Huaxi Securities(SZ:002926) Zhi Tong Cai Jing·2025-09-08 05:28Core Viewpoint - The communication sector is experiencing profit differentiation, with AI-driven computing power leading to a recovery in performance [1] Trading Perspective - The sector ranks first in annual growth, with a total market capitalization accounting for 3.3% of the entire industry, primarily benefiting from AI-driven optical interconnection and computing power segments [2] Financial Perspective - Profit differentiation is evident, with AI-driven computing power boosting performance. Major telecom operators are seeing a slowdown in overall revenue growth, while small and medium enterprises continue to benefit from the AI-driven computing power segment. Revenue growth for the first half of 2025 is expected to be concentrated in the 0%-20% range, with an increase in the number of companies reporting positive growth. The variance in net profit growth is widening, with both high and low growth companies increasing [3] - Gross margins are under pressure, and management R&D expenditures have been reduced. The overall sales expense ratio has slightly decreased, which is expected to stabilize profit margins amid slowing revenue growth [3] - The quality of operations is improving, with accounts receivable as a percentage of revenue continuing to rise, indicating ongoing cash collection pressure. Small and medium enterprises are increasing their collection efforts, and capital expenditures have decreased, leading to an improvement in overall operating cash flow [3] Sector Breakdown - 5G-A is driving growth in front-end components, while AI-related network upgrades are expanding the market for optical modules and IDC support [4] - Telecom operators are facing pressure on traditional performance, but growth is being driven by household and government enterprise transformations [5] - Wireless supporting equipment is benefiting from revenue growth driven by enterprise network devices, although gross margins are under pressure [5] - Optical devices and fiber optic cables are supported by a solid fundamental basis, but valuations are subject to market sentiment fluctuations [5] - The IDC and CDN sectors are stabilizing, with IDC prices stabilizing and profit margins being released [5] - IoT modules are facing performance pressure, while smart energy is developing steadily [5] - The special network communication sector is seeing a recovery in orders at the bottom of the cycle, with smart manufacturing expected to benefit from an economic recovery [5]