Jiangsu Zhongtian Technology Co.Ltd(600522) (600522)
The volume and price of optical fiber and optical cable market have risen simultaneously, and the company's bid winning share has jumped sharply: CCID Consulting predicts that the new market scale of optical fiber and optical cable in China will reach 33.15 billion yuan in 2021, 39.94 billion yuan in 2025 and 4.8% CAGR. In September 2021, China Mobile's centralized procurement of ordinary optical cables opened a new business cycle, The bid winning share of the company increased by 9.8% year-on-year (from 2.20% to 11.97%), and the bid unit price increased by 33.9% year-on-year (from 58.93 yuan / core kilometer to 66.19 yuan / core kilometer). The increase in the price of this round of centralized mining is mainly due to the clearing of medium and low-end production capacity and the improvement of supply and demand pattern caused by the decline in prices in recent two years. October 2021 China Telecom Corporation Limited(601728) Announced the centralized procurement project of outdoor optical cables, with an estimated procurement scale of 43 million core kilometers.
China's leading submarine cable enterprise ranks among the world's leading ultra-high voltage submarine cable enterprises: we estimate that the new market scale of China's submarine cable in 2021 is expected to be about 10.3 billion yuan / year, and then it can be maintained at more than 6 billion yuan / year. Since 2009, Zhongtian has ranked first in China's submarine cable market and has the total integration ability of marine system engineering. According to incomplete statistics, the company's current ocean series orders amount to about 12 billion yuan. In addition, the company has reached cooperation with TenneT, a leading power supplier, to compete in the European high-end market.
The arrival of "light storage parity" is accelerated, and the company actively arranges the new energy industry: we estimate that the new investment scale of the global energy storage system is expected to reach 32.4 billion yuan in 2021, and the CAGR will be about 9.6% from 2021 to 2025. By the end of 2020, the company had 54 photovoltaic power stations with a total installed capacity of 361.67mw. The company has undertaken a number of major engineering projects, won the bid for the centralized procurement of energy storage lithium batteries by many communication operators and equipment manufacturers, and actively explored new markets such as Indonesia and Turkey to form a global layout.
The steady progress of UHV projects has helped to increase the market share of power cable business. CCID Consulting predicts that the total new market scale of UHV cables in China will reach 79.4 billion yuan from 2021 to 2025. In 2020, the top ten cable enterprises accounted for less than 10% of China's market share. The company continued to enhance its R & D capacity in the field of high-end power, and ordinary conductor, special conductor, ADSS and OPGW maintained a leading position in the Chinese market. The revenue of power cable from 2016 to 2020 was 15.6%, accounting for about 25% of the company's revenue, and the gross profit rate was stable at about 15%.
Investment suggestion: the volume and price of short-term optical fiber and cable rise together, offshore wind power ushers in a rush to install, and medium and long-term new energy continues to contribute to the revenue increment. We estimate that the company's operating revenue from 2021 to 2023 will be 46.86 billion yuan (+ 6.4%), 46.69 billion yuan (- 0.4%) and 49.77 billion yuan (+ 6.6%) respectively; The net profit attributable to the parent company is expected to be 390 million yuan (- 82.9%), 3.81 billion yuan (+ 878.3%) and 4.58 billion yuan (+ 20.2%) respectively. We use the segment valuation method to value the company. The target market value of the company in 2022 is 90.675 billion yuan, corresponding to pe23.3 billion yuan in 2022 80 times, corresponding to the target price of RMB 28.08 in 2022. For the first time, it is given a "Buy-A" investment rating.
Risk tip: the risk of intensified market competition, overseas market demand affected by the epidemic, local subsidies for offshore wind power less than expected, UHV construction progress less than expected, new energy business landing less than expected, and hypothetical calculation less than expected
