Analysis of the influence of NCP on optical communication industry
2020/2/9 13:41:32
Combined with the above factors, the impact of this epidemic on the optical communication industry cannot be underestimated, especially in the first quarter. Small and medium-sized enterprises will be the first victims because of their weak foundation. Governments at all levels must pay enough attention to this.
2. Little impact throughout the year, and new growth is expected
Although the outbreak is coming, the overall business performance of the optical communication industry is still optimistic for the whole year based on our understanding. The reasons are as follows:
First, material supply and capacity are not a problem for the time being. From the content of the speeches made by HG GENUINE, ACCELINK and other enterprises, as well as the enterprises we investigated, the main product inventory of enterprises generally has 2-3 months' stock. The outbreak in the traditional Spring Festival holiday is also a relatively favorable time point, when enterprises generally arrange to postpone orders and reserve materials. On the other hand, after years of development, the capacity of major enterprises is quite flexible, low-end products are generally produced by outsourcing, while high-end products have a high degree of automation, which can minimize the impact of employees. It should also be noted that the number of employees with known diseases in the whole optical communication industry is almost negligible.
Secondly, historically, the optical communication industry is very sensitive to the government's pull policy. After SARS in 2003, 10G Optical module market ushered in an outbreak. After the global financial crisis in 2008, operators immediately launched a large-scale FTTH construction to usher in a new boom cycle of the optical communication industry. 2020 is the year of 5g deployment in China. It is believed that the optical communication industry is expected to enter a new boom cycle after the outbreak.
Third, overseas distribution will play a role. Influenced by the Sino US trade war, in recent years, domestic optical communication enterprises have gone to Southeast Asia and other overseas locations. In terms of optical modules, Mentek, ZhongJi InnoLight and Hisense have all set up factories in Vietnam and Thailand; in terms of optical passive components, East Point Communication, O-netcom, XDK and ZhongCe Optics have all chosen Vietnam and Thailand to set up factories; in terms of optical fiber and cable, HTGD, YOFC, Fiberhome and Tente Fibershow have all set up optical cable factories in Myanmar, Indonesia and Thailand. These overseas arrangements are expected to make a special contribution to the performance of these enterprises during and after the outbreak. Not only overseas distribution, but also the cross regional distribution of domestic enterprises in the mainland will help these enterprises to overcome the epidemic. If the industry organization can actively coordinate the production capacity among enterprises in various regions, it is believed to be of great help to overcome the epidemic. After all, the industry as a whole is still in the situation of overcapacity.
Fourth, the impact of the epidemic on the global industrial chain is limited. Some foreign media are worried about the impact of the epidemic on the global optical communication industry chain, but we believe that the affected enterprises are mainly those enterprises that rely heavily on Chinese manufacturing, such as Neophotonics (Shenzhen), II-VI / Finisar (Wuxi), MOLEX oplink (Zhuhai), II-VI (Fuzhou), but these enterprises are far away from the center of the epidemic area, so we believe that the impact will not be too large. On the other hand, due to the low role of China's optical communication industry in the global industry chain, it should not bring the same impact on the global semiconductor industry chain as the Kanto earthquake in Japan.
Fifth, the overall market is still good. Since the fourth quarter of 2019, the trend of orders in the overall optical communication market has been basically determined. Many companies even arrange the Spring Festival to complete orders. If the outbreak can be controlled quickly, this trend should not be interrupted.
3. Epidemic situation promotes remote office / education as normal, and facilitates the construction of data center and high-speed network
Affected by the epidemic, all parts of the country successively issued a notice of delayed school opening, forbidding any off campus training institutions to carry out any form of offline training activities. Universities and educational institutions have established online teaching. Online education will not necessarily replace face-to-face education, but it may become a normal way for students to learn, which will promote the construction of information technology, increase the demand for network traffic, and benefit the optical communication industry chain.
In addition, under the influence of the epidemic, major companies have called on employees to work at home, remote office / intelligent conference system, effectively improving the efficiency of cross regional communication and increasing the interaction of meetings. Even after the outbreak, telecommuting may become a habit.
The improvement of online business such as remote office and online education and the cultivation of user habits will certainly drive the substantial growth of data traffic, and benefit the foundation of cloud data center, as well as high-speed and low delay network infrastructure. Just like the SARS business opportunity meeting in 2003, this round of epidemic is also expected to bring opportunities to the new round of Internet development.
It is also worth noting that although after the outbreak of the epidemic, the whole country through self isolation, medical resources, material assistance and other ways to ensure the efficiency of the epidemic interdiction, but from the situation of the epidemic caused by the outflow of population in the epidemic area, there are still many deficiencies in information management, information sharing and many other fields. This is bound to become the focus of a new round of information industry development after the outbreak, so as to bring more opportunities to the development of optical communication. We believe that after the epidemic, the government will certainly strengthen the information infrastructure, and conduct big data, AI intelligent information collection, management, etc., which will further promote the construction of cloud data center and high-speed network, and promote the optical communication industry to usher in a new boom cycle.
4. The small and medium-sized enterprises are the most affected by the epidemic, and the structural adjustment of the industry is inevitable
This epidemic situation is not only a huge challenge for contemporary China, but also for the governance ability of Chinese enterprises. Large enterprises, especially large state-owned enterprises and listed enterprises, due to their sufficient ability to mobilize resources, should not be hurt in this epidemic, but small and medium-sized enterprises are not the same. Labor loss, rent loss, order loss, market cost loss and opportunity loss will make many small and medium-sized enterprises difficult. For small and medium-sized enterprises, outsourcing opportunities for large enterprises, market opportunities for products in short supply, and new product opportunities brought by the epidemic will all be important opportunities for them to win their way in the epidemic. Therefore, the epidemic is also a new opportunity for the transformation and upgrading of small and medium-sized enterprises. To seize the structural adjustment opportunity brought by the epidemic is a huge challenge for the leaders of these enterprises. For example, whether we can seize the opportunity of domestic chips since 2019, whether we can further promote the application of automation production and testing in the industry, and whether we can further promote the integration of the industry is worth looking forward to.
On the other hand, the outbreak in China will also give foreign optical communication enterprises, especially North American enterprises, a new excuse to further isolate China and restrict Chinese enterprises. To adjust the structure of optical communication industry in the world, the epidemic situation also brings new possibilities.
The development history of optical communication industry has proved that every round of industry crisis is a new opportunity for industry development. As an important infrastructure of information society, optical fiber communication network plays an indispensable key role. The crisis brought by 2019-ncov pneumonia once again proves the importance of information-based networks. For the optical communication industry, this will be a new starting point, a new opportunity.
It is recommended to pay attention to the stocks related to the optical communication industry, especially some companies with perfect industrial layout and core technology.
