Core Viewpoint - The Chinese government criticizes the EU's decision to phase out Huawei and ZTE equipment from its telecom networks, arguing that it undermines fair competition and market principles [1] Group 1: Economic Impact - Chinese companies have contributed positively to the European economy by providing quality products and services, as well as creating jobs [1] - The removal of Chinese telecom equipment is said to hinder technological progress and result in significant economic losses for the countries involved [1] Group 2: Market Principles - The Chinese government emphasizes that administrative measures to restrict market participation without legal basis or factual evidence violate market principles and fair competition rules [1] - The call for the EU to ensure a fair, transparent, and non-discriminatory business environment for Chinese enterprises is highlighted [1]

Core Viewpoint - The Chinese government emphasizes the importance of providing a fair and transparent business environment for Chinese companies operating in Europe, particularly in light of the EU's potential actions against Huawei and ZTE [1]. Group 1: EU Actions and Chinese Companies - The EU Commission is reportedly considering measures to gradually remove Huawei and ZTE from its telecommunications networks [1]. - Chinese companies have been operating in Europe in compliance with local laws, contributing positively to local economies and job creation [1]. Group 2: Market Principles and Economic Impact - The Chinese government argues that removing Chinese telecom companies without legal basis or factual evidence violates market principles and fair competition rules [1]. - The forced removal of Chinese telecom equipment has been shown to hinder technological progress and result in significant economic losses for the countries involved [1]. Group 3: Call for Fair Treatment - The Chinese government urges the EU to provide a non-discriminatory business environment to restore confidence in investment from Chinese companies [1].

Core Viewpoint - The company is currently supplying 5G base station PCB mainboard products to ZTE Corporation and is actively researching 6G technology in response to customer demand [1] Group 1 - The company is primarily focused on supplying 5G base station PCB mainboard products to ZTE Corporation [1] - The company is actively laying out research for 6G technology, with some products already in the sample stage [1] - The company plans to deepen collaboration with customers and continue R&D efforts based on market demand and technological trends [1]

Core Insights - Quantum technology is viewed as the "key" to the next generation of information technology revolution, with significant breakthroughs in both policy and technology [1][3]. Policy Developments - The Anhui Provincial Development and Reform Commission announced that quantum technology is transitioning from technological breakthroughs to large-scale industrial applications, aiming to implement nearly 300 application scenarios by the end of this year and 1,000 by 2027 [1]. - The United Nations Educational, Scientific and Cultural Organization (UNESCO) has declared 2025 as the "International Year of Quantum Science and Technology" to commemorate the 100th anniversary of quantum mechanics [3]. Technological Advancements - A team from the Chinese Academy of Sciences has made significant progress in neutral atom quantum computing, proposing a new architecture based on fiber arrays that addresses challenges in achieving high parallelism, speed, and stability [1]. - Researchers at the University of Chicago have theoretically extended the connection distance between quantum computers to 2,000 kilometers, making the construction of a global quantum internet more feasible [2]. Industry Growth Potential - Quantum technology, encompassing quantum computing, quantum communication, and quantum precision measurement, is identified as a future industry with substantial growth potential, as highlighted in the 14th Five-Year Plan [3]. - The global quantum computing industry is projected to grow from $4.7 billion in 2023 to over $800 billion by 2035 [3]. R&D Investment - Over 60 companies in the A-share market are involved in quantum technology, with a total R&D expenditure of 69.47 billion yuan, accounting for 3.86% of total revenue [4]. - Among these, 35 companies reported R&D expenses exceeding 100 million yuan in the first three quarters, with seven companies surpassing 1 billion yuan [5]. Key Players and Financial Metrics - Notable companies include Guoxin Technology, which has the highest R&D expense-to-revenue ratio at 89.03%, and has successfully commercialized quantum security chips [5][6]. - Other companies with significant R&D investments include Suzhou Keda, Tianrongxin, and Digital Certification, with varying R&D expense ratios [5][6]. Institutional Interest - Institutional interest is high for companies like ZTE Corporation and China Mobile, with ZTE receiving ratings from 23 institutions [7]. - Forecasts indicate that nine companies are expected to achieve net profit growth rates exceeding 15% from 2025 to 2027 [7]. Market Predictions - Several stocks, including China Haifang and Keda Technology, are projected to have significant upside potential based on institutional target prices [8].

