Guangsha Network joins China Mobile 5G Lianchuang Center Wwanda Communication Construction Market is worth looking forward to

Recently, the most popular thing in the communications industry is probably: to welcome the arrival of the 5G era.

On August 31, the “5G High Frequency International Forum and Industry Promotion Conference” jointly organized by China Mobile Communications Corporation and China Electronics Technology Group Corporation was held in Chengdu under the guidance of IMT-2020 (5G) Promotion Group.

At this conference, China Mobile's 5G Joint Innovation Center was awarded as an industry partner to bring together vertical industry and related fields to jointly promote 5G commercial development.

Li Zhuang, Chairman of Guangsha Network, and Yang Guang, Deputy Director of Wireless and Terminal Technology Research Institute, China Mobile Research Institute

Represented by Ericsson, Huawei, Datang, etc., the companies joining the Lianchuang Center are among the best in the 5G industry chain, including the newly joined new three-board enterprise, Guangsha Network (430128.OC).

According to the annual reports of the three major operators, as of the end of 2016, there were 3.136 million 4G base stations in China. The high-performance requirements of 5G for communication base stations are much higher than 4G, which is the Guangsha network for communication network infrastructure services. Brought new development opportunities.

5G is coming, trillion market space is open

According to industry insiders, it will enter the large-scale construction test in 2018, and will enter the pre-commercial phase in 2019. By 2021, the 5G networks of the three major operators can cover the whole country.

Compared with 4G technology, 5G networks have stronger performance and support ultra-high-speed, ultra-low latency, and ultra-dense connection scenarios. In Guangdong Mobile's 5G field environment, the 5G network rate is stable at 2Gbps or above, which means that "seconds" HD movies have been realized.

Millimeter wave technology is the key to 5G in achieving transmission rates that are more than ten times faster than 4G. The millimeter wave refers to an electromagnetic wave with a wavelength of the order of millimeters. Its frequency is between 30 GHz and 300 GHz. It makes the spectrum bandwidth 10 times higher than before, and the transmission rate is greatly improved, and the fastest can achieve 1 Gb/s.

However, another characteristic of the millimeter wave band is that it has a large attenuation in air and a weak diffraction ability. In other words, it is almost impossible to achieve signal penetration through a millimeter wave. This means that 5G mobile communication will not be able to rely on the deployment structure of large base stations, and a large number of small base stations will become a new trend to cover the peripheral communication that large base stations cannot reach.

According to China Merchants Securities 600999, the stock statistics: "At present, China's existing 4G macro base station is about 3 million. It is expected that the three major operators will add 600,000 4G macro base stations in 2017. By then, China's 4G wide coverage will basically end.

The Ministry of Industry and Information Technology stipulates that the spectrum planning of 5G macro base stations is 3.3~3.6GHz and 4.8~5GHz, which is not much improved compared with 4G's 2.1-2.6Ghz. Beamforming technology of large-scale antennas can be used to compensate for signal space propagation loss caused by frequency band increase. Therefore, the number of 5G macro base stations will not increase significantly compared with 4G. It is estimated that 5G macro base stations will need 3 million full coverage, and the investment amount will reach 900 billion yuan. "

In the small base station: in the 4G era, 20% of the transmitting base stations generated 80% of mobile data traffic, mainly concentrated in large cities with large populations. It is assumed that the 5G era follows the same law, and the small base station is aimed at a large-capacity scenario. Then, the small base station is mainly deployed for about 600,000 hotspot macro base stations.

Assuming that the distance between a single hotspot macro base station is 500 meters and the distance between small base stations is 20 meters, and the small base station only needs to cover 30% of the hotspot macro base station area, then a single hotspot macro base station needs about 187 small base stations; 600,000 hotspot macro base stations total It requires 112 million small base stations. Assuming that the cost of a single small base station is 1,000 yuan, the total investment of small base stations is about 112 billion yuan. It is worth noting that this part is an added market.

First benefit in the field of network planning

Every iteration of communication technology, regardless of company performance or stock price trends, the first benefit is the network planning field, which has been well verified in the previous 4G reform process.

