Page 21 - 2016年光通信竞争力报告(摘要版)

8 The competitiveness report on "the Top 10 competitiveness enterprises in the optical communications industry of China & Global market in 2016” (Abstract Edition)

Figure 2 Total sales revenues of China’s Top 10 competitiveness
enterprises in the optical fiber and cable industry during 2006-2015

Figure 3 Long-term development trends of China’s optical fiber
and cable industry

Source: Network Telecom Information Institute.

Source: Network Telecom Information Institute.

Considering the long-term trend, the coincident index continues to grow, indicating that China’s optical fiber and communications market has
developed rapidly, continuously, and healthily. Network infrastructure, industry scale and business innovation together comprehensively reflect the
sustained and rapid development of China's optical fiber and cable industry. Over the past 5 years, the scale of the industry keeps growing rapidly.
Figure 2 shows the total sales revenues of China’s Top 10 competitiveness enterprises in the optical fiber and cable industry during 2006-2015.

From the short-term trend, in the last four quarters, the volatility of coincident index is obvious, which indicates that China's optical fiber and cable
industry fluctuates up and down recently. The coincident synthesis index from Q4 2015 to Q3 2016 is 104.4, 104.6, 104.8 and 105.8 respectively in
upward fluctuation, indicating that China's optical fiber and cable industry maintains an overall good development trend. In the past year, the month-
on-month fluctuation of the coincident synthesis index is obvious, up 1.96, 0.19, 0.28 and 0.92 points in the 4 quarters respectively, indicating that the
industry’s growth rate meets ups and downs, especially in Q1 and Q2 in 2016 when the growth rate slows.

The slowdown of industry is mainly due to the sharp volatility of the capital market and the fierce competition in the market. Despite of the continuing
growth in demand, the competition in the domestic market is more intense. Some leading enterprises have obvious competitive edge while the small
and medium-sized enterprises face much pressure, thus accelerating the integration of the optical fiber and cable industry. The leading enterprises are
expected to further consolidate the oligarchy pattern in the future. In addition, various factors such as macroeconomic downward pressure, leverage-
removing in the capital market as well as enterprises’ measures of speeding up transformation and investment and reducing short-term profits all have
certain influence on the prosperity index.

The leading synthesis index shows a sustained upward trend. The index in Q2 2016 and Q3 2016 is 105.7 and 105.9, up 1.42 and 0.25 points month-
on-month respectively, which reflects the industry’s strong potential for further development.

The leading index shows that China's optical fiber and cable industry will keep the trend of fast growing the next year. By observing and analyzing
the peak and trough values of the leading and coincident index from Q4 2011 to Q3 2016, we find an obvious rule that values of the leading index are
always 2 months ahead of that of the coincident index. According to Figure 5, the leading synthesis index continues to maintain positive growth from
Q2 2016 to Q3 2016, while the month-on-month growth rate drops slightly. Thus we predict that China’s optical fiber and cable industry will maintain
in high prosperity from Q4 2016 to Q3 2017.

Figure 4 Short-term development trends of China’s optical fiber Figure 5 Forecast of the development trend of China’s optical fiber
and cable industry and cable industry

Source: Network Telecom Information Institute. Source: Network Telecom Information Institute.

Through the above analysis of prosperity index and forecast in the field of optical fiber and cable industry of China, we have reason to believe that the optical fiber
and cable industry of China will remain in rapid development for a long period in the future and will play an increasingly important role on the global stage.

At last, on behalf of all members of the review group of "Top 10 Competitiveness Enterprises in the Optical Communications Field of China & Global market
during 2015-2016", may I extend my sincere gratitude again to all colleagues' help and support for the ranking events in the past 10 years! Thank you!

Full-time Member of Standing Committee on Communication Technology of Ministry of Industry and Information Technology Mao Qian
Chairman of Asia-Pacific Optical Communications Committee
Chief Editor of "Network Telecom" Magazine
Sept 2016