Core Viewpoint - ZTE Corporation has successfully completed outdoor testing of key low-altitude communication technologies under the 5G-A network in Zhangzhou, Fujian, following the completion of laboratory tests [1] Group 1 - The testing was organized by the IMT-2020 (5G) Promotion Group, which established the testing methods for base station equipment aimed at low-altitude communication [1] - ZTE is the first company to achieve this milestone in the context of 5G-A technology [1]

Core Viewpoint - The article highlights that ZTE Corporation has successfully completed outdoor testing of key low-altitude communication technologies under the 5G-A network in Zhangzhou, Fujian, following laboratory tests [1] Group 1 - The 5G-A technology research and development testing methods for base station equipment aimed at low-altitude communication were established by the IMT-2020 (5G) Promotion Group [1] - ZTE Corporation is the first to complete outdoor testing of low-altitude communication key technologies under the 5G-A network [1]

Core Viewpoint - The European Commission is exploring measures to force member states to remove Huawei and ZTE equipment from telecom networks, potentially pressuring non-EU countries by withholding funding for projects using Huawei technology [1][3]. Group 1: EU's Actions and Proposals - The European Commission's Executive Vice President, Margrethe Vestager, aims to upgrade the 2020 recommendation to stop using "high-risk suppliers" into legally binding regulations [1]. - If the proposal becomes law, non-compliance by member states could lead to infringement lawsuits and economic penalties [1][4]. - The Commission is also considering measures to discourage non-EU countries from relying on Chinese suppliers, including denying funding for projects involving Huawei [3]. Group 2: Industry Reactions and Market Impact - Following the news, shares of Nokia and Ericsson saw significant increases, with Nokia rising by 5% and Ericsson by 3.7% [4]. - There is a growing trend in Europe to impose stricter restrictions on Chinese suppliers, with countries like Germany and Finland considering similar actions [4]. - The inconsistency among EU member states regarding the use of Chinese suppliers poses significant security risks, according to hawkish voices within the EU [4]. Group 3: Security Concerns and Counterarguments - The EU's focus on the risks posed by Chinese telecom equipment manufacturers stems from concerns about national security and control over critical infrastructure [3][5]. - China has strongly opposed the EU's claims, arguing that Huawei and ZTE have operated in Europe for years without compromising security and have contributed positively to the telecom sector [5][9]. - Spain's government has defended its contract with Huawei, asserting that it poses no security risks and complies with national security standards [9].

Core Viewpoint - The European Commission is exploring measures to force member states to remove Huawei and ZTE equipment from telecom networks, potentially pressuring non-EU countries by withholding funding for projects using Huawei technology [1][3]. Group 1: EU's Actions and Proposals - The European Commission's Executive Vice President, Margrethe Vestager, aims to upgrade the 2020 recommendation to stop using "high-risk suppliers" into legally binding regulations [1]. - If the proposal becomes law, non-compliance by member states could lead to infringement lawsuits and economic penalties [1][4]. - The EU is increasingly focused on the risks posed by Chinese telecom equipment manufacturers amid rising tensions in trade and politics with China [3]. Group 2: Industry Reactions and Implications - Following the news, shares of Nokia and Ericsson saw significant increases, with Nokia rising by 5% and Ericsson by 3.7% [4]. - There is a growing trend in Europe to impose stricter restrictions on Chinese suppliers, with countries like Germany and Finland considering similar measures [4]. - The inconsistency in EU member states' approaches to Huawei creates significant security risks, according to hawkish voices within the EU [4]. Group 3: Counterarguments and Responses - China has strongly opposed the EU's claims of security risks associated with Huawei and ZTE, arguing that these companies have operated in Europe for years without compromising security [5][9]. - Spain has defended its contract with Huawei, stating it poses no security risks and complies with national security standards [8][9]. - Huawei criticized the EU's designation of it as a "high-risk supplier," claiming it lacks legal basis and violates free trade principles [9].

