Guoxin Securities·2025-11-03 09:20Investment Rating - The report maintains an "Outperform" rating for the communication industry [5] Core Viewpoints - The communication industry is experiencing robust growth driven by AI investments, particularly in the optical communication sector, which has shown significant profit increases [2][4] - The overall revenue and net profit for the communication industry (excluding operators) grew by 19.57% and 33.69% year-on-year in the first three quarters of 2025, respectively [2][42] - The report highlights a positive outlook for AI infrastructure, with recommendations to focus on optical devices, communication equipment, and liquid cooling technologies [4] Summary by Sections Market Performance - In October, the communication sector index fell by 0.45%, aligning closely with the broader market performance, ranking 20th among 31 primary industries [12][17] - The average PE ratio for the communication sector was 23.2, indicating a recovery from historical lows [17][22] Fund Holdings Analysis - As of Q3 2025, the market value of funds heavily invested in the communication sector reached 288.6 billion yuan, accounting for 7.14% of total fund holdings, with a 3.2 percentage point increase from the previous quarter [30][34] - The concentration of fund holdings in the top ten communication stocks increased, with significant preferences for optical modules and communication devices [35][40] Financial Performance - In Q3 2025, non-operator communication companies reported total revenues of 185.1 billion yuan, a 19.47% increase year-on-year, and net profits of 16.7 billion yuan, up 47.4% [2][42] - The optical module sector led revenue growth with a 63.5% increase, while profit growth was particularly strong in optical modules and AI-driven devices [43][51] Company-Specific Insights - Major companies like Zhongji Xuchuang and Xinyi Sheng reported substantial revenue and profit increases, benefiting from the growing demand for AI-related products [51][58] - The three major telecom operators showed slower growth, with net profit increases outpacing revenue growth, indicating a shift towards digital and innovative business models [49][58]