\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 487 Hengtong Optic-Electric Co.Ltd(600487) )
The winning share of optical fiber and optical cable business has increased steadily: according to the prediction of the forward looking Industry Research Institute, the market scale of China’s optical fiber and optical cable is expected to grow to 589.5 billion yuan in 2026. In the centralized procurement project of China Mobile’s ordinary optical cable from 2018 to 2021, the winning share of Hengtong and management company increased steadily. In 2021, in the centralized procurement of ordinary optical cables by China Mobile, the company won the bid with a share of 27.0%. According to the company’s announcement, the company is the only company with the whole industry chain of “product service operation” in the current communication network industry. The company’s 400g high-capacity ultra-low loss optical fiber was shortlisted as the “national industrial foundation project”; The Gigabit ODN solution based on network reconfiguration is applied in the projects of operators and data centers.
The successful delivery of 220kV large-length and large-section submarine cable has exceeded 3 billion yuan in hand: according to the data of China Economic Research Institute, the market scale of China’s wind power submarine cable industry will be 6 billion yuan in 2020 and is expected to reach 25.4 billion yuan by 2025. The company has successfully delivered the second 220kV large length and large section submarine cable of the state power investment Zhanjiang Xuwen project, which is the first time that China has completed the production and delivery of the large length and large section three core 220kV submarine cable project. Vietnam tra Vinh II offshore wind farm project, the first submarine cable EPC project in Vietnam market undertaken by the company, has been successfully completed and put into operation. As of March 2022, the company’s submarine cable business had orders of about 3.042 billion yuan.
The company’s global submarine optical cable delivery mileage has exceeded 40000 kilometers. It is the only company in the whole industry chain in China: the company actively promotes the construction of peace cross ocean submarine cable communication system operation project and promotes the development of China international submarine cable. In October 2021, the Mediterranean section of peace successfully landed in Marseille, France, a European information hub city, which will bring richer digital connection services to Europe. By the first half of 2021, the company’s global undersea optical cable delivery mileage has exceeded 40000 kilometers, and has become the only whole industry chain company in China that has R & D and manufacturing of undersea optical cable, undersea junction box, repeater, branching units and cross ocean communication network solutions. In the future, the company will continue to contribute to the development strategic goal of “maritime power”.
Actively expand the business of silicon optical module, quantum communication and smart city: in March 2021, the company successfully released the mass production version of 400gqsfp-dddr4 silicon optical module. At present, 400g silicon optical module has sent samples to China’s head Internet companies and equipment manufacturers, and the test and certification of the client is in progress. The company was selected into the construction project of China Telecom Corporation Limited(601728) national key R & D plan “research and application demonstration of key technologies of T-bit ultra long span optical transmission system”, and became the only provider of 400g optical modules in the project. The company has planned and undertaken to build “Yangtze River Delta quantum secure communication ring network” and “Beijing Tianjin Hebei quantum secure communication ring network”. Among them, ningsutong quantum trunk line and Jingxiong quantum trunk line have been put into operation. In the first half of 2021, the company further strengthened its business layout in smart cities across the country, signed a number of projects in Guangdong, Shaanxi and other places, and had sufficient orders on hand. The expansion of new business will further help the development of the company.
Investment suggestion: we expect the company’s operating revenue from 2021 to 2023 to be 39.2 billion yuan (+ 21.0%), 45.53 billion yuan (+ 16.1%) and 51.94 billion yuan (+ 14.1%) respectively; The net profit attributable to the parent company is expected to be 1.5 billion yuan (+ 41.4%), 2.23 billion yuan (+ 48.2%) and 2.94 billion yuan (+ 32.2%) respectively; The corresponding EPS is 0.64/0.94/1.25 yuan respectively. We give the company 18 times PE in 2022, corresponding to the target price of 16.92 yuan. For the first time, the investment rating of “Buy-A” is given.
Risk tips: risks of changes in industrial policies, lower than expected local subsidies for offshore wind power, intensified market competition, price fluctuations of raw materials and exchange rate fluctuations
