Tongyu Communication Inc. (600118) – Market Context and Recent Developments

Tongyu Communication Inc. is a Shenzhen‑listed company that designs, manufactures and sells communication antennas and RF devices for mobile communication systems, including base‑station antennas, microwave antennas and RF modules. As of 8 January 2026 the share price stood at 60.78 CNY, a level close to its 52‑week high of 61 CNY. The company’s market capitalisation is approximately 31.8 billion CNY. Its price‑earnings ratio of 1,960 indicates that earnings are very low relative to market valuation, reflecting the capital‑intensive nature of the antenna manufacturing industry.

1. Market Performance on 12 January 2026

On 12 January 2026 the Shanghai and Shenzhen exchanges recorded a combined trading volume of 3.6 trillion CNY, the second day in a row that volume exceeded 3 trillion CNY. This surge was accompanied by gains of more than 1 % in the three main indices:

  • Shanghai Composite: +1.09 %
  • Shenzhen Component: +1.75 %
  • ChiNext: +1.82 %

The increase was driven largely by the “AI application” and “commercial space” themes, which attracted broad market attention. In total, over 4,100 stocks rose, with 201 stocks hitting the daily limit.

2. Commercial Space Theme

Commercial‑space activity was a key driver of market sentiment. Several companies in the sector, including China Satellite (600118) and Tongyu Communication (600118), experienced notable price moves:

  • China Satellite closed at a record high with a market value of 137.9 billion CNY after a 70‑plus‑million‑CNY trading volume.
  • Tongyu Communication achieved its fourth consecutive trading day with a limit‑up movement, recording three limit‑up days over a four‑day period.

The Chinese government’s submission of 20,300 new satellite applications to the International Telecommunication Union (ITU) on 10 January further reinforced the commercial‑space narrative. The satellite sector has attracted significant institutional capital, with satellite‑focused ETFs reporting net inflows of 10 billion CNY or more in the first quarter of 2026.

3. AI Application Theme

The AI‑application theme also contributed to the broader market rally. Shares of companies such as Liou Company, Meiyan Health, Tianxia Show and other AI‑focused firms reached limit‑up status. The AI theme is expected to benefit firms that supply hardware and components for AI infrastructure, including RF and antenna manufacturers like Tongyu.

4. Implications for Tongyu Communication

  • Positive Momentum – Tongyu’s alignment with the commercial‑space theme has generated strong upside momentum, as evidenced by consecutive limit‑up days. The company’s products are integral to satellite and mobile base‑station infrastructure, making it a natural beneficiary of the sector’s growth.
  • Valuation Considerations – The current price‑earnings ratio of 1,960 reflects the high growth expectations associated with the commercial‑space boom. Investors should monitor earnings performance closely, as the sector is capital‑intensive and sensitive to macroeconomic conditions.
  • Capital Structure – With a market capitalisation of 31.8 billion CNY, Tongyu is a sizable player within the antenna manufacturing niche. Its financial strength positions it well to invest in R&D and capacity expansion to meet growing demand from both terrestrial and satellite communication providers.

5. Outlook

The market environment on 12 January 2026, characterized by record‑high trading volume and sectoral strength in commercial space and AI, provides a favorable backdrop for Tongyu Communication. Continued policy support for satellite launches, coupled with the expansion of mobile base‑station infrastructure, is likely to sustain demand for the company’s antennas and RF devices. However, investors should remain vigilant regarding the high valuation multiple and the potential impact of broader market volatility on the sector.