\u3000\u3 Shengda Resources Co.Ltd(000603) 606 Ningbo Orient Wires & Cables Co.Ltd(603606) )
Matters:
The company released its 2021 annual report, realizing an operating revenue of 7.932 billion yuan, a year-on-year increase of 57.00%, a net profit attributable to the parent company of 1.189 billion yuan, a year-on-year increase of 33.98%, and a net profit of 1.149 billion yuan after deduction, a year-on-year increase of 39.44%. In 2021q4, the operating revenue was 2.159 billion yuan, a year-on-year increase of 41.10%, and the net profit attributable to the parent company was 227 million yuan, a year-on-year decrease of 17.02%. It is proposed to distribute a cash dividend of 3.50 yuan (including tax) for every 10 shares.
Ping An View:
2021q4 submarine cable revenue and gross profit margin are slightly lower than expected, and the scale of carry forward orders is considerable. In 2021, the revenues of the company’s submarine cable, offshore engineering and land cable were 3.273 billion yuan, 809 million yuan and 3.841 billion yuan respectively, with a year-on-year increase of 50.21%, 253.52% and 46.02%. The revenue of submarine cable and marine engineering accounted for more than 50% for the first time. It is estimated that the revenues of 2021q4 submarine cable, offshore engineering and land cable are 752 million yuan, 225 million yuan and 1.177 billion yuan respectively. The revenue of 2021q3 submarine cable, offshore engineering and land cable is RMB 995 million, RMB 267 million and RMB 1121 million respectively, that is, the revenue of Q4 submarine cable and offshore engineering business shows a certain decline month on month, which is estimated to be related to the rhythm of submarine cable delivery and revenue recognition. According to the data disclosed in the early stage, as of 2021q3, the orders in hand of submarine cables and offshore engineering are about 3.8 billion yuan. Based on the Q4 delivery, it is estimated that the orders in hand of submarine cables and offshore engineering are about 2.7 billion yuan by the end of 2021, and these orders are expected to be carried forward to 2022 for delivery. On the other hand, the gross profit margin of the 2021q4 project decreased by 18.81% compared with that of the 2021q4 project, on the other hand, due to the lower gross profit margin of the 2021q4 project.
Vigorously promote capacity expansion and form reserves for emerging businesses. In 2021, the East (Beilun) base · future plant will be put into operation smoothly and the production capacity will increase rapidly, and the digital construction of the plant will be promoted simultaneously in the future; Accelerate the construction of the southern (Yangjiang) base and obtain the territorial advantage of Yangjiang, Guangdong. It is estimated that Yangjiang base is expected to be put into operation in 2023; The construction of Beilun and Yangjiang bases will provide a capacity basis for the substantial growth of offshore wind power submarine cable demand in the future. In 2021, the company’s dynamic cable system was successfully industrialized on China’s first floating offshore wind power prototype, and is expected to occupy the first mover advantage in floating offshore wind power cable in the future; The development of high-end products such as strong current composite umbilical and umbilical key accessory system has been successful, and it is expected to be popularized and applied in the oil and gas field in the future. The implementation of new production bases and the promotion of new products provide support for the company’s sustainable growth in the future.
About 5 billion submarine cable related orders have been landed, and new submarine cable orders are expected to reach a new high in 2022. The company obtained about 7.3 billion yuan of submarine cable related orders in 2020, and the new orders in 2021 were relatively low; Since 2022, the company has received about 5 billion yuan of orders related to various submarine cables, including offshore wind power projects in Yangjiang and Zhejiang, umbilical cable projects of large oil and gas projects, European offshore wind power submarine cable projects and other orders, highlighting the company’s competitiveness in the field of submarine cables. Subsequently, a large number of offshore wind power projects in Guangdong and other places are expected to carry out submarine cable bidding, and the company is expected to continue to obtain orders. The scale of new submarine cable related orders in 2022 will probably exceed that in 2020.
Investment advice. Based on the current development situation of offshore wind power and the company’s order acquisition, the company’s profit forecast is adjusted. It is estimated that the company’s net profit attributable to the parent company from 2022 to 2023 will be 1.344 billion yuan and 1.803 billion yuan (the original predicted value of 1.319 billion yuan and 1.700 billion yuan), corresponding to eps1.5 billion yuan 95, 2.62 yuan, dynamic pe30 5. 22.7 times. The demand for offshore wind power submarine cable has a large growth space, and the competitiveness of the company’s submarine cable business is outstanding, maintaining the company’s “recommended” rating.
Risk warning. (1) The development of offshore wind power is affected by many factors such as policies, and there are less than expected risks. (2) The delivery of the company’s new submarine cable orders in 2022 is affected by the progress of relevant projects, and there are risks that they cannot be delivered on time and the submarine cable business income in 2022 is less than expected. (3) The profitability of 2022 new submarine cable orders needs to be further verified, and there is a risk that it is lower than expected.
