insights - ZTE Corporation has completed testing for 5G-A cellular passive IoT technology, achieving a 100% success rate in inventory success for both single and multiple tags [4] - CATL has established a new five-year strategic cooperation with Dongfeng Commercial Vehicle, focusing on electric vehicle technology development and market expansion [4] - Tongyu Communication has entered the low-orbit satellite supply chain and received overseas orders, aiming to enhance its capabilities in satellite-ground collaboration [4] Daily Research - The report indicates that external shocks have limited impact on the market, with the A-share market maintaining a mid-term upward trend despite recent volatility [5] - The report suggests a dual mainline investment strategy, emphasizing the importance of the technology sector while also considering cyclical sectors like military, pharmaceuticals, and new energy [6] Satellite Internet Industry - The report reviews the development of SpaceX's Falcon 1 rocket, highlighting the importance of engine components and testing services in the commercial space industry [8] - The Merlin 1A engine is identified as a core component of the Falcon 1 rocket, with the combustion chamber being critical for its performance [9] - The report emphasizes the significance of extensive testing in achieving a high success rate for rocket launches, with SpaceX achieving a 97.76% success rate across its missions [12] Investment Strategy - The report recommends focusing on domestic suppliers of rocket engine components and testing services as promising investment opportunities in the commercial space sector [13] - Specific companies highlighted include Srey New Materials and Guoji Precision Engineering as key players in the rocket engine supply chain [14]

Core Viewpoint - ZTE Corporation's wholly-owned subsidiary, ZTE Microelectronics, has developed the HanYu M1 chip, which is a high-performance central computing platform SoC chip designed for the next generation of automotive electronic and electrical architectures [1] Group 1 - The HanYu M1 chip features high performance, large bandwidth, and high security [1] - It employs a multi-core heterogeneous architecture, providing strong computing power and low-latency processing capabilities for multifunctional domains and centralized computing units [1] - The chip is scheduled for delivery by the end of September 2025 [1]

Core Viewpoint - The low-altitude economy sector experienced a decline of 2.28% on October 14, with Xuguang Electronics leading the drop. The Shanghai Composite Index closed at 3865.23, down 0.62%, while the Shenzhen Component Index closed at 12895.11, down 2.54% [1]. Group 1: Stock Performance - The top gainers in the low-altitude economy sector included: - Shangong Shenbei (600843) with a closing price of 13.73, up 10.02% and a trading volume of 999,700 shares, totaling 1.362 billion yuan [1]. - Dongxin Peace (002017) closed at 25.28, up 10.01% with a trading volume of 493,800 shares, totaling 1.208 billion yuan [1]. - The top losers included: - Xuguang Electronics (600353) with a closing price of 19.16, down 8.19% and a trading volume of 1,020,100 shares, totaling 2.051 billion yuan [2]. - Longsheng Technology (300680) closed at 52.03, down 8.07% with a trading volume of 170,700 shares, totaling 924 million yuan [2]. Group 2: Capital Flow - The low-altitude economy sector saw a net outflow of 3.743 billion yuan from institutional investors, while retail investors experienced a net inflow of 2.939 billion yuan [2]. - The capital flow for specific stocks showed: - Shangong Shenbei (600843) had a net inflow of 518 million yuan from institutional investors, accounting for 38.02% of its total trading [3]. - Dongxin Peace (002017) experienced a net inflow of 315 million yuan from institutional investors, representing 26.05% [3].

Market Overview - The communication equipment sector experienced a decline of 5.74% on October 14, with Meilixin leading the drop [1] - The Shanghai Composite Index closed at 3865.23, down 0.62%, while the Shenzhen Component Index closed at 12895.11, down 2.54% [1] Stock Performance - Notable gainers in the communication equipment sector included: - Dongxin Peace (002017) with a closing price of 25.28, up 10.01% [1] - Wanlong Optoelectronics (300710) at 21.73, up 7.15% [1] - Hengbao Co. (002104) at 21.96, up 6.55% [1] - Major decliners included: - Meilixin (301307) at 32.90, down 10.06% [2] - Xinyi Sheng (300502) at 316.50, down 9.21% [2] - Zhongji Xuchuang (300308) at 346.10, down 8.19% [2] Capital Flow - The communication equipment sector saw a net outflow of 6.424 billion yuan from institutional investors, while retail investors had a net inflow of 4.461 billion yuan [2] - The sector's capital flow indicates a mixed sentiment, with institutional investors pulling back while retail investors increased their positions [2] Individual Stock Capital Flow - Dongxin Peace (002017) had a net inflow of 3.15 billion yuan from institutional investors, while it faced a net outflow of 983.79 million yuan from speculative funds [3] - Hengbao Co. (002104) saw a net inflow of 1.90 billion yuan from institutional investors, with a net outflow of 409.64 million yuan from speculative funds [3] - Meilixin (301307) experienced a significant net outflow of 789 million yuan from institutional investors [3]

Core Insights - ZTE Corporation has launched the RoomPON 7.0 all-optical central screen product, marking a new phase in smart home technology focused on AI-driven experiences [1][2] - The release signifies a strategic shift from bandwidth expansion to enhancing smart experiences, emphasizing deep collaboration with China Mobile [1] Product Development - RoomPON 7.0 features a 6 TOPS NPU computing power and 8K single-chip decoding capability, with an overall performance improvement of 85% compared to the previous generation [2] - The product introduces an AI home "service engine" that includes intent recognition, low-latency TTS, and high-precision voiceprint recognition, positioning it as an intelligent endpoint capable of understanding and serving user needs [2] Market Positioning - ZTE's home terminal annual shipment has surpassed 100 million units, with FTTR products reaching nearly 30 million sets [1] - The RoomPON 7.0 serves as a unified interaction entry point covering five core scenarios: family memory, health care, home security, interactive entertainment, and network enjoyment, enhancing the digital living experience [2] Future Strategy - ZTE aims to continue collaborating with global industry partners to build an AI home ecosystem, leveraging technology and cooperation to improve digital living for households [2]