Core Viewpoint - ZTE Corporation's stock has experienced fluctuations, with a recent decline of 2.04% and a year-to-date increase of 3.69% [1] Company Performance - As of October 31, ZTE reported a revenue of 100.52 billion yuan for the first nine months of 2025, marking an 11.63% year-on-year growth, while net profit attributable to shareholders decreased by 32.69% to 5.322 billion yuan [2] - The company has distributed a total of 17.137 billion yuan in dividends since its A-share listing, with 8.114 billion yuan distributed in the last three years [3] Stock Market Activity - ZTE's stock price is currently at 41.25 yuan per share, with a market capitalization of 197.321 billion yuan [1] - The stock has seen a net outflow of 292 million yuan from major funds recently, with significant selling pressure observed [1] - The company has appeared on the trading leaderboard three times this year, with the latest instance on October 17, where it recorded a net buy of -554 million yuan [1] Shareholder Information - As of October 31, ZTE had 521,300 shareholders, an increase of 23.90% from the previous period, with an average of 7,729 shares held per shareholder, down by 19.30% [2] - Major shareholders include Hong Kong Central Clearing Limited and various ETFs, all of which have seen a reduction in their holdings [3]

Investment Rating - The report maintains an "Overweight" rating for the communication sector and communication equipment manufacturing [6]. Core Insights - The communication industry showed a steady growth in 3Q25, with total revenue and net profit attributable to shareholders increasing by 5.2% and 12.3% year-on-year, respectively [9]. - The growth is driven by the AI computing demand, particularly benefiting the optical communication and copper connection sectors, while telecom operators are expected to maintain stable growth [9][20]. - The report highlights the potential for high growth in net profit for the optical communication sector due to increased investments in AI computing capabilities [9][20]. Summary by Sections Telecom Operators - The three major telecom operators reported a revenue and net profit growth of 1.1% and 2.1% year-on-year, respectively, with net profit growth outpacing revenue growth [2][20]. - Traditional business revenue growth has slowed, but emerging AI applications are expected to drive growth in cloud computing and data center services [2][20]. - The operators' return on equity (ROE) continues to improve due to reduced capital expenditures and enhanced operational efficiency [2][25]. Optical Communication - The optical module and optical device sectors experienced significant growth, with total revenue and net profit increasing by 51% and 123% year-on-year, respectively [3][33]. - Key players like Zhongji Xuchuang benefited from sustained demand for 800G optical modules and the ramp-up of 1.6T products [3][33]. - Future demand for optical devices is expected to recover as the market for 800G and 1.6T optical modules expands [3][33]. Copper Connection - The copper connection sector saw a revenue and net profit increase of 26% and 72% year-on-year, respectively [4][63]. - Companies like Huafeng Technology are expected to benefit from the release of domestic super node projects, despite some short-term fluctuations in profit due to client pricing adjustments [4][63]. - The sector's growth is supported by the introduction of new AI-related products and the anticipated demand from super node deployments [4][63]. IDC (Internet Data Center) - The IDC sector reported a revenue decline of 1.6% but a net profit increase of 236% year-on-year, driven by successful public REITs projects [37]. - AI demand is expected to enhance the industry's growth prospects, although short-term challenges remain due to AI chip supply constraints [37][42]. - The report anticipates that as domestic AI chip production increases, the supply issues will gradually resolve, leading to improved performance in the IDC sector [37][42]. General Trends - The overall communication industry is benefiting from AI computing investments, with various segments such as optical modules, copper connections, and IDC showing promising growth trajectories [9][20][37]. - The report emphasizes the importance of adapting to the evolving landscape driven by AI and cloud computing, which is reshaping demand across the communication sector [9][20].