Investment Rating - The report maintains a "Buy" rating for key companies in the optical communication sector, including Zhongji Xuchuang, Xinyi Sheng, and Tianfu Communication [11]. Core Insights - The optical communication industry is entering a new phase driven by substantial demand for AI computing power, leading to an earlier-than-expected market recovery [1][24]. - The industry is transitioning into an era of "delivery assurance," where delivery capability becomes the core competitive advantage, replacing the previous focus on order acquisition [3][28]. - The report highlights the structural shortage of upstream core chips and key materials, which is impacting the delivery of optical modules [27][29]. Summary by Sections Market Recovery - The optical communication market is showing signs of early recovery due to continuous additional orders from overseas manufacturers [2][25]. - The demand for computing power is expected to grow, with significant order clarity for 2026 and 2027 [27]. Industry Trends - The industry is shifting from a "competing for orders" model to a "delivery assurance" model by 2026, emphasizing the importance of delivery capabilities [3][28]. - The report notes that leading companies will leverage their supply chain management and scale advantages to thrive in this new environment [7][28]. Challenges - The production of optical modules faces challenges due to the complexity of the manufacturing process and the long lead times from order to delivery [29]. - There is a structural shortage of optical chips and devices, which is exacerbating supply chain issues [27][29]. Key Companies to Watch - The report recommends focusing on leading companies in the optical module sector such as Zhongji Xuchuang and Xinyi Sheng, as well as other key players in the optical device market [8][28].

Core Insights - The "2025 Beijing Unicom Dual Ten Thousand Megabit AI Empowerment Action" conference highlighted significant advancements in 5G-A infrastructure in Beijing, with nearly 16,000 5G-A base stations and over 9,000 OTN all-optical ten-gigabit nodes established, enhancing the city's digital, network, and intelligent capabilities [1] - 2024 is recognized as the "commercialization year of 5G-A," with a tenfold improvement in network capabilities over 5G, prompting increased efforts from industry regulators and operators to promote 5G-A applications [1] - Beijing is positioned as a leading area for 5G-A deployment, with plans to build or upgrade over 35,000 5G-A capable base stations by the end of 2027, ensuring comprehensive coverage within the city's Fifth Ring Road [1] Industry Developments - Beijing Unicom has covered over 50% of residential areas in the city with ten-gigabit broadband, reaching nearly 5,000 communities, and has surpassed 1.5 million 5G-A users [2] - The company launched its first large-scale 5G-A smart network in 2024, with over 6,000 stations providing extensive coverage in key areas such as sports venues, schools, and shopping districts, achieving an overall effectiveness rate of over 85% for 5G-A [2] - Testing along a 12-kilometer route showed a 96% effectiveness rate for 5G-A, supporting high-demand applications like immersive video and cloud gaming [2] Technological Advancements - Beijing Unicom has deployed the world's fastest 5G-A subway network on Line 3, achieving peak downlink speeds of 2.4 Gbps and an average downlink speed of approximately 1.5 Gbps, suitable for 4K video streaming and large file transfers [3] - 5G-A is being integrated with AI to enhance various applications, such as providing high-definition meeting experiences and enabling multi-angle live sports broadcasts [3] - Future expectations include strengthening network infrastructure, driving industrial innovation, and enhancing key technology research and development [4] Future Outlook - The Beijing Economic and Information Technology Bureau expects Beijing Unicom to increase network construction efforts, achieving widespread coverage of 5G-A base stations and ten-gigabit optical networks [4] - There is a focus on leveraging the core technological potential of 5G-A and F5G-A, with applications in areas like water monitoring, intelligent vehicle-road collaboration, and new industrialization [4] - The aim is to establish a complete industrial ecosystem involving chips, modules, terminals, and equipment, while steadily progressing towards 6G and maintaining Beijing's competitive edge in global communication technology [4]