Changjiang Securities·2025-09-02 09:45Investment Rating - The report maintains a "Positive" investment rating for the communication industry [10]. Core Insights - The communication sector has shown strong performance, with a 12.16% increase in the 35th week of 2025, ranking first among major industries in the Yangtze River region. Year-to-date, the sector has risen by 62.16% [2][5]. - Alibaba's cloud business revenue for FY26Q1 reached 334 billion yuan, a year-on-year increase of 26%, with AI-related product revenue growing for eight consecutive quarters at triple-digit rates. Capital expenditures surged over twofold year-on-year [6][8]. - NVIDIA's network business revenue for FY26Q2 increased by 46% quarter-on-quarter, driven by strong demand in the Chinese market and global computing investments [7][8]. Summary by Sections Market Performance - In the 35th week of 2025, the communication sector rose by 12.16%, leading the Yangtze River region industries. Since the beginning of the year, it has increased by 62.16% [2][5]. - Among companies with a market capitalization over 8 billion yuan, the top gainers were Tianfu Communication (+61.5%), Changfei Fiber (+55.4%), and Cambridge Technology (+41.4%). The largest decliners were Dongxin Peace (-14.2%), Mengwang Technology (-13.3%), and Hengbao Co., Ltd. (-9.2%) [5]. Company Performance - Alibaba's FY26Q1 financial report showed total revenue of 247.7 billion yuan, a 2% year-on-year increase, and a net profit of 40.7 billion yuan, up 67% year-on-year. The cloud business revenue was 334 billion yuan, with significant growth in AI products [6]. - NVIDIA reported FY26Q2 revenue of $46.7 billion, a 56% year-on-year increase, with data center revenue at $41.1 billion, also up 56% year-on-year. The network business revenue reached $7.3 billion, reflecting a 46% quarter-on-quarter increase [7]. Investment Recommendations - The report recommends several companies based on their performance and market potential: - For operators: China Mobile, China Telecom, China Unicom - For optical modules: Zhongji Xuchuang, Xinyi Sheng, Tianfu Communication - For liquid cooling: Yingweike - For fiber optic cables: Fenghuo Communication, Hengtong Optic-Electric, Zhongtian Technology - For domestic computing: Runze Technology, Guanghuan New Network, Aofei Data - For AI applications: Heertai, Tuobang Co., Ltd., Yiyuan Communication - For satellite applications: Haige Communication, Huace Navigation [8].