Minsheng Securities·2025-05-20 09:59Core Views - The report emphasizes the dual main lines of "domestic substitution + computing power upgrade" in the communication industry, highlighting the strong performance of domestic companies in light communication, computing power, optical fiber and submarine cables, commercial aerospace, IoT, and operators [2][3]. Light Communication - Domestic and international giants are expected to maintain high capital expenditures (CAPEX) driven by the expansion of computing power clusters, which will promote upgrades in data center interconnect (DCI) technology. Focus is recommended on light modules and optical devices with strong performance certainty, as well as the acceleration of domestic substitution in the optical chip sector. The global demand for 800G remains robust, with a steady upgrade to 1.6T. Suggested companies include Zhongji Xuchuang, Xinyi Sheng, Tianfu Communication, Taicheng Light, and Yuanjie Technology [3][5][13]. Domestic Computing Power - The performance improvement of domestic computing power chips, coupled with increased capital expenditures from domestic internet companies (e.g., Alibaba, Tencent), supports the domestic AI industry chain. The adoption of CPO and liquid cooling technologies is expected to reduce costs and improve efficiency. The demand for copper connections is driven by NVIDIA's GB200 architecture, with domestic manufacturers expanding production capacity and increasing demand for servers, switches, and supporting equipment. Recommended companies include Gaolan Co., Runze Technology, Guanghuan New Network, Hesheng New Materials, Ruijie Networks, ZTE Corporation, Unisoc, and StarNet Ruijie [3][36]. Optical Fiber and Submarine Cables - The peak season for submarine cable delivery is starting, with policies for deep-sea wind power catalyzing demand. AI-driven DCI is expected to increase the demand for hollow-core optical fibers, with pilot applications by Microsoft and China Telecom. Companies to watch include Zhongtian Technology, Hengtong Optic-Electric, and Changfei Fiber [3][69]. Commercial Aerospace - The commercial aerospace sector in China is expected to experience a dual industrial inflection point this year, with new model large-capacity rockets beginning validation in June to undertake subsequent major satellite constellation launch tasks. The construction of space-based systems is accelerating, and the trillion-yuan market for low-orbit ground applications is set to officially launch this year. Suggested companies include Haige Communication, Shanghai Hanhua, and Zhenyou Technology [3][4]. Internet of Things (IoT) - The demand for modules and controllers is recovering, with emerging application scenarios (smart driving, robotics) contributing incremental growth. The E-Call industry policy is expected to accelerate the rollout of in-vehicle intelligent safety solutions. Recommended companies include Huihan Co., Boshijie, Guanghetong, Yiyuan Communication, and Meige Intelligent [3][83]. Operators - High dividend defensive attributes are prominent, with accelerated investments in computing networks and increased dividend rates. Recommended companies include China Mobile, China Unicom, and China Telecom [3][4].