Baosheng Science And Technology Innovation Co.Ltd(600973) (600973)
Event: the company announced on December 14 that it planned to increase the capital of 350 million yuan to AVIC Baosheng Offshore Engineering Cable Co., Ltd., a holding subsidiary, and hold 70% of the shares after the capital increase; It is proposed to increase the capital of its subsidiary Baosheng Changfei Offshore Engineering Co., Ltd. by 225 million yuan, and hold 30% after the capital increase.
The submarine cable production plant enjoys unique geographical advantages. Baosheng submarine cable, a subsidiary of Baosheng Science And Technology Innovation Co.Ltd(600973) has 201.7m of the world’s highest cable cross-linking tower, 50000 ton national largest submarine cable wharf and 180000 square meters of national largest single submarine cable plant, which can provide customers with integrated solutions for the design, manufacture and installation of submarine cables, optical cables, photoelectric composite cables, special cables and umbilical cables, It is a late show in China’s high-end submarine cable field.
Centralized delivery of high value-added and large length 220kV offshore wind farm transmission cables. The company has successively entered the high-end submarine cable market. Recently, the company has successively delivered 9 220kV large-length photoelectric composite submarine cables, with a total length of more than 300km, to SDIC Shandong Peninsula No. 3 sea breeze project, Huaneng Shandong Peninsula project, Fujian Changle offshore project and Huaneng Dalian Zhuanghe project.
Under the background of high prosperity of sea breeze and double carbon, the demand for sea breeze during the 14th Five Year Plan period is high. In 2021q3, 1.67gw of offshore wind power was newly connected to the grid, with a year-on-year increase of 227%. The cumulative installed capacity of offshore wind power in China has reached 13.19gw, with a year-on-year increase of 75.7%. Despite the decline of state subsidies, coastal provinces and cities still strongly support offshore wind power development: Jiangsu plans to build 28 offshore wind farms with an installed capacity of 9.09gw during the 14th five year plan; Zhangzhou, Fujian, proposed a 50gw offshore wind power base scheme, with a planned investment of more than trillion; The “14th five year plan” of Guangdong Province clearly proposes to build a 10 million KW sea breeze base in eastern Guangdong.
Investment suggestion: at present, the company’s revenue mainly comes from the traditional wire and cable business, and the follow-up development is mainly focused on the submarine cable business. The configuration of the company’s submarine cable plant and wharf is relatively high. At present, it is in the period of capacity expansion and high-end product development, with great follow-up development potential. We estimate that the company’s revenue from 2021 to 2023 will be 40.2/48.3/56.9 billion yuan, and the net profit attributable to the parent company will be 309/377/486 million yuan, corresponding to pe27.9 million yuan 99 / 22.91/17.77, rated as “overweight”.
Risk warning: the promotion of offshore wind power project is not as expected; The parity of offshore wind power was lower than expected.
