Baosheng Science And Technology Innovation Co.Ltd(600973) (600973)
Key investment points
Baosheng Science And Technology Innovation Co.Ltd(600973) is a state-owned holding cable company: Baosheng Science And Technology Innovation Co.Ltd(600973) is a listed company under AVIC and a large state-owned holding enterprise in China’s wire and cable industry. The company is mainly engaged in the development, manufacturing and sales of wires, cables and cable accessories and related production technology development, as well as the development and application of network transmission system and superconducting system.
The company has advantages in R & D and Innovation: the company has a number of key technology breakthroughs, 248 patents and 7 R & D departments. In terms of marketing, the company has established the largest and most competitive marketing network channel in the industry, established 11 large areas and 27 regional marketing companies throughout the country, and formed a complete market service network and rapid response mechanism. The company has developed in the industry for many years, with a wide range of products, 1000 professional production varieties and strong competitiveness.
The industry of the company’s products has entered a rapid growth period: the company’s business involves new energy industry, communication industry and power industry. By the end of 2020, the cumulative installed capacity of offshore wind power in China is about 9 million KW, second only to the UK, becoming the second offshore wind power market in the world. In 2020, the installed capacity of offshore wind power will increase by 3.06 million KW, accounting for more than half of the global increase. In terms of communication industry, the industry continues to move towards high quality. The construction of 5g and other new information infrastructure was accelerated, and the innovation of industry integrated applications was accelerated. The target number of 5g base stations in China in 2023 is about 2.538 million. This means that at least 1.577 million base stations need to be built in the past two years.
Delivery of the company’s submarine cable business: according to the announcement of the company on September 8, 2020, the holding subsidiary AVIC Baosheng Offshore Engineering Cable Co., Ltd. won the bid for the procurement of 220kV submarine photoelectric composite cables and accessories for the C project of Changle offshore wind power plant with a cost of 545 million yuan. According to the disclosure on the company’s official website on October 27, 2021, on October 21, Baosheng submarine cable successfully delivered a large-length 220kV photoelectric composite submarine cable to Huaneng Shandong peninsula south No. 4 offshore wind power project, which is also the second 220kV photoelectric composite submarine cable delivered by Baosheng submarine cable in the project. Meanwhile, Zhao Wenming, executive general manager of Baosheng submarine cable, said: the 220kV large-length photoelectric composite submarine cables used by Huaneng in the south 3 and south 4 offshore wind power projects in Shandong Peninsula are exclusively produced and supplied by Baosheng submarine cable. The project has successfully delivered 4 220kV photoelectric composite submarine cables with a total length of nearly 180 km.
Investment suggestion: we predict that the earnings per share of the company from 2021 to 2023 will be 0.22, 0.23 and 0.29 yuan respectively. Give “overweight-b” suggestions for the first time.
Risk tip: the development of offshore wind power is less than expected, the rising cost leads to the decline of the company’s gross profit margin, and the slowdown of the development of downstream industries leads to the shortage of the company’s cash flow.