Take the two companies on the A share as an example. Fuchun Co., Ltd. (SZ:300299) is a typical enterprise on the main board for communication network planning and design services. Watching its monthly K-line chart, the stock price of Fuchun shares remained at 8-20 yuan/share before 2014, but since the beginning of 2014, the stock price has been going all the way up until the end of 2015, reaching 59.3 per share. The peak of the yuan.

Fuchun shares monthly K-line chart

After reading the performance of the company in the past two years, the company's performance in the past two years increased by 22.09% in 2014 and 69.79% in 2015. It is a steady development, but it is difficult to explain the stock price behavior only from the perspective of operation. The only reasonable answer is: 2014 is the first year of 4G development, and the second year is the 4G outbreak period. As the earliest 4G concept stock, Fuchun shares have been favored and favored by many investors under the impetus of investment boom.

Fuchun shares are not isolated. Jiesai Technology 002544, which also engages in information network construction technology services, has experienced similar historical developments. In 2014, revenue increased by 15.55% year-on-year, and in 2015, it increased by 17.82%. Normal however. The stock price ushered in a massive outbreak during the period of 2014-2015, and it has been going downhill since the heat fell, now it is 20 yuan per share.

Jesse Technology Month K Line Chart

History will not repeat, but will rhyme. How to choose a quality and cheap target at the right time is a major test for investors. According to the logic of the network planning field and the steady increase in performance, Guangsha Network (430128.OC), a company on the New Third Board, may stand out.

Compared with the above two companies, Guangsha Network has a small scale, but its revenue growth is rapid, and its gross profit margin is higher than that of Jiesai Technology. Another very important point is that its net profit is only three times lower than that of Jesse Technology and Fuchun. The market value is far lower than the two companies. Obviously, the Guangsha network is underestimated.

What is the basic value of this undervalued company? Read Jun to analyze.

Guangsha network stepped on the air outlet

Guangsha Network entered the communication industry in 2006, and listed the new three board in July 2012, mainly for China Mobile, China Unicom, China Telecom, and China Tower. In the 2015 and 2016 annual reports: sales to China Mobile The income was 45.62% and 65.70% respectively (including China Railcom).

Unlike other peers who understand only one of the locations in network planning, such as site selection, construction or maintenance, Guangsha Network has a “one-stop” service capability. Specifically, it is based on the operator's construction needs, matching resources or selecting a new suitable site, thereby providing services such as communication network base station, equipment room selection, design, construction, operation and maintenance, etc., completely solving mobile signal coverage. problem.

The "one-stop" service capability enables Guangsha to deeply understand the different requirements of the operators for the construction of base stations. While improving its own construction team and service system, it greatly improves the efficiency and success rate of base station construction.

In the 2016 annual report, we can see that Guangsha's network business scope is mainly in Beijing, radiating four major economic circles in North China, East China, South China and Southwest China. It has accumulated more than 6,000 buildings, communication towers and other buildings for construction. The address of the communication base station and the equipment room.

On the other hand, Guangsha Network set up a subsidiary to cut into IDC business in 2014, and has now established IDC machine rooms in Changping and Yizhuang. However, after all, it is still in the early stage of development and still has some losses. In 2016, the subsidiary's revenue was 12.58 million yuan, the net profit was negative of 20.3 million yuan, and the profit attributable to the parent company was 10.35 million yuan. This directly cuts the company's net profit attributable to listed company shareholders in the past two years.

However, even if the newly developed business has not yet returned, the company's net profit at home is still growing at an annual rate of more than 30%.

The reason for this is mainly due to the steady advancement of network planning services. Now, the communication network service team of Guangsha Network has the site selection and construction capacity of up to 1000 new sites every year.

Guangsha Network officially joined China Mobile's 5G Joint Innovation Center, which is beneficial to the development of more cutting-edge technologies, helping to innovate and better meet the needs of the 5G market.

Faced with the large-scale construction needs of the 5G commercial era, Guangsha Network has sufficient capacity and professional level to solve the problem of national base station layout for operators. By then, it will usher in a new round of growth.

(Editor: HN666)