Jiangsu Zhongtian Technology Co.Ltd(600522) (600522)
Optical cable and cable longfuli new energy, with high business prosperity. Jiangsu Zhongtian Technology Co.Ltd(600522) is a leading enterprise in China’s optical fiber communication and power cable. The optical cable has the integrated production capacity of optical rod fiber cable. The cable has special conductor, OPGW, ADSS, equipment cable and other products. Its business covers the fields of communication, power grid, marine equipment, new energy, new materials and intelligent manufacturing. In the first three quarters of 2021, benefiting from the rapid volume of submarine cable business, the company’s revenue increased rapidly, with a revenue of 37.4 billion yuan in the first three quarters, a year-on-year increase of 23%; Affected by the provision for inventory impairment of Qualcomm business, the net profit attributable to the parent company was RMB 490 million, a year-on-year decrease of 69%.
Energy storage business will be the Jiangsu Zhongtian Technology Co.Ltd(600522) key development direction, and the business continues to break the Bureau. Jiangsu Zhongtian Technology Co.Ltd(600522) strive to be the main force of the “double carbon” super long track, and has formed an industrial layout with new energy as the breakthrough, marine economy as the leader, smart grid as the support, 5g communication as the basis and new materials as the growth point. In terms of new energy, guided by the “3060” low-carbon green, the company locates the subdivided fields of light, storage and foil, and deeply layout the new energy industry with the development goal of “strengthening the integration of photovoltaic industry, expanding the advantages of energy storage industry and accelerating the layout of copper foil industry”. The company has laid out its energy storage business in depth. The company takes the large-scale energy storage system as the core to promote the energy storage applications on the power grid side, user side and power supply side. The company has formed a complete energy storage industry chain including battery anode and cathode materials, structural parts, copper foil, lithium battery, BMS, PCs, EMS, transformer, switchgear, energy storage container and other core components, which can realize the internal independent matching rate of equipment required by power grid side energy storage power station of more than 95%, and the internal independent matching rate of equipment required by user side energy storage power station of more than 99%.
Zhongtian has undertaken many high-quality energy storage projects. Zhongtian participated in the construction of a number of major projects, such as the first batch of 66mwh energy storage power stations on the East Zhenjiang power grid side of the State Grid, Changsha Furong 52mwh station building energy storage power station on the power grid side with the largest single capacity in China, the world’s largest power grid side Kunshan 48.4mwh energy storage power station on the second phase of Jiangsu, and the country’s largest user side power battery large-scale echelon utilization project energy storage power station.
Signed a strategic cooperation agreement with the Three Gorges power station to jointly promote the construction of 1GWh shared energy storage power station. On November 29, 2021, Jiangsu Zhongtian Technology Co.Ltd(600522) Group Co., Ltd. and Three Gorges Power Co., Ltd. signed a strategic cooperation agreement, which agreed that both parties should give full play to their comprehensive advantages, form comprehensive cooperation in investment and development, information sharing, construction and operation, technical services, etc. of photovoltaic and energy storage, and further integrate high-quality resources of upstream and downstream industrial chains of photovoltaic and energy storage related industries, Jointly promote the high-quality development of Jiangsu regional power industry. After signing, the two sides will set up a special class to jointly promote the construction of Rudong 500MW / 1000mwh shared energy storage power station, and it is planned to realize grid connection in December 2022. We expect the company’s energy storage business revenue to be about RMB 700-800 million and RMB 1.4-15 billion from 2021 to 2022
In addition to the energy storage business, the company’s marine business and photovoltaic business are expected to achieve rapid growth. (1) Marine business: the company adheres to the “systematization of core products and internationalization of engineering services” In the strategic direction of, the technology research and development is oriented to the deep and open sea, and the market layout is oriented to globalization. We continue to deeply cultivate marine equipment such as submarine optical cable, submarine cable, submarine photoelectric composite cable and submarine cable construction ship and machine. Now we have the total integration ability of marine system engineering integrating submarine cable submarine observation, exploration submarine cable laying and fan construction, We are committed to becoming the world’s leading energy information interconnection system solution service provider. (2) The company has a photovoltaic power station product industry chain and service system, and its main businesses include photovoltaic system product supply, photovoltaic resource development, general contracting and power station operation and maintenance. During the 14th Five Year Plan period, Jiangsu Zhongtian Technology Co.Ltd(600522) will implement strategic cooperation with state-owned companies in Rudong County and take advantage of Rudong’s ground and marine photovoltaic resources to implement photovoltaic project construction. Jiangsu Zhongtian Technology Co.Ltd(600522) The photovoltaic installed capacity planned by Rudong in 2021 is about 3 million KW, and drives a total revenue of more than 23 billion yuan from photovoltaic materials, energy storage systems and electrical equipment.
Profit forecast, valuation and rating: the risk release of high-end communication business is coming to an end, which has little impact on the company’s main business. The company is a leading enterprise in China’s optical fiber communication and power cable, and continues to expand new business and transform to a new energy giant. Considering the rising prosperity of the optical fiber and cable industry, the rapid volume of marine business, the rapid growth of energy storage business and photovoltaic business, we maintain the net profit attributable to the parent company in 2021-2023 as 177 million yuan, 3.916 billion yuan and 4.230 billion yuan, corresponding to 310x, 14x and 13X PE in 21-23 years, maintaining the rating of “overweight”.
Risk tip: the boom cycle of optical fiber prices has fallen; The prosperity of marine business is declining, and the impairment is withdrawn.
