Zhongtai Communication 2026 strategy: AI strong as always, satellite turning point has come.

Zhongtai released a research report stating that in the future, with the acceleration of shipments of 1.6T and the performance acceleration of IDC, liquid cooling, IoT modules, etc., the communication industry may present a "higher valuation, lower cost" situation by 2026. Therefore, it is optimistic about the "overweight" opportunities in the communication industry brought by AI computing infrastructure and satellite internet next year, as well as the opportunities in domestic controllable and operable operators. Focus on optical interconnects, ICT equipment industry chain, data center liquid cooling, copper connections, AIDC, AIOT, satellite communication & navigation, optical cables & submarine cables, and telecom operators. The main points of Zhongtai are as follows: The communication index significantly outperforms the market, and it is expected to maintain an "overweight" recommendation in 2026. As of November 27, 2025, the communication sector (Shenwan) rose by 64.67%, outperforming the market, ranking second among the 31 sub-sectors classified by Shenwan Industry. The main driving factors were the significant increase in the prices of target stocks such as overseas AI giants driving the commercialization of optical modules. The PE-TTM (excluding negative values) of the communication industry is 24.6x, ranked 16th in the industry, and still at a low valuation level within the TMT sector. In the future, with the acceleration of shipments of 1.6T and the performance acceleration of IDC, liquid cooling, IoT modules, etc., the communication industry may present a "higher valuation, lower cost" situation by 2026. Therefore, it is optimistic about the "overweight" opportunities in the communication industry brought by AI computing infrastructure and satellite internet next year, as well as the opportunities in domestic controllable and operable operators. Theme One: Overseas cloud giants continue to increase CAPEX, focusing on Google and NVIDIA. North America's main cloud giants such as Microsoft, Google, Meta, and Amazon continue to increase their capital expenditure investment, and NVIDIA is expected to reach a global AI investment of $30 trillion to $40 trillion by the end of 2030, with a CAGR of approximately 40%. Google has formed a business closed-loop with its model-computing power-entry-application, and a good demonstration effect will enable cloud giants' model to continue to compete. Looking ahead to 2026, Google's TPU and NVIDIA's GPU will compete on the same stage, Scaleup is expected to open up high-speed network connection space, 1.6T is expected to start mass production and improve the penetration rate of silicon optical solutions, and new technologies such as CPO, LPO are also expected to begin to scale. Hollow core optical fibers are expected to be deployed faster due to their low latency and low loss characteristics, and as the power consumption of single AI chips increases, liquid cooling is expected to reach a turning point. It is recommended to focus on leading optical module, optical device manufacturers, hollow core optical fibers, and liquid cooling industry chain opportunities. Theme Two: Domestic giants catching up, domestic controllability is imperative. At the beginning of the year, Alibaba, ByteDance, Tencent, etc., all stated that they would accelerate capital expenditure, but affected by chip export controls such as H2O, the overall CAPEX pace has slowed down this year, and CSP is turning to domestic AI chip alternatives. Alibaba announced that it would further increase its investment beyond the 380 billion RMB announced at the beginning of the year, and if NV chips are released in the future, relevant manufacturers are expected to still not increase purchases but increase purchases of domestic chips, and super nodes may become a better solution. Currently, equipment manufacturers such as Huawei, ZTE, and Inspur have launched related super node platforms, and internet giants such as Alibaba, ByteDance, and Baidu have set up super node platforms based on self-developed chips. Looking ahead to next year, super nodes may usher in a year of rapid development, and the domestic model catching up is expected to enable the development of edge terminals. It is recommended to focus on the opportunities brought by super nodes in domestic servers, switches, switch chips, AIDC, and edge IoT modules. Theme Three: The year of the turning point for satellite internet, China's LEO satellite commercialization is expected to close the loop. 2025 is a milestone year for China's commercial space companies, with "Spacepower Nation" included in the "Thirteenth Five-Year Plan" and the establishment of a "Commercial Space Company" to coordinate development planning, the three major communication operators obtaining satellite licenses, and the successful launch of the "Zhuque 3" satellite. On the overseas side, SpaceX has achieved cash flow balance, and may seek an IPO in the future. The key factors for SpaceX's success include low-cost rocket launches (reusable) and low-cost satellite manufacturing capabilities. Looking ahead to next year, with continued policy support and accelerated industrial processes such as commercial spaceflight, China's two major constellations "Star Network" and "G60" are expected to accelerate the pace of satellite launches. At the same time, with the rise of TOC, TOB scenarios, as well as the demand for the "Belt and Road" initiative, Brazil, and other outbound needs, China's satellite internet is expected to usher in a turning point year. It is recommended to focus on opportunities in the rocket manufacturing, satellite manufacturing (satellite platforms + communication payloads), satellite terminals, satellite operations, and other industrial chain opportunities. Theme Four: High dividend and high dividend configuration value remains, focusing on operator dividend opportunities. In recent years, relevant institutions have continuously introduced dividend policy favorable policies, including reducing dividend handling fees, market value management, etc. In the context of the downward trend of long-term interest rates, the cost-effectiveness of dividend assets has been further highlighted. Operators have been operating steadily in recent years, with the dividend ratio steadily increasing, and capital expenditure continuously decreasing, providing a solid foundation for its dividend yield. At the same time, the rapid development of new businesses such as IDC, cloud computing, and AI by the three major operators highlights their growth value and may lift their valuation. Risk Alert: AI development is slower than expected; technological iteration is slower than expected; market competition intensifies; overseas trade disputes; systemic market risks; risks of third-party data distortion and market size miscalculation deviation; risks of lagging or outdated information in the public data used in research reports.