A child interacts with a robot at the China International Big Data Industry Expo 2023 in Guiyang, southwest China's Guizhou Province, May 26, 2023. (Xinhua/Liu Xu)
BEIJING, Oct. 24 (Xinhua) -- In the wake of the artificial intelligence (AI) wave, China's telecommunication industry is seeing sustained improvements in downstream demand, solidifying positive performance trends.
With overseas business emerging as a new growth driver, the industry is actively promoting technological innovation and refining its positioning to meet market demands and development trends.
-- Telecom companies gain steady growth with AI progress
In the first half of 2024, listed telecom companies reported strong growth, bolstered by recovering demand in consumer and network communication markets, along with accelerated investment in computing infrastructure.
According to Huatai Securities, the total revenue of A-share listed telecom companies reached 694.729 billion yuan, a year-on-year increase of 3.37 percent, while the net profit attributable to shareholders rose by 6.13 percent year on year to 80.5 billion yuan.
Ruijie Networks, a data communication solutions provider, reported a total revenue of 5.043 billion yuan in the first half of 2024, up 4.4 percent year on year, and a net profit of 154 million yuan, increasing by 10.08 percent year on year. Notably, in the second quarter, its revenue and net profit grew by 34.95 percent and 6,456.85 percent quarter on quarter respectively.
A company representative stated that the demand for network construction among internet clients has accelerated due to AI, leading to significant wins in large-scale projects with top internet giants like ByteDance, Alibaba, and Tencent.
Range Technology, specializing in Internet Data Centers (IDC) and Artificial Intelligence Data Centers (AIDC), also reported impressive results. In the first half of 2024, it achieved a total revenue of 3.575 billion yuan, up 112.47 percent year on year, and a net profit of 967 million yuan, a 37.64 percent increase.
The company attributed its growth to the competitive dynamics in the AI model industry, which has significantly increased overall market demand and accelerated technological change.
The booming optical communications market has benefited Sinopack Electronic, which has successfully shipped its aluminum nitride multi-layer films for high-speed applications in 400G/800G optical modules, meeting the needs of AI and data centers.
According to Sinopack Electronic, the company will remain committed to monitoring product trends and aligning its development efforts with market demands.
-- Telecom industry accelerates overseas expansion
This year, overseas expansion has become a crucial growth driver for listed companies. The structure of these companies' international ventures has shifted from low-value traditional industries to more diverse and higher-value sectors, with the telecom industry being a key example.
Yealink primarily focuses on overseas channels, reporting a total revenue of 2.667 billion yuan in the first half of 2024, a 30.5 percent increase over the same period of last year. Its net profit attributable to shareholders reached 1.36 billion yuan, up 32.13 percent from the same period of the previous year, with all product lines showing steady progress, further strengthening the positive trend in business continuity.
The company stated that its new subsidiary in Singapore, established in 2023, not only supports its global strategy but also mitigates potential trade risks in specific markets. Yealink plans to gradually relocate parts of its supply chain this year to enhance flexibility in response to changing trade policies and maintain business stability.
In recent years, Ruijie Networks has made overseas expansion a priority. Its international business now spans over 90 countries and regions across Asia, Europe, America, and Africa. In the first half of 2024, Ruijie's overseas revenue grew by 58.1 percent year on year to 771 million yuan.
Regarding future overseas strategies, Ruijie Networks' representative noted that the company has established a comprehensive compliance system and developed capabilities to support international operations, including manufacturing, delivery, and maintenance.
Additionally, by investing in over ten overseas subsidiaries, Ruijie Networks is strengthening partnerships with local channels and leveraging the Asia-Pacific region as a base to enhance brand influence and actively expand its market reach.
-- Telecom industry promotes transformation to embrace new opportunities
Currently, a new wave of technological revolution and industrial transformation is underway, creating strategic opportunities for the emergence of new quality productive forces.
Range Technology reported strong demand for AIDC in the Yangtze River Delta market, with a healthy backlog of orders. Their first intelligent computing center in the region is nearing completion, and they are now delivering the second center, which is on track for timely launch. Delivery for the Langfang and Guangdong-Hong Kong-Macao Greater Bay Area (GBA) parks is also proceeding smoothly.
Looking ahead, Range Technology plans to solidify its market position as a leader by accelerating delivery schedules, constructing new intelligent computing centers, and precisely targeting emerging market demands.
Self-research and development are essential for companies aiming to innovate and enhance efficiency. Data shows that Transcom allocated nearly 60 percent of its revenue to R&D in 2023, consistently ranking among the top in recent years.
Transcom is a technology company focused on developing RF communication testing instruments and providing comprehensive testing solutions. Since its establishment, it has maintained a high R&D investment ratio, continually strengthening its core competitiveness.
Telecommunications has always been at the forefront of ICT innovation, said Wang Yanlong, chief telecommunications analyst at Guotai Junan Securities.
Wang noted that the market consensus is forming around the high demand for computing power brought by AI, which will require ongoing monitoring of delivery and performance results. Additionally, the telecommunications manufacturing sector is experiencing a rebound in demand, particularly for IoT modules, controllers, and power information systems, which are currently undervalued compared to other high-growth sectors.
(Edited by Tian Shenyoujia with Xinhua Silk Road, tianshenyoga0524@163.com)
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