According to the Zheshang Securities research report, in the first half of 2025, the telecommunications industry is expected to see a year-on-year revenue growth of 2.8% and a year-on-year net profit attributable to shareholders growth of 7.8%. The sector's performance is steadily improving, with expectations for continued high growth in the performance of optical modules, liquid cooling, and other segments in Q3 2025, and the trend is expected to continue into Q4 2025. Meanwhile, the main business of operators is expected to improve throughout the year, with an increasing proportion of innovative businesses; the satellite internet industry trend is gradually being established and is expected to scale up. The bank remains optimistic about opportunities in the telecommunications sector in Q4 2025, focusing on three major segments: computing power, dividends (operators), and combat power (satellite internet).
<h2>Key Points from Zheshang Securities:</h2>
Current PE valuation is at a high level, and the market is optimistic about long-term growth potential
From the beginning of 2025 to the present (October 14, 2025), the telecommunications (Shenwan) PE (TTM) is 46.03 times, while the median PE over the past five years is only 32.22 times. Based on optimism about the future development prospects of various segments, a high premium level is given. From the beginning of 2025 to the present (October 10, 2025), the telecommunications industry has increased by 64.91%, outperforming the Shanghai Composite Index by 45.46 percentage points and the CSI 300 Index by 44.06 percentage points, ranking second among the 28 first-level industries in Shenwan.
The industry is expected to achieve steady growth throughout the year, driven by three major segments
In the first half of 2025, the telecommunications industry is expected to see a year-on-year revenue growth of 2.8% and a year-on-year net profit attributable to shareholders growth of 7.8%. The revenue growth rate is slightly lower than the same period last year by 0.9 percentage points, while the net profit growth rate is higher than the same period last year by 0.6 percentage points, indicating overall steady growth in the sector. Benefiting from global AI infrastructure, the market scale of optical modules, communication equipment, liquid cooling, and other telecommunications sub-sectors is rapidly growing, driving steady performance improvements in the sector. The bank expects continued high growth in the performance of optical modules, liquid cooling, and other segments in Q3 2025, with the trend expected to continue into Q4 2025. At the same time, the main business of operators is expected to improve throughout the year, with an increasing proportion of innovative businesses; the satellite internet industry trend is gradually being established and is expected to scale up.
Core changes and key targets in the three major segments: computing power, dividends (operators), and combat power (satellite internet)
Computing Power: The core change is that the penetration rate of super nodes domestically and internationally will rapidly increase. The global AI boom continues, with sustained efforts on the application side, accelerated shipments of super node solutions like NVIDIA's GB300, and a significant increase in ASIC shipments expected. The increase in super node penetration is expected to drive rapid growth in demand in sub-sectors such as switching networks, optical modules, liquid cooling, power supplies, and copper connections. At the same time, optical device companies will face development opportunities such as the scaling up of 800G/1.6T, increased penetration of silicon photonics, and the implementation of new technologies like OCS/CPO. In the switching network, focus on ZTE Corporation, Huqin Technology, and Unisplendour Corporation, and pay attention to Shengke Communication, Ruijie Networks, and StarNet Ruijie; for optical devices, recommend Zhongji Innolight, TFC, and Yuanjie Technology, and pay attention to NewEase, Guangku Technology, and OPTOWIDE; for liquid cooling, recommend Invec, Shenling Environment, and Kechuang Xinyuan; for copper connections, recommend Yihua Co., Ltd.;
Dividends (Telecom Operators): The core change is that the growth rate of operator businesses is expected to continue to recover, with innovative businesses showing higher growth rates and increasing proportions, while satellite/computing businesses are expected to contribute new elasticity. In addition, the value of dividend yield is highlighted. Based on the closing prices on October 10, 2025, the expected dividend yields for China Mobile, China Telecom, and China Unicom in Hong Kong stocks are approximately 6.4%/5.6%/5.5%, while the expected dividend yields in A-shares are approximately 4.7%/4.2%/3.2%
Continue to recommend China Mobile, China Telecom, and China Unicom.
Combat power (satellite internet): The core change lies in the expected acceleration of domestic satellite internet launch pace. In Q4 2025, the maiden flights of large private commercial rockets such as Tianlong-3, Zhuque-3, and Yingli-2 are imminent, which is expected to alleviate the domestic rocket capacity bottleneck. With the acceleration of low-orbit satellite networking, related companies' orders are expected to grow rapidly. Recommend Changjiang Communication, Zhenlei Technology, Shanghai Hanxun, Haige Communications, and Chengchang Technology, and pay attention to Guobo Electronics and Tongyu Communication.
Risk Warning: Risks of low-orbit satellite development falling short of expectations, railway 5G development falling short of expectations, AI development falling short of expectations, and calculations falling short of expectations

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300394

688195

600941

00941

002465

Zhejiang Merchants Securities released a research report, continuing to be optimistic about opportunities in the telecommunications sector in the fourth quarter of 2025, focusing on three major areas: computing power, dividends (operators), and combat capability (satellite internet). It is expected that in the first half of 2025, the telecommunications industry's revenue will grow by 2.8% year-on-year, and net profit attributable to the parent company will increase by 7.8%. Sub-sectors such as optical modules and liquid cooling are expected to continue to grow rapidly, with improvements in operators' main businesses and an increase in the proportion of innovative businesses. The telecommunications industry has risen by 64.91% year-to-date, outperforming major indices

Zhitong

Zhongji Innolight

OPTOWIDE

China Mobile

CHINA MOBILE

Haige Communications

Zhejiang Merchants Securities: Focus on the third quarter reports of the telecommunications sector and opportunities for core industrial changes