Guanghetong RedCap module obtains FCC verification, RedCap technology promotes internet of things development

Guanghetong's FG132-GL RedCap module successfully passed FCC testing and obtained verification in May, becoming the industry's first RedCap module to achieve this certification. This breakthrough means that terminal devices using the FG132-GL can quickly begin RedCap application deployment in the Americas.

RedCap, as a "lightweight version" of 5G technology, is specially tailored for the internet of things field. By streamlining certain 5G NR functions, RedCap effectively reduces the complexity, power consumption, and size of modules, thereby lowering overall costs and accelerating the intelligent networking process of various hardware devices. At the same time, RedCap retains key advantages of 5G technology, such as low latency and high reliability. As 5G technology continues to advance and the RedCap standard is gradually refined, this low-cost, high-reliability new solution is expected to accelerate penetration, promote an increase in the number of connected hardware terminals, and enhance the prosperity of the internet of things industry.

In China, RedCap technology is receiving policy support and industrial promotion, with a rapid increase in penetration rates. The relevant notice issued by the Ministry of Industry and Information Technology states that by 2025, the scale of 5G RedCap applications will continue to grow, achieving large-scale coverage of 5G RedCap in cities at or above the county level nationwide, with the number of connections reaching tens of millions. The three major operators are also actively laying out 5G RedCap, launching related products and services.

In the overseas market, although the global shipment volume of cellular internet of things modules experienced an annual decline for the first time in 2023, Guanghetong's global share still reached 7.8%, with a year-on-year growth of double digits. The internet of things module market is expected to resume growth in the second half of 2024, while 5G and 5G RedCap technologies are expected to see significant growth in 2025, mainly benefiting from the widespread adoption of applications such as video surveillance, routers/CPE, and vehicle networking.

In addition, the rise of AIPC and the PC replacement wave are promoting an increase in demand for networking modules. The global PC market is continuing to recover after experiencing an inventory adjustment period, with an expected growth rate of 3% for the entire year of 2024. As a market leader in PC networking modules, Guanghetong is expected to be the first to seize the overall recovery trend of laptops, coupled with AIPC's higher reliance on networking functions, the company's PC module performance has significant room for improvement.

The AIoT market prospects are promising, with the development of RedCap technology and AIPC jointly driving the industry's prosperity. The demand for cellular modules is rising significantly. As a leading enterprise in the industry, Guanghetong operates steadily, with continuous revenue growth, high internal management efficiency, and its development status is expected to gradually improve.

However, investors should also be aware of the risks that the development of the PC module market and the penetration rate of the internet of things in vehicles may not meet expectations.