According to the Zhixun Finance APP, from July 22 to 23, the State-owned Assets Supervision and Administration Commission of the State Council held a seminar for heads of central enterprises. The meeting emphasized the continued breakthrough of emerging industries, the deepening of strategic emerging industries and future industrial development, the continuous promotion of high-end, intelligent and green development of industries, and the comprehensive implementation of the "AI +" special action. CITIC Securities research report believes that since 2024, the AI industry has developed rapidly, and domestic cloud providers, operators, and others have continued to increase their investment, with three major operators jointly launching a procurement of 31 billion AI servers. The domestic computing power and network equipment industry chain is entering a period of accelerated development. Relevant targets: ZTE (00763), China Mobile (00941), China Telecom (00728), China Unicom (00726).

In 2024, AI large models are rapidly iterating in various fields and continue to make breakthroughs. The release of overseas AI large models such as Sora and Claude3 has allowed the market to see the rapid iteration of artificial intelligence and the broad application prospects. Computing power, as the foundation, is expected to reflect the improvement of industry prosperity on the demand side first.

In recent years, the government has repeatedly issued policies to support the construction of computing power infrastructure. Previously, the Ministry of Industry and Information Technology, the Cyberspace Administration of China, the Ministry of Education, the National Health Commission, the People's Bank of China, and the State-owned Assets Supervision and Administration Commission jointly issued the "Action Plan for High-quality Development of Computing Power Infrastructure". By the end of 2023, 30 intelligent computing centers will be built, and by the end of 2025, 50 will be built, and the scale of computing power will exceed 300 EFLOPS, with intelligent computing power accounting for 35%.

Various places have also issued relevant policies to support the construction of computing power infrastructure. From the central to the local level, the trend of the industry is continuously strengthening, which may accelerate the construction of intelligent computing centers in various places.

"Shanghai Smart Computing Pujiang Action Implementation Plan (2024-2025)" was jointly issued by Shanghai Municipal Communication Administration and 11 departments on March 22. The "Implementation Plan" clearly states that by 2025, the city's intelligent computing capacity will exceed 30 EFLOPS, accounting for more than 50% of the total computing power, and the proportion of domestically-made computing chips and storage used in new smart computing centers in the city will exceed 50%.

On the same day, Guangdong Provincial Communication Administration and nine other departments issued the "Guangdong Province's Action Plan for the High-quality Development of Computing Power Infrastructure and the 'Yuesuan' Action Plan (2024-2025)". It is proposed to reach a computing power scale of 38 EFLOPS by 2025, with intelligent computing power accounting for 50%. It is striving to increase the proportion of new domestically-made computing power to 70% by the end of 2025, and to basically form a supply system and supply system of computing, transportation, and storage resources that are compatible with the digital development needs of Guangdong's economy and society.

In addition, on July 23, Hangzhou issued a notice supporting the high-quality development of the entire industrial chain of artificial intelligence. It mentioned support for computing power technology tackling key problems, encouraged enterprises to carry out key technology research and development in computing power, and provided support at the municipal level in accordance with relevant policies. It also increased financing interest rate support. For newly-built computing power infrastructure construction projects included in the government unified layout, it encouraged cooperative banks to set up discounted interest rate credit funds to provide loans for computing power infrastructure construction projects, and support financing of computing facilities such as servers through mortgage financing.

The notice also mentioned the expansion of "computing power coupons" distribution. The total amount of "computing power coupons" is increased to 250 million yuan annually, and new "computing power coupons" are added to support companies to purchase intelligent computing centers that comply with the planning and layout of Hangzhou and intelligent computing power supplied by cooperative partners included in the computing power matchmaking. The "computing power coupons" provide subsidies to user companies not exceeding 30% of the computing power contract cost.

Changjiang Securities stated that various local policies are increasing the construction of computing power infrastructure, and it is optimistic that domestically-made computing power will rise in all respects. At the critical stage of digital transformation, the construction of infrastructure such as computing power will accelerate under policy support. At the same time, it is expected that there will be more computing power support policies and government intelligent computing centers will be established.

CITIC Securities research report believes that since 2024, the AI industry has developed rapidly, and domestic cloud providers, operators, and others have continued to increase their investment, with three major operators jointly launching a procurement of 31 billion AI servers. Against the background of US export restrictions and domestic manufacturers' technological progress, the domestic computing power and network equipment industry chain has ushered in a period of accelerated development. Focus on the opportunities in the domestic exchange and chip industry chain, high-speed connectors, optical modules, AIDC, liquid cooling and other industries.

Guohai Securities research report pointed out that the growth of AI computing power demand driven by large model training has continued, and various links of the computing power industry chain such as AI chips, server and components, optical modules, IDC, etc. are expected to continue to benefit.

Related concept stocks:

China Unicom (00726): China Unicom Chairman Liu Lihong pointed out that China Unicom has upgraded Unicom Cloud comprehensively, actively exploring breakthroughs in computing, storage, and network performance, providing more types, higher performance, more cost-effective, lower latency, and more reliable computing power supply. Continuously increasing the scale of computing resources, Unicom Cloud covers more than 200 cities with "one city, one pool".

ZTE (00763): ZTE's intelligent cloud card DPU flexibly unloads basic services such as virtualization, network, storage, and security, maximizing computing power efficiency; the entire series of server and storage products support liquid cooling, GPU, and 400G bandwidth; data center switches are based on ZTE's self-developed high-performance switching, forwarding, CPU chips, and bandwidth smoothly evolves from 400G to 800G.

China Mobile (00941): China Mobile will launch a new "capability + computing power" package that can be flexibly configured and freely combined. At present, it has built a "3+2+1" computing power terminal product system. "3" refers to the development of three thin terminal products: cloud phones, cloud computers, and mobile cloud high-definition. "2" refers to the development of two types of fat terminal products: prosperity-shop computing power hosts and computing power home hosts. "1" refers to the development of a unified cloud OS platform, realizing the unified management and resource scheduling of computing power terminal products.

China Telecom (00728): China Telecom currently has more than 700 data centers, more than 3,000 edge computing centers, 0.513 million IDC racks, and the rack utilization rate has surpassed 70%. By the end of 2023, China Telecom's total computing power scale is expected to reach 6.2 eflops.