CICC International: The three major telecommunications operators are accelerating the competition for the AI track, and the transformation dividend has already appeared.

Bank International issued a research report stating that in the investment outlook for 2025, both China Mobile Limited and China Telecom Corporation have for the first time proposed that there is "no upper limit" on their related computing power investments. Despite maintaining targets for the scale of capital expenditure and revenue share, the three operators are still determined to increase their computing power investment, highlighting their determination to transform their computing power. The rapid development of AI is driving operators' cloud computing, data centers, and other businesses, which are expected to contribute to the second growth curve of business development. At the same time, stable cash flow and high dividends provide a safety net for operators, enabling them to withstand external negative impacts while having valuation elasticity. Operators will significantly benefit from the growth in performance and value revaluation brought by intelligent computing business in the AI wave, while they also serve as defensive growth assets in the AI chain, possessing both growth potential and scarcity. The main points of Bank of China International are as follows: Significant achievements in operator computing power construction, revenues in related areas all increasing. In 2024, China Mobile Limited's intelligent computing scale reached 29.2 EFLOPS, with a net increase of 19.1 EFLOPS; two WanKa clusters in Hohhot and Harbin came online to provide services, with access to third-party computing power exceeding 30 EFLOPS; with the enhancement of intelligence in mobile cloud, revenue broke through 100 billion to 100.4 billion yuan, an increase of 20.4% year-on-year. China Telecom Corporation's own intelligent computing power reached 35 EFLOPS, and after connecting with 50 computing power partners, the total scale reached 62 EFLOPS; WanKe pools in the Beijing-Tianjin-Hebei and Yangtze River Delta regions have been built, and thousand-card pools have been deployed in regions such as Guangdong, Jiangsu, Zhejiang, Inner Mongolia, and Guizhou; in terms of revenue, China Telecom Corporation's intelligent income reached 8.9 billion yuan, an increase of 195.7%, Tianyi Cloud has been fully upgraded to an intelligent cloud, with revenue reaching 113.9 billion yuan, an increase of 17.1%, and AIDC revenue reached 33 billion yuan, an increase of 7.3%. China United Network Communications has a computing power scale exceeding 17 EFLOPS, building large-scale intelligent computing centers in Shanghai, Guangdong, Hong Kong, Inner Mongolia, Ningxia, Guizhou, and other regions, with more than 300 integrated computing power resource pools built; Unicom Cloud's revenue reached 68.6 billion yuan, an increase of 17.1%; data center revenue reached 25.9 billion yuan, an increase of 7.4%; intelligent computing business drove strong growth in computing power services, with contract amounts exceeding 26 billion yuan last year. The investments made by the three companies in computing power and AI fields have already achieved significant economic benefits, laying a solid foundation for the continuous high-quality development of the companies. Operators are increasing their investment in computing power across the board, and their determination to transform into intelligent computing is firm. In the investment outlook for 2025, both China Mobile Limited and China Telecom Corporation have for the first time proposed that there is "no upper limit" on their related computing power investments. Despite maintaining targets for the scale of capital expenditure and revenue share, the three operators are still determined to increase their computing power investment, highlighting their determination to transform into intelligent computing. In 2025, China Mobile Limited plans to invest 37.3 billion yuan in the field of computing power, accounting for about 25% of overall capital expenditure, with no limit on investment in inference resources; China Telecom Corporation plans to increase its investment in computing power by 22% year-on-year, but with "no limits," and will flexibly adjust based on customer demand and market development; China United Network Communications plans to increase its investment in computing power by 28% year-on-year, and has made special budget arrangements for AI as a key infrastructure and major project. With the continuous development of the digital economy, the three major operators have already fully engaged in a competition around computing power and AI. Telecommunications operators are core assets in the domestic computing power chain. The rapid development of AI is driving operators' cloud computing, data centers, and other businesses, expected to contribute to the second growth curve of business development. Meanwhile, stable cash flow and high dividends provide a safety net for operators, enabling them to withstand external negative impacts with valuation elasticity. Operators have outstanding advantages in research and development in innovative technologies such as network transmission, data, and applications and continue to consolidate their leading position in emerging areas such as 6G, computing power networks, quantum communication supported by national policies, promoting the strategic upgrade of cloud and intelligent computing, reflecting their forward-looking layout and technological innovation capabilities in the digital economy era, transforming from traditional communication operators to technology-focused leaders in the digital economy. Optimistic about the three major operators' development in network computing intelligence direction boosting the valuation of the companies. Investment Recommendations Operators will significantly benefit from the performance growth and value reevaluation brought by the intelligent computing business in the AI wave. Operators are also defensive growth assets in the AI chain, possessing both growth potential and scarcity. It is recommended to focus on the three major operators: China Mobile Limited (600941.SH,00941), China Telecom Corporation (601728.SH,00728), China United Network Communications (600050.SH,00762). At the same time, it is recommended to pay attention to operator cooperation computing service providers: Range Intelligent Computing Technology Group (300442.SZ), Hangzhou Anysoft Information Technology (300571.SZ), China Bester Group Telecom (603220.SH), ZTE Corporation (000063.SZ), Fiberhome Telecommunication Technologies (600498.SH), Unisp.Lendour Corporation (000938.SZ) and others.Risk Factors Risk of policy uncertainty; Risk of market demand falling short of expectations; Risk of industry oversupply leading to deteriorating competition environment; Risk of AI development falling short of expectations.