The 'ZTE' incident has seen a major turnaround, triggering a strong concern in the capital market.
Trump said on Sunday that Twitter will help ZTE's 'rapid recovery business.' In response, domestic analysts said that before the US 'ZTE ban' caused the market to worry about the prospects for 5G, the communications sector was under a lot of pressure. Langpuff tweets predicted that the ZTE event will soon be properly resolved and 5G is expected to recover quickly.
China Merchants Communications analyst Wang Lin and Yu Jun made a pre-judgment on the follow-up trend of the 'ZTE Incident':
The second embargo of ZTE from the US Department of Commerce began on April 16. Just one month ago, the attitude of the United States has firmly denied the room for negotiation, and it has undergone a change of attitude to accept ZTE's complaint materials. Today, Trump has launched a tweet. Demonstrate cooperation attitude, the overall situation is moving toward positive development.
We have determined that the US Department of Commerce is likely to resume ZTE's procurement in the United States in the form of a moratorium on suspension. The final solution has yet to be determined and fines are the most likely option.
From the perspective of the national game, the discourse rights and intellectual property rights of the 5G standard may become the focus of negotiations, and further influence needs to be evaluated.
As for the market impact, analysts are highly consistent, emphasizing the focus on 5G expectations, as well as stocks with alternative logic and proprietary technology patents.
Essence Securities stated that 'we continue to firmly believe that China's 5G':
In fact, during the week when the United States reinstated ZTE’s prohibition, the three major operators will continue to promote 5G as scheduled: China Unicom’s 5G pilot in 16 cities, telecommunications in 5G pilots in 12 cities, mobile 5G pilots in 5 cities, and 5G business applications in 12 cities demonstration.
Affected by the ZTE Incident, the market may be worried that the United States will further expand its crackdown on China's communications industry chain, or it may worry that China will fight back against US companies. Affected by this, Zhongyin Xuchuang and Halo Xinxin have great fluctuations in stock prices. We recommend focusing on .
At the same time, the ZTE Incident is a wake-up call to our communications industry chain. Localization of key devices is urgently needed to be put on the agenda. It is recommended that we focus on the subject of alternative logic and proprietary technology patents, such as Biotech, FEI.
The China-Thailand Communications Internet Team believes that it is necessary to focus on the anticipated recovery of 5G and the targets affected by China and the United States. However, they also stressed that this does not change the long-term logic of autonomous control and domestic substitution:
Concerned about the expected recovery of 5G and the impact of China and the United States. The Sino-US game incident has lowered the market's expectations for 5G development. We believe that it has not affected China's determination to develop 5G. Focusing on the pre-impacted technologies in the early stage, FiberHome Communications, China Inter-axis Xuchuang, ZTE, etc., as well as the new network of halo affected by the Sino-US relationship, the market is worried about the impact of core chip imports such as Ruijie, Ziguang, etc.
Emphasis on self-controllability and domestic substitution is a deterministic medium-to-long-term logic. The Sino-American game has reminded the reality of the domestic chip industry. The incident allows us to clearly recognize the weaknesses of the domestic industry. The turning point of the incident cannot be changed independently and controlled and domestically. In the alternative medium-to-long term logic, the need for a national strategy will be more pragmatic. It is recommended to continue to pay attention to relevant targets.
China Merchants Communications analyst Wang Lin and Yu Jun believe:
The 5G and communications sectors are expected to usher in rebound opportunities. In the medium term, 5G progress will be affected by facts and changes in the form of industrial policies will occur. Industry investment opportunities still need to be carefully observed, waiting for the relevant matters to fall. 5G is still the future in the long term For the most definite investment direction in a few years, the ZTE event may have a slight impact on the short-term 5G progress, but it will be more determined in the long-term.
The short-term market rebound may be selected from the perspectives of communication and the 5G sector affected by the impact of ZTE's oversold and the excellent quality of the fundamentals itself. Focus will be placed on the following: New Halo network, Zhongchuang Xuchuang, Gao Xinxing, Ascension Technology, and special information. ICT was originally the industry with the most closely integrated globalization and division of work. After being punished by the embargo, ZTE's business was greatly affected, and some production lines were even shut down. This has also affected the global industrial chain, including some upstream U.S. companies. Restoring ZTE's procurement is not only reasonable, but also a general trend. If we can resume purchasing in the United States in a short period of time, the company's product line will have a rapid recovery capability, and the impact on the industry chain and the company is expected to shrink to a lower limit.