China Galaxy Securities: The communications industry achieves self-reliance and self-strengthening through a "point-to-chain" approach, with scientific and technological innovation reaching a new level.

China Galaxy Securities released a research report stating that recently, the State Council Information Office held a series of themed press conferences on "Starting the 15th Five-Year Plan," introducing progress in building China into a science and technology powerhouse during the 15th Five-Year Plan period. Supporting industrial policies for the 15th Five-Year Plan have been introduced, continuously advancing the building of a science and technology powerhouse. AI computing infrastructure is being strengthened and upgraded, the ecosystem of emerging communications industry systems is continuously being built, and the growth space for the sector is broad. Three main industrial investment themes are recommended: (1) Operators: deeply participating in 6G R&D and the implementation of satellite-terrestrial integrated services; (2) 6G main equipment vendors & satellite internet: benefiting from network iteration and rising demand for integrated sensing, communication, computing, and intelligence equipment; terminal satellite integration services are accelerating; (3) AI optical communications have high technical barriers; (4) Frontier quantum technology. The main views of China Galaxy Securities are as follows: China's international position in scientific and technological strength has been rising year by year, and its level of scientific and technological self-reliance and self-strengthening is expected to improve significantly during the 15th Five-Year Plan The Outline of the National 15th Five-Year Plan takes "greatly improving the level of scientific and technological self-reliance and self-strengthening" as one of the main goals of economic and social development and makes systematic arrangements for scientific and technological innovation. It adheres to the "four orientations," firmly grasps the historical opportunity of the new round of scientific and technological revolution and industrial transformation, takes accelerating high-level scientific and technological self-reliance and self-strengthening and leading the development of new quality productive forces as the main line, takes original and leading scientific and technological breakthroughs as the main direction, and promotes the building of a science and technology powerhouse to continuously reach new levels. Computing network construction continues to advance, information infrastructure is upgraded, and AI empowers a paradigm shift in scientific research From the perspective of new computing infrastructure, China's computing foundation continues to be consolidated. As of 2026H1, the scale of intelligent computing power reached 2185 EFLOPS, and more than 70 major computing corridors have been built around computing hubs. The construction of a national integrated computing network is being accelerated, a multi-level computing facility system of "hub-region-edge" is being built, intelligent computing clusters of ten thousand cards, one hundred thousand cards, and above are being deployed in an orderly manner, inference computing facilities are being deployed on demand for scenarios, and efforts to adapt domestic computing chips are being intensified. Automated monitoring of computing power and supply-demand matching are being deepened to improve the utilization rate of computing resources. From the application perspective, artificial intelligence has basically run through the entire chain of R&D and design, production and manufacturing, quality inspection and operations and maintenance, accelerating the intelligent transformation and upgrading of industries. Domestic open-source models have made innovative breakthroughs and are highly cost-effective, becoming the preferred choice for more global users. Overall, China's information infrastructure is being upgraded, the standards system for key information and communications fields such as 5G-A/6G, optical communications, computing networks, quantum communications, satellite internet/IoT, and direct-to-handset satellite connectivity is being strengthened, the level of commonality between military and civilian standards is being improved, and the level of internationalization of standards is expected to continue to rise. Seizing the high ground in scientific and technological development, continuously tackling core technologies, and providing strong support for high-level security Investment areas focus on hard technology and future industry tracks such as artificial intelligence and quantum technology, helping to tackle key core technologies and industrialize outcomes. In quantum technology, quantum computing has supercomputing power beyond traditional computers and can achieve disruptive breakthroughs in fields such as new drug development, materials design, and financial modeling. Quantum communication, based on the principle of quantum no-cloning, can provide theoretically absolutely secure information transmission and is an important guarantee for the future digital economy and national information security. Globally, quantum technology is being identified as a frontier strategy, promoting the rapid concentration of talent, capital, and infrastructure into the quantum industry. Overall, during the 15th Five-Year Plan period, scientific and technological self-reliance and self-strengthening will strengthen basic research and original innovation, achieve full-chain breakthroughs in key core technologies, and promote the deep integration of scientific and technological innovation with industrial innovation. Frontier technology is expected to become a booster for economic growth in emerging market economies such as China. Risk warnings: the risk that the R&D of new technologies such as 6G falls short of expectations; the risk that the satellite internet networking process falls short of expectations; the risk of intensified industry competition; and the risk of uncertainty in domestic and foreign policies.