Fire Communication (600498): Large share wins bid for telecommunication second-phase centralized mining industry marginal improvement

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Fire Communication (600498): Large share wins bid 杭州桑拿网 for telecommunication second-phase centralized mining industry marginal improvement

1. China Telecom ‘s 100G DWDM / OTN (second batch) centralized light transmission market has improved overall margins, and the company won the first bid. Participants: We believe that the first three quarters of 2019 have been lower than market expectations.The performance of related industry chain companies is under pressure.

The scale of this purchase shows that China Telecom’s second-stage centralized procurement scale is much larger than that of the first stage, which verifies that the overall expansion of the optical transmission market has improved marginally.

  20Hotcom won the bid for the first candidate at a price of about 2 billion. The OTN business is the profitable entity in the company’s communication system sector. The first part of the bid for China Telecom’s 100G DWDM / OTN equipment will focus on 2020Improved performance.

  2. The optical fiber and cable business is expected to bottom out in 2020, and the performance of the beacon star is expected to continue to grow rapidly: The overall optical fiber and cable industry is affected by changes in demand in 2019, and the price has increased compared to 2018. We judge that the scale of optical fiber and cable demand in 2020Even worse, although there is pressure on the supply side of the light rod, the price is expected to bottom out.

  Beacon Star Sky benefits from the overall development of the information security industry.

It is expected that the information security business of Fiery Starfield will maintain a high level of growth rate in 2020, thereby driving the company’s overall profit level to increase.

  3. Broadcasting and TV and state grid cooperation in 5G construction, fiber optic cable and optical transmission market is expected to bring new volume, the company’s industry as a whole is stable.

  4. Investment suggestion: According to the leading level of the Fiberhome communications industry, we estimate that the company’s net profit attributable to its mother in 2019-2021 will be: 8.

800 million, 9.

800 million, 11.

80,000 yuan, maintaining revenue and net profit attributable to mothers unchanged, corresponding to the current price of PE are 35.

4 times, 31.

7 times, 26.

5 times, maintaining the “overweight” level.

  5. Risk reminder: The actual investment in optical transmission has fallen short of expectations; the expansion of the information security industry has fallen short of expectations; the price of optical fiber and optical cables with excess production capacity has continued to fluctuate