Ningbo Orient Wires & Cables Co.Ltd(603606) ( Ningbo Orient Wires & Cables Co.Ltd(603606) . SH) handed over a report card slightly lower than the market expectation. However, since this year, the competition pattern of submarine cable industry is good, and the company has won the bid intensively, which may benefit the company’s performance.
Insiders told the financial associated press that the competition pattern of the “big three” seems relatively stable at present, but the abnormally high gross profit margin of the submarine cable “duopoly” Ningbo Orient Wires & Cables Co.Ltd(603606) and Jiangsu Zhongtian Technology Co.Ltd(600522) ( Jiangsu Zhongtian Technology Co.Ltd(600522) . SH), plus Hengtong Optic-Electric Co.Ltd(600487) ( Hengtong Optic-Electric Co.Ltd(600487) . SH), is bound to be coveted by new entrants and launch a round of impact on them.
Previously, the bidding price of Baosheng Science And Technology Innovation Co.Ltd(600973) ( Baosheng Science And Technology Innovation Co.Ltd(600973) . SH) with 30% normal gross profit was pre won for the Qingzhou four seas wind power project in Yangjiang, Mingyang, which sounded an alarm to the giant. “Whether the high gross profit of submarine cable industry has fallen sharply is like the sword of Damocles, and the market will certainly confirm it again and again.” The industry said.
On March 24, Ningbo Orient Wires & Cables Co.Ltd(603606) released its annual report, realizing an operating revenue of 7.932 billion yuan in 2021, an increase of 57% year-on-year; The net profit attributable to shareholders of listed companies was 1.189 billion yuan, a year-on-year increase of 33.98%.
This figure is lower than expected by many institutions. Previously, Zheshang Securities Co.Ltd(601878) estimated that the net profit of the company in 2021 would be 1.36 billion yuan.
The continuous decline of gross profit margin is the main reason why the company’s performance is lower than expected. The financial Associated Press reporter noted that from the first to the fourth quarter of 2021, the company’s gross profit margin gradually decreased, which were 29.87%, 29.77%, 27.91% and 25.34% respectively. The company’s comprehensive gross profit margin in 2021 decreased by 5.21 percentage points year-on-year.
Previously, the staff of Ningbo Orient Wires & Cables Co.Ltd(603606) Securities Department told the financial associated press that the gross profit margin of the company’s submarine cable had been about 50% and less than 50% in 2021. The company had long expected this. The superimposed raw materials were at a high level, and the gross profit margin of the company’s products fell to a certain extent, which was acceptable.
In 2022, the company won the bid frequently. The company said in its annual report that by the end of February 2022, the company had placed orders of 6.311 billion yuan, including 2.853 billion yuan for submarine cable system, 2.801 billion yuan for land cable system and 657 million yuan for offshore engineering.
In addition, according to the incomplete statistics of the financial Associated Press reporter, after entering March, the company successively issued four bid winning announcements, with a total bid winning amount of more than 3 billion yuan, and won the bid both at home and abroad. On March 24, the company announced that the consortium formed by the company won the bid for hollandsekustwest beta offshore wind power project. The bid winning amount is about 530 million yuan.
Sufficient orders and the launch of new production capacity are the key to the company’s performance to continue to maintain rapid growth Zheshang Securities Co.Ltd(601878) it is estimated that the company’s Ningbo submarine cable currently has an output value of about 3 billion-3.5 billion yuan. The planned 3 billion yuan submarine cable, 2 billion yuan equipment and special cable in Ningbo phase II will reach production capacity in Q4, and the new 1.5 billion yuan submarine cable capacity in Yangjiang is expected to be officially started in Q1 next year. The designed submarine cable capacity will reach 7.5 billion-8 billion yuan by the end of 2023. In addition, the land cable capacity can reach 5 billion yuan and the offshore engineering capacity can reach 1 billion yuan.
