Zhongjin: 5G has entered the payback period. The low interest rate environment makes the valuation of the telecommunications service sector attractive.

CICC released a research report saying that looking ahead to 2025, for the telecommunications service sector, CICC believes that in a low interest rate environment, the sector's valuation is attractive. At the current stage, the market pays more attention to the cash flow and profit of this sector than the revenue performance. With 5G entering the payoff period, capital expenditures are expected to decrease to support free cash flow performance, while cost control supports profit stability. For tower business, free cash flow is significantly higher than dividends, and there is great potential for dividend growth. The completion of depreciation of existing towers will release profits soon. For the data center sector, CICC believes that the valuation has room for improvement. Cloud provider capital expenditures are rebounding, and the performance of the data center sector in 2025 looks promising. Rapid delivery capabilities, power supply, and location matching may become core competitive factors. CICC's main points are as follows: Telecommunications services: With 5G entering the investment return period and in a low interest rate environment, the valuation of the sector is attractive. Telecommunications operators: Dividend returns are stable, and technological transformation provides long-term growth momentum. Towers: There is great potential for dividend growth, and valuation catalysts are gradually emerging. Data centers: The valuation of the sector has room for improvement, cloud provider capital expenditures are rebounding, and the performance of the data center sector in 2025 looks promising. Rapid delivery capabilities, power supply, and location matching may become core competitive factors. Risks: Telecommunications operators' capital expenditures exceed expectations; cloud provider capital expenditures fall short of expectations.