Group 1: Cloud Industry Insights - The four major North American cloud providers reported a total capital expenditure (capex) of $77.3 billion, representing a year-on-year increase of 62% [1] - Companies like Google, Amazon, and Microsoft maintained their optimistic capex guidance for 2025, while Meta raised its full-year capex guidance from $60 billion-$65 billion to $64 billion-$72 billion, alleviating market concerns [1] - The report suggests focusing on stocks with strong performance growth and low valuations for Q1 2024 and 2025, quality dividend assets in telecom operators, and sectors like military communication and submarine cables that may see performance and valuation recovery [1] Group 2: Consumer Sector Outlook - The consumer sector is experiencing a recovery, with steady growth in holiday consumption across most provinces and cities, driven by trade-in programs and emotional value consumption [2] - Increased travel willingness and diversified cultural tourism consumption are noted, alongside a boost in inbound tourism due to tax refund policies [2] - The report remains optimistic about the gradual improvement of the consumer sector's fundamentals and the revaluation of leading companies by 2025, supported by consumption stimulus policies [2] Group 3: Aviation Industry Forecast - The aviation industry is expected to see a rise in both volume and price, with increased international flight schedules and domestic demand being stimulated by the "924" policy [3] - The demand for civil aviation travel is anticipated to be further released in 2025, supported by an improved supply-demand balance and favorable oil and exchange rates [3] - The market is expected to open up further for ticket pricing, leading to enhanced profitability for airlines [3]

Investment Rating - The report maintains a rating of "Buy" for the industry, specifically recommending the computing power sector and military communication [4][9]. Core Viewpoints - The release of tariff exemptions is expected to alleviate concerns in the optical communication sector, leading to a potential valuation recovery for companies like Zhongji Xuchuang, Xinyi Sheng, and Tianfu Communication, which have international production capabilities [2][21]. - Domestic demand for computing power continues to grow, driven by significant investments from major internet companies and telecom operators, indicating a sustained narrative for AI growth [3][22]. - Military communication companies are anticipated to benefit from geopolitical tensions and increased defense budgets, with firms like Jiexun Feihong and China Satcom positioned to gain [23]. Summary by Sections Investment Strategy - Focus on the computing power and military communication sectors, recommending companies such as Zhongji Xuchuang, Xinyi Sheng, Tianfu Communication, and military firms like Jiexun Feihong and China Satcom [4][12]. Market Review - The communication sector experienced a decline, with the operator index performing relatively better compared to other segments [16][19]. Tariff Impact - The U.S. Customs and Border Protection announced tariff exemptions for specific communication electronic products, which is expected to positively impact the optical communication industry [20][21]. Computing Power Demand - Major companies like Alibaba and ByteDance are significantly increasing their investments in AI infrastructure, indicating a robust growth trajectory for domestic computing power demand [3][22]. Key Companies - Recommended stocks include Zhongji Xuchuang, Xinyi Sheng, Tianfu Communication, and military communication firms such as Jiexun Feihong and China Satcom, among others [4][9].

Investment Rating - The report maintains a rating of "Buy" for the industry, specifically recommending the computing power sector and military communication [4][9]. Core Insights - The release of tariff exemptions is expected to alleviate concerns in the optical communication sector, leading to a potential recovery in valuations. Companies with overseas production capabilities will have a tax rate advantage, while those with international layouts will be less impacted by tariff uncertainties [2][21]. - Domestic demand for computing power continues to grow, driven by significant investments from major internet companies and telecom operators. The AI narrative remains strong, indicating explosive growth in computing power demand [3][22]. - Military communication companies are anticipated to benefit from geopolitical tensions and increased defense budgets, as national security strategies drive demand [23]. Summary by Sections Investment Strategy - Focus on the computing power and military communication sectors, recommending companies such as Jiaxun Feihong, China Communication Construction, China Satellite, and Haige Communication, along with optical module leaders like Zhongji Xuchuang, Xinyi Sheng, and Tianfu Communication [4][12]. Market Review - The communication sector experienced a decline, with the operator index performing relatively better compared to other segments. The overall market sentiment improved following government announcements of stock buybacks and support measures [16][19]. Key Companies and Recommendations - Key companies recommended include Zhongji Xuchuang (300308.SZ), Xinyi Sheng (300502.SZ), Tianfu Communication (300394.SZ), and others in the computing power and optical communication sectors. The report suggests monitoring companies like Weiteng Electric, which have seen significant price drops but possess growth potential [4][9][12]. Future Outlook - The report emphasizes the ongoing investment in AI infrastructure, with major players like Alibaba and ByteDance planning substantial expenditures over the next few years. The anticipated growth in AI and computing power is expected to drive the market forward [3][22][39].