\u3000\u3000 Ningbo Orient Wires & Cables Co.Ltd(603606) (603606)
Matters:
According to the company’s announcement, the company won the bid for 220kV and 35kV submarine cable procurement and laying works of Mingyang Yangjiang Qingzhou four seas wind power project, with a bid winning amount of 1.39 billion yuan.
Ping An View:
In 2022, the first battle of Guangdong market was won. Mingyang Yangjiang Qingzhou four seas wind power project is the first large-scale project for submarine cable bidding in Guangdong market in 2022. The company won the bid at a non lowest price, reflecting the company’s competitiveness in the West Guangdong sea wind market. Referring to the bidding documents, the project adopts two 3 * 1000mm2 transmission 220kV submarine cables, with a single circuit length of about 80km. We estimate that the price of submarine cables is slightly lower than that of submarine cables of the same specification in the rush loading period; The total price of submarine cable and laying of the project is 1.39 billion yuan, corresponding to 2780 yuan per kilowatt, which is significantly higher than the value of submarine cable of conventional projects. It is estimated that the project is mainly due to the long offshore distance and the use of large-section submarine cable.
There are still a large number of bidding for offshore wind power projects in Yangjiang sea area, and the company is expected to usher in the outbreak of orders. At present, the Three Gorges Yangjiang Qingzhou 5 / 6 / 7, Yuedian Yangjiang Qingzhou 1 / 2 and CGN Yangjiang Fanshi 1 / 2 projects are under planning and construction, with a total scale of 6Gw. It is expected to open submarine cable bidding in succession. Referring to the submarine cable value of Qingzhou No. 4 in Yangjiang, Mingyang, the potential scale of submarine cable orders for these offshore wind power projects to be tendered exceeds 10 billion yuan, and higher voltage AC submarine cables or DC submarine cables will be used. The company is expected to obtain a large number of orders relying on technical and regional advantages.
In 2022, the revenue scale of submarine cable related businesses is growing and can be expected. In addition to the submarine cable related orders of RMB 1.39 billion won this time, the company obtained various submarine cable and laying orders of RMB 574 million from relevant units such as state grid, CNOOC and China Resources Power in January 2022. The total submarine cable related orders since 2022 have reached RMB 1.96 billion, and is expected to be delivered within 2022. As of 2021q3, the company’s submarine cable and construction orders in hand were 3.8 billion yuan, and it is estimated that most of them will be carried forward to delivery in 2022. Considering the carry over orders and the orders obtained in 2022, it is estimated that the scale of submarine cable orders planned to be delivered in 2022 will exceed 4 billion yuan. The subsequent company will continue to obtain submarine cable orders and partially deliver them in 2022. The scale of submarine cable related business revenue can be expected to grow positively in 2022.
The era of sea breeze parity is coming, the submarine cable track is of high quality, and the company can continue to grow. Driven by factors such as the large-scale of offshore wind turbines, China’s offshore wind power has entered the era of parity, and a large number of parity projects have begun to appear. Offshore wind power is expected to become one of the main power sources in coastal provinces, with large growth space. With the offshore development of offshore wind power projects, the demand for submarine cables corresponding to offshore wind power projects per kilowatt is expected to increase, and the competition pattern of submarine cables is clear, which belongs to a high-quality growth track. With leading technical strength and historical performance, the company has certain territorial advantages in Zhejiang and Guangdong. In the future, it will benefit from the rapid growth of offshore wind power submarine cable demand, and the continuous growth can be expected.
Profit forecast and investment suggestions. Based on the current development situation of offshore wind power, the company’s profit forecast is adjusted. It is estimated that the company’s net profit attributable to the parent company from 2021 to 2023 will be 1.310 billion yuan, 1.319 billion yuan and 1.700 billion yuan (the original forecast value is 1.338 billion yuan, 1.162 billion yuan and 1.56 billion yuan), corresponding to EPS 1.5 billion yuan 91, 1.92, 2.47 yuan, dynamic pe29 2. 29.0, 22.5 times. The demand for offshore wind power submarine cable has a large growth space, and the competitiveness of the company’s submarine cable business is outstanding, maintaining the company’s “recommended” rating.
Risk warning. (1) The development of offshore wind power is affected by many factors such as policies, and there are less than expected risks. (2) The delivery of the company’s new submarine cable orders in 2022 is affected by the progress of relevant projects, and there are risks that they cannot be delivered on time and the submarine cable business income in 2022 is less than expected. (3) The profitability of 2022 new submarine cable orders needs to be further verified, and there is a risk that it is lower than expected.
