Investment Rating - The report suggests a positive investment outlook for the communication sector, particularly focusing on sub-sectors like optical communication and smart cards, which have shown better performance recently [1][10]. Core Insights - The communication industry is experiencing a downturn, with the overall index down by 0.78%, while specific sub-sectors like smart cards and optical devices have seen gains of 3.88% and 3.51% respectively [1][10]. - The integration of 5G and AI is expected to enhance profitability, with approximately 70% of the constituents in the 5G communication theme index having business related to 5G and about 76% related to AI [2][43]. - The report highlights a significant growth in revenue and net profit for the 5G communication theme index constituents, projecting a compound annual growth rate (CAGR) for revenue in the range of 10% to 30% over the next three years [2][45]. Summary by Sections 1. Weekly Market Performance - The communication sector index declined by 0.78%, while the overall market indices showed mixed results, with the Shanghai Composite down by 0.25% and the ChiNext up by 0.22% [1][10]. - Sub-sectors such as smart cards and optical devices performed well, with respective gains of 3.88% and 3.51% [1][10]. 2. Industry Development and Key Events - The global data center market is driven by AI, digitalization, and policy support, with the top ten data center service providers holding 59.5% of the total global resource capacity [24][26]. - The report notes a rapid increase in the proportion of large and super-large data centers in China, which are expected to dominate new constructions [26][30]. 3. 5G and AI Integration - The report emphasizes the high correlation between 5G and AI businesses, with a stable recovery in profitability observed [2][43]. - The constituents of the 5G communication theme index are projected to achieve a total revenue of CNY 1,788.51 billion in 2024, reflecting a year-on-year growth of 16.4% [2][45]. 4. Investment Recommendations - The report recommends focusing on high-quality stocks in sub-sectors with improving market conditions, particularly in optical communication and data centers [3][41]. - Specific companies to watch include Zhongji Xuchuang, New Yisheng, and Tianfu Communication, among others [3][41].

Market Overview - The Shanghai Composite Index rose by 0.28% to close at 3352.0 points, with a daily high of 3359.73 points [1] - The Shenzhen Component Index increased by 0.93% to close at 10197.66 points, reaching a high of 10222.81 points [1] - The ChiNext Index saw a rise of 1.65%, closing at 2029.45 points, with a peak of 2036.1 points [1] ETF Market Performance - The median return of stock ETFs was 0.58%, with the highest return from the Huaxia ChiNext 50 ETF at 2.82% [2] - The top-performing industry index ETF was the Yongying Guozheng Commercial Satellite Communication Industry ETF, yielding 2.73% [2] - The top strategy index ETF was the Huaxia ChiNext Low Volatility Value ETF, returning 1.33% [2] - The best-performing thematic index ETF was the Fuguo CSI Communication Equipment Thematic ETF, which achieved a return of 4.36% [2] ETF Performance Rankings - The top three ETFs by return were: - Fuguo CSI Communication Equipment Thematic ETF (4.36%) - Guotai CSI All-Share Communication Equipment ETF (3.9%) - Yinhua CSI 5G Communication Thematic ETF (3.21%) [5] - The three ETFs with the largest declines were: - Huaan CSI Shanghai-Hong Kong Gold Industry Stock ETF (-1.94%) - Yongying CSI Shanghai-Hong Kong Gold Industry Stock ETF (-1.79%) - ICBC Credit Suisse CSI Shanghai-Hong Kong Gold Industry Stock ETF (-1.74%) [6] ETF Fund Flows - The top three ETFs by fund inflow were: - Huaxia SSE 50 ETF (inflow of 1.471 billion) - Huatai-PB CSI 300 ETF (inflow of 622 million) - Huaxia SSE Sci-Tech Innovation Board 50 ETF (inflow of 620 million) [8] - The three ETFs with the largest outflows were: - Huaxia CSI Robot ETF (outflow of 416 million) - Huaxia SSE Sci-Tech Innovation Board Comprehensive ETF (outflow of 349 million) - Huaan ChiNext 50 ETF (outflow of 337 million) [10] ETF Margin Trading Overview - The top three ETFs by margin buying were: - Huaxia SSE Sci-Tech Innovation Board 50 ETF (554 million) - Huatai-PB CSI 300 ETF (364 million) - Guotai CSI All-Share Securities Company ETF (223 million) [11] - The highest margin selling amounts were: - Southern CSI 1000 ETF (39.97 million) - Huatai-PB CSI 300 ETF (21.88 million) - Southern CSI 500 ETF (16.99 million) [12] Institutional Insights - Everbright Securities noted that the communication sector still presents structural opportunities, with the long-term logic of operators remaining valuable and certain growth segments showing positive prospects [13] - Galaxy Securities suggested that the communication and new infrastructure sectors are likely to see upward revisions in expectations, driven by policies like Digital China and the continuous emergence of new AI applications [14]

Group 1 - The China Securities Regulatory Commission (CSRC) issued the "Action Plan for Promoting the High-Quality Development of Public Funds," which includes 25 measures aimed at optimizing the fee structure for actively managed equity funds and enhancing the alignment of interests between fund companies and investors [1] - Multiple free cash flow ETFs, including the Jiashi National Index Free Cash Flow ETF and the Fangzheng Fubon CSI All Index Free Cash Flow ETF, are set to be listed for trading on May 13 [1] - A significant redemption occurred in the Fuan Da CSI A500 Index Enhanced Fund, marking the first instance of large-scale redemptions for funds related to the CSI A500 Index [1] Group 2 - The market experienced a low open but closed higher, with the Shanghai Composite Index rising by 0.28%, the Shenzhen Component Index by 0.93%, and the ChiNext Index by 1.65%. The total trading volume in the Shanghai and Shenzhen markets was 1.29 trillion yuan, a decrease of 174.9 billion yuan from the previous trading day [2] - Key sectors that saw gains included aerospace, communication equipment, and transportation equipment, while only a few sectors like precious metals and fertilizers experienced declines [2] - Specific stocks such as Galaxy Electronics, Hainengda, and Sichuang Electronics reached their daily limit up, with communication equipment ETFs and 5G ETFs showing strong performance, with a peak increase of 4.36% [2] Group 3 - Several gold-related ETFs experienced collective declines, with the highest drop recorded at 1.94% [4] - The performance of various gold ETFs included a drop of 1.94% for the Gold Stock ETF 1 and a decrease of 1.79% for the Gold Stock ETF [4] Group 4 - The digital economy and new infrastructure policies are expected to bolster the upgrade of computing networks, with the communication and new infrastructure sectors likely to see upward adjustments in expectations [5] - The recovery of the ICT foundational optical network industry chain is anticipated to stimulate further demand for optical modules and energy-saving temperature control [5]