According to Zhito Finance APP, GF SEC has released a Research Report stating that the annual work meeting of the three major operators has been held, emphasizing reform and innovation, and strengthening high-quality development. Since this week, the three major operators have consecutively held their work meetings for 2025, highlighting the comprehensive strengthening of new infrastructure construction, continuing reform and innovation, and stressing the importance of subsequent high-quality development. The fundamentals of the operators are expected to bottom out in 2024, with stabilization and recovery anticipated in 2025. Continued recommendation of investment opportunities in operators with low volatility dividend assets against a backdrop of ample liquidity.

GF Securities' main points are as follows:

Summary of the meeting content:

(1) Comprehensive strengthening of new infrastructure construction: CHINA MOBILE proposed to solidify the leading advantage of new information infrastructure, accelerate the release of AI+ scale effects, cultivate growth momentum in emerging fields, and continuously promote value creation and steady growth. CHINA TELECOM proposed to continue in-depth implementation of the cloud reform and digital transformation strategy. China United Network Communications proposed to comprehensively strengthen new infrastructure construction; enhance interconnected communication, computing network intelligence, and global infrastructure construction, and improve infrastructure operational efficiency.

(2) Continuing reform and innovation: CHINA MOBILE proposed to vigorously promote the deep integration of technological innovation and industrial innovation, focusing on tackling key core technologies. CHINA TELECOM pointed out to concentrate state-owned capital on strategic emerging industries. China United Network Communications indicated the need to comprehensively promote the integration and innovation of digital technology. Accelerate the advancement of high-level technological independence and self-reliance, and the "5+5" key projects of the new industries.

(3) Strengthening high-quality development: CHINA MOBILE proposed to firmly grasp high-quality development as the primary task, treating market-segmented stock operation and value operation as strategic long-term tasks, continuously promoting value creation and stable growth. CHINA TELECOM proposed to achieve high-quality development around six aspects: strengthening high-quality technological innovation, strengthening high-quality product service supply, enhancing risk prevention, and strengthening reforms in key fields. China United Network Communications indicated that the "Ten Focus Areas" will run through the annual work priorities, striving to push for a greater leap in the high-quality development of the enterprise.

The fundamentals of the operators have basically bottomed out, and there is hope for stabilization and recovery in 2025.

On December 23, the Ministry of Industry and Information Technology released the economic operation situation of the communication industry for the first 11 months of 2024. Telecom service revenue has steadily increased, with a cumulative revenue from January to November (comparable to the sum of the three major operators' revenues) showing a year-on-year growth of 2.6%, maintaining stability at 2.6% for two consecutive months, indicating clear signs of stabilization. Revenue from mobile data traffic services from January to November decreased by 1.3% year-on-year, with a narrowing decline; revenue from fixed broadband services increased by 5.0% year-on-year, with stable growth; revenue from emerging businesses saw a year-on-year growth of 7.9%, with marginal growth continuing to decline, indicating that the recovery of emerging businesses has a lagging nature compared to macro policies, and the growth rate is expected to warm up in 2025.

Continuously recommending investment opportunities in operators with low-volatility dividend assets amid ample liquidity.

(1) On the policy front, the liquidity guidance for next year is optimistic, and long-term government bond yields remain low; the yields of stable, high-dividend dividend asset operators are significantly higher than those of long-term government bonds.

(2) On the funding side, patient capital such as insurance funds continues to flow in. On one hand, some insurance funds are still in the transition phase of new accounting standards; on the other hand, driven by the 'New Year’s Opening' phenomenon, the fourth quarter/first quarter is usually a key time for insurance funds to increase their holdings in dividend stocks.

(3) Fundamentally, operators have stable medium and long-term businesses, continuously enhancing their technological innovation capabilities, and continue to promote mergers and acquisitions in key areas such as quantum, Satellite, and CNI Data Factor Index; on the dividend side, operators pay great attention to shareholder interests, and the proportion of dividends continues to increase, continuing to recommend.

Recommendations to pay attention to: CHINA MOBILE (600941.SH, 00941), CHINA TELECOM (601728.SH, 00728), China United Network Communications (600050.SH, 00762).

Risk warning: The risk of reduced international cooperation; the risk of 6G and computing power technology iteration falling short of expectations; the risk of satellite Internet construction not meeting expectations; the risk of tightening regulatory policies on AIGC.