通信行业2025年投资策略：价值仍在，成长可期

Investment Rating - The report maintains an "Overweight" rating for the communication industry, indicating structural opportunities in 2025, particularly for operators and certain growth segments [15]. Core Insights - The communication sector has shown resilience with a steady profit growth of 5.8% year-on-year in Q2 2024, with net profits reaching CNY 794.53 billion [7]. - The report highlights the strong performance of sub-sectors such as optical modules and IoT sensors, with significant profit growth rates of 115% and 77% respectively in Q2 2024 [10]. - The report emphasizes that operators remain valuable investments due to improved free cash flow and increasing dividends, despite a decline in capital expenditures [15][29]. Summary by Sections 1. Communication Industry Review 2024 - The communication sector has rebounded with an 18.74% increase from January to September 2024, ranking fifth among major sectors [5]. - The overall net profit for the communication industry in Q2 2024 was CNY 794.53 billion, reflecting a 5.8% year-on-year increase [7]. 2. Focus on Network Application Investment Opportunities - The report identifies ongoing structural opportunities in the communication sector for 2025, particularly in operators and IoT sensors [15]. - The long-term logic for operators remains intact, with a focus on improving cash flow and dividend increases [15][17]. 3. Operators - The report notes that 5G construction is nearing completion, with a projected total of 4.6 million 5G base stations by the end of 2024 [21]. - Operators are expected to increase dividends significantly, with a target cash dividend payout ratio of over 75% in the next three years [32]. 4. IoT Sensors - The global cellular IoT connections reached 3.5 billion in 2023, with significant growth expected in 5G connections [37]. - The report highlights the increasing demand for sensors across various industries, driven by advancements in IoT and 5G technologies [46]. 5. Optical Modules - The optical module market is projected to grow rapidly, driven by AI investments and increasing demand for high-speed data transmission [55]. - The report forecasts a compound annual growth rate (CAGR) of 47% for AI-related optical modules from 2023 to 2028 [55]. 6. Valuation Analysis - As of September 30, 2024, the communication sector's TTM-PE is at 20X, significantly below the ten-year average of 36X, indicating potential undervaluation [66]. - The report notes that the valuation of operators is below historical averages, primarily due to sustained profit growth [69].