We will strive to achieve 5G network coverage for all prefecture-level cities by the end of 2020. On May 17, the 2020 World Telecom and Information Society Day was held online. Chen Zhaoxiong, vice minister of the Ministry of Industry and Information Technology, said that China's 5G commercial use is accelerating, with more than 200000 5G base stations opened. Specifically, 1) strengthen innovation-driven to help scientific prevention and control of the epidemic; 2) speed up the pace of "new infrastructure", promote digital transformation, and strive to achieve 5G network coverage in all prefecture-level cities across the country by the end of 2020. Promote the integrated application of "5G +" vertical industries; 3) deepen network poverty alleviation, help win the fight against poverty, and ensure that the proportion of broadband access to poor villages exceeds 99% by the end of 2020.
At present, China Telecom Corporation and China Unicom have formally signed a 5G network co-construction and sharing agreement, and the two sides will jointly build and share station sites and spectrum resources, and will strive to complete the construction of 250,000 base stations nationwide by 2020. As of April, a total of 100000 5G base stations have been opened, 5G co-construction and sharing has been opened in 31 provinces across the country, and 5G has been officially commercialized in more than 50 cities.
Release series VR all-in-one machine, ultra-high performance-to-price ratio with rich content. The key new product "Little V all-in-one" released on Telecom Day is priced at 699 yuan, supports 4K 3500-inch screen viewing, and weighs about 300g, becoming the first VR all-in-one machine on the market that breaks through the thousand yuan price. The ultra-cost-effective and comfortable and lightweight wearing experience of the small V all-in-one is expected to lower the threshold for users and improve the internal conversion rate of existing telecom users. In addition, the company and NOLO, Pico, iQIYI, Inc. jointly launched a series of customized terminals (priced at 2000-4000 yuan to meet the needs of different levels of users), all of which have built-in Tianyi Cloud VR platform, which can directly experience popular games such as "Beat Saber" and "desperate Battlefield VR", further get through different hardware, and accelerate the popularization of Tianyi Cloud VR related applications.
Once again join hands with LGU+,5G+AR to become another important breakthrough for China Telecom Corporation in the field of 5G application. The company signed an AR cooperation agreement with South Korea's LGU+ to launch Tianyi cloud AR products on the basis of the original VR cooperation. As the first domestic application featuring live 3D short video, Tianyi AR relies on China Telecom Corporation's 5G network and uses the world's leading 8i light field modeling technology to achieve human modeling, establishing fan economy and copyright film and television short video ecology through stars to content. At present, the contents of the online / reserve are as follows: 1) AKB48 idol girl group AR image. Fans can use the product to co-shoot with their favorite idols, make short videos and share them to major social platforms with one click. Next, we will continue to produce domestic stars, idols, artists and other content. 2) different kinds of teaching content for adults and young people, such as dynamic dance courses and yoga courses for real AR, astronomy and geography courses for virtual cartoon characters, etc.
Investment suggestion: the company is the only A-share listing platform under China Telecom Corporation, with the dual attributes of both operators and Internet content operators. 5G time Company focuses on the three major directions of ultra-high definition, cloud games and cloud VR/AR, relying on the advantages of users, traffic and channels of the group's telecom operators, is expected to promote the rapid popularity of the three major 5G applications. It is estimated that the company's net profit from 2020 to 2022 is 2.31 billion yuan, corresponding to 0.13 trillion yuan and 0.29 billion yuan, corresponding to EPS (hotel business and travel business is expected to be greatly affected by the epidemic in 2020). Considering that compared with the traditional Internet platform, the biggest advantage of the company lies in the cost advantage, which makes it have a unique first-mover advantage in the early stage of 5G application, and maintain the "overweight-A" rating.
Risk tips: 5G construction speed is lower than expected, VR/AR hardware shipments are lower than expected, 5G user expansion is lower than expected, corporate governance risk.
