With the issuance of 5G commercial license in June 2019, many provinces and municipalities have announced the 5G network construction plan, and gradually landed different scale 5G applications. Nomura Securities estimated that China's new 5G base station in 2019 was about 140 thousand stations. These connection scenarios bring huge demand for fiber optic cables.
"5G means the coming of all optical age. Fiber optic cable is an important cornerstone of 5G load. 5G scale business will spawn demand for optical fiber and cable." Zhuang Dan, executive director and chief executive of the long flight company, said in an interview with the economic news reporters in twenty-first Century. "With the formal issuance of the licences, the 5G capital expenditure plan of the three telecom operators will also be adjusted correspondingly with the changes in scale construction" scale test "and" scale commercial trial "to" comprehensive business use ". But the specific time point of demand release, that is, the time point for large-scale start-up, also needs to be determined according to the planning of 5G construction by operators.
Advance card 5G
In Zhuang Dan's view, in the next five years, with the scale construction of 5G, especially SA's independent network, the demand of the global optical fiber market is expected to grow steadily, and the optical fiber and cable industry in the 5G era will continue to improve. "5G takes the ideal of interconnection of everything into reality. Ubiquitous optical fiber network is an important cornerstone for building a new communication network in the new era of intelligence.
In the era of 5G, the three trends should not be ignored. First, the rise of cloud computing, 5G and the Internet of things has spawned a flood of data. The bandwidth and scale of the data center will continue to grow. The two is the long-distance transmission trunk and metropolitan backbone network to deploy 200G/400G or even higher capacity ultra high-speed optical transmission network. The three is automatic landing, financial securities, VR/AR and other local network low latency business to accelerate landing.
The application of these industries also accelerates the development of the forced optical fiber and cable industry, and brings new historical opportunities for the development of the optical fiber and cable industry.
Zhuang Dan introduces fiber optic cable as an important link in the industrial chain. It provides support solutions for 5G's high bandwidth, low latency and large connectivity application scenarios. The solution takes backbone, metropolitan area and access as the context, from wired to wireless, from urban to rural areas, covering a variety of 5G application scenarios.
Take the long fly company as an example, the new optical fiber G.654.E can extend the transmission distance between non relay stations in ultra high speed 400G system transmission, reduce the number of relay stations, reduce the overall construction and operation cost, meet the high bandwidth demand, provide micro tube micro cable, compact high-density optical cable and other solutions for the cable tension problem, meet the requirements of dense networking; provide a new multi-mode and opto electronic composite cable scheme for the wireless base station side to meet the requirements of the 5G network wireless access.
However, since 2019, the demand for the three major telecom operators has been slowing down. Due to the coming of the 5G construction cycle, the supply capacity of the suppliers has been reduced, and the shortage of the optical fiber preform has been alleviated. This will bring greater pressure to manufacturers without prefabricated rod production capacity. If the price continues for a long time, it does not exclude the integration of industries, and brings potential risks to delivery operators and quality.
Faced with challenges, self-discipline and rational return are particularly important. In the China Telecom's outdoor fiber optic cable centralized purchase in August 2019, the total purchase amount remained at the level of 2018. In terms of unit price, the actual bid price was about 69.55 yuan / core km (excluding tax), compared with the winning price of China Mobile, which had an increase of about 12.50%.
"We should take a rational view of this change," said Zhuang Dan. "Every industry will experience peaks and troughs. This is precisely the process of survival of the fittest." In the future, we will expand to the upstream of the industrial chain, force the field of 5G communication raw materials, extend to the downstream of the industrial chain, and the downstream applications and solutions will be the focus of further efforts.
"A+H" capital mode
Long Fei optical fiber is the first "A+H" listed company in the optical fiber cable industry chain. The dual core capital operation mode lays the technical and market foundation for the internationalization and diversification of the company.
After the listing of Hongkong in 2014, Chang Fei's overseas development accelerated and built production bases in Indonesia and South Africa. In 2018, the long fly company landed on A shares. The main products of the project were optical fiber preform and optical fiber. In Qianjiang, Hubei, the first prefabricated rod and optical fiber intelligent manufacturing factory was built, and the transformation from simple factory manufacturing to "intelligent manufacturing + service" mode was completed.
In terms of the difference between the A-share market and the H-share market, Zhuang Dan pointed out: "the structure of investors, the pool of funds, the level of free circulation and the degree of understanding of the industry in the A and H-share markets are different, and the valuation level of the A depends on the market. The participants in the A share market are mainly individual investors. They value the development trend of the company and the hot spots of the market. The investors of Hong Kong stock are mainly institutional investors. They value the long-term value investment, financial risk factors, the position of the company in the industry and the core competitive advantage, and the investment period is longer.
In terms of information disclosure, Hong Kong stock's letter and investor relations need to be fluent in standard English. Judging from the requirements of the information disclosure system, the Hongkong stock exchange pays more attention to the substantive judgement ability of the board and management when making decisions. "The Shanghai Stock Exchange is also heading in this direction, but based on the actual situation of the domestic capital market, the disclosure requirements of the Shanghai Stock Exchange are more detailed and quantified, which can provide clearer guidelines for the company to make decisions."
At that time, according to the information disclosed by Chang Fei when he returned to A shares, the purpose was to further optimize the corporate governance structure, promote the overall strategic layout of the company, and enhance the overall value of the company, thereby enhancing the market share and core competitiveness of the optical communications industry.
At the moment, Zhuang Dan said that the Shanghai Stock Exchange's standardized operation mode and strict corporate governance requirements provide the company with an opportunity to constantly improve its governance level. "In the global 5G development process, China is in a leading position, and our company will also benefit from the large-scale deployment of 5G. For overseas investors, 5G is a key investment area in the future. The internationalization level of the Shanghai Stock Exchange and the interconnection with more overseas capital markets will bring more potential investors to the domestic companies, and will also provide overseas investors with more opportunities to invest in Chinese assets.