The restructuring of the competitive pattern+changes on the supply side of content is doubly beneficial to the national network culture. In the AIGC era, telecom operators are expected to occupy a more central position as “water sellers” of data and computing power.

On the one hand, it holds the key resource for AI training and iteration — data. On the other hand, national public clouds, dominated by operator clouds, are an important infrastructure for operating, storing, and interacting with AI data. Among them, China Telecom Tianyiyun is involved in the construction of “Guoyun”, and its strategic position in the field of industrial digitization is expected to further improve. China Telecom announced that it has comprehensively deployed large-scale model technology research and development and achieved phased results. The industrial version of “ChatGPT” also already has a relevant technology research and development foundation, with the aim of building end-to-end commercialization capabilities for the industrial version of generative technology for the telecommunications sector. As a holding subsidiary of China Telecom Group and the core pan-entertainment content carrier platform, Guomai Culture benefits from the improvement of the Group's overall strategic position, and on the other hand, is expected to take the lead in connecting with upgraded AI capabilities to drive the reshaping and development of its own business.

Focus on 5G application products, and the metaverse will be the core driving force for business upgrades.

In 2022, the company further sorted out the company's main business and clarified five business directions, namely digital content (Tianyi Ultra HD, Tianyi Cloud Gaming, Tianyi Cloud AR/MR, etc.), digital intelligence applications (digital intelligence party building, digital intelligence enterprise services, etc.), metaverse cloud mid-Taiwan business (virtual digital people, etc.), physical scenarios (hotels, exhibitions), digital assets (digital intelligence points, digital intelligence collections).

Among them, Metaverse Cloud Platform is a new business direction. The company plans to use the metaverse as the core driving force for business upgrades and cooperate fully with all parties in the industry chain to promote R&D and industrialization integration of metaverse technology in all aspects.

Investment advice: Buy an -A investment rating, target price of 18.43 yuan for 6 months. The company's revenue for 2022-2024 is estimated to be 4,223/4934/5.406 billion yuan, and the net profit of the mother is -2.07/0.97/219 million. The total target market value calculated by the segmental valuation method was 14.669 billion yuan, corresponding to the target price of 18.43 yuan.

Risk warning: 5G policy control, innovative products fall short of expectations, and market competition intensifies.