\u3000\u3 Shengda Resources Co.Ltd(000603) 606 Ningbo Orient Wires & Cables Co.Ltd(603606) )
Event: the company released the annual report of 2021. In the past 21 years, the company achieved an operating revenue of 7.932 billion yuan, a year-on-year increase of + 57.00%; The net profit attributable to the parent company was 1.189 billion yuan, a year-on-year increase of + 33.98%. Among them, 21q4 company achieved a total operating revenue of 2.159 billion yuan, a year-on-year increase of + 41.10% and a month on month increase of – 9.54%; The net profit attributable to the parent company was 227 million yuan, with a year-on-year increase of – 17.02% and a month on month increase of – 29.95%.
In 21 years, the revenue of the marine sector accounted for more than 50% for the first time. In the past 21 years, the company’s land cable, submarine cable and marine engineering realized operating revenue of RMB 3.8413273809 billion respectively, with a year-on-year increase of + 46.02% / + 50.21% / + 253.53%, accounting for 48.43% / 41.26% / 10.20% respectively. The revenue of the company’s marine sector exceeded 50% for the first time, and the business structure was further optimized.
Affected by the price rise of raw materials, the profitability of the company decreased in 21 years. The gross profit margin and net profit margin of the company in 21 years were 25.34% / 14.99% respectively, with a year-on-year increase of -5.21 / – 2.57pct; The gross profit margins of land cable, submarine cable and marine engineering business were 9.49% / 43.90% / 25.14% respectively, with a year-on-year increase of -2.60 / – 9.82 / + 1.59pct. Affected by the rise in the price of raw materials, the company’s gross profit margin of submarine cable and land cable decreased year-on-year; Affected by the rush to install offshore wind power, the gross profit margin of offshore business increased slightly year-on-year.
The company has abundant orders and is expected to continue to contribute to its performance. Over the past 22 years, the company has successively won the bid of China Resources Cangnan 1, Mingyang Qingzhou IV, CGN Xiangshan and Yuedian Qingzhou first and second-class submarine cables and umbilical cables. By the end of February 2022, the company’s orders on hand were 6.311 billion yuan, of which the orders on hand of land cable, submarine cable and marine engineering were 2.801/28.53/657 billion yuan respectively, accounting for 44.38% / 45.21% / 10.41% respectively. With the gradual delivery of orders in hand, it is expected to continue to contribute to the company’s performance.
Investment suggestion: it is estimated that the net profit attributable to the parent company in 22-24 years is RMB 1.258/2.040/2.704 billion, yoy + 5.8% / + 62.1% / + 32.6%, EPS is RMB 1.83/2.97/3.93, maintaining the “buy” rating.
Risk tip: the installed capacity of wind power is less than expected, the speed of capacity construction is less than expected, and the price of raw materials is at risk.
