\u3000\u3 Shengda Resources Co.Ltd(000603) 606 Ningbo Orient Wires & Cables Co.Ltd(603606) )
In 2021, the net profit attributable to the parent company was 1.189 billion yuan, a year-on-year increase of 33.98%.
In 2021, the company realized 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%; The comprehensive gross profit margin was 25.34%, a year-on-year decrease of 5.21pct. The rapid improvement of the company’s performance is mainly due to the steady growth of the operating revenue of the three business segments (submarine cable system, land cable system and Offshore Engineering); The gross profit margin has declined, which is mainly affected by the price fluctuation of raw materials and the change of revenue structure.
Both land and sea, high-quality development, full orders on hand.
The company accelerated the strategy of combining sea and land, and maintained the leading position in the three product fields of submarine cable system, marine engineering and land cable system. In 2021, the company’s submarine cable system achieved an operating revenue of 3.273 billion yuan, a year-on-year increase of 50.21%; The corresponding sales volume was 141990 km, with a year-on-year increase of 64.28%; The gross profit margin reached 43.90%. Offshore engineering achieved an operating revenue of 809 million yuan, a year-on-year increase of 253.53% and a gross profit margin of 25.14%. The proportion of the company’s marine industry sector in the annual revenue exceeded 50% for the first time, reaching 51.52%. The land cable system realized an operating revenue of 3.841 billion yuan, a year-on-year increase of 45.99%; The corresponding land cable sales volume was 159000 km, with a year-on-year increase of 41.10%; The gross profit margin is 9.49%. By the end of February 2022, the company’s orders on hand were 6.311 billion yuan, including 2.853 billion yuan for submarine cable system, 657 million yuan for marine engineering and 2.801 billion yuan for land cable system.
We continued to cultivate the field of high-end cables and won the European offshore wind power order.
The company continues to cultivate the professional field of high-end cables and forms four solutions: far-reaching sea umbilical and dynamic cable system, ultra-high voltage cable and submarine cable system, intelligent distribution network cable and engineering cable system, sea and land engineering service and operation and maintenance system. Ultra high voltage submarine cable and soft joint technology are leading in the world. They have the design, manufacturing and engineering service capabilities of high-end energy equipment such as 500kV AC submarine and land cable system and ± 535kv DC submarine and land cable system, and all technologies have reached the international leading level. As a consortium, the company and boskalis, a leading European offshore engineering contractor, won the hollandsekustwest beta (hkwb) project of European transmission network operator TenneT. The project is an offshore wind power transmission project planned and constructed by TenneT, with a total installed capacity of 700MW and an order amount of about 75 million euros. The project reflects that the company has been recognized by mainstream customers in Europe in terms of technological innovation and product quality, It has far-reaching significance for the next layout of the European high-end market.
Profit forecast and valuation
The company is the leader of submarine cable, with full orders in hand. With the gradual completion and operation of the eastern industrial base and the southern industrial base, the market share is expected to continue to increase. We estimate that the net profit attributable to the parent company from 2022 to 2024 will be 1.303 billion yuan, 1.803 billion yuan and 2.269 billion yuan respectively, and the corresponding EPS will be 1.89, 2.62 and 3.30 yuan / share respectively, with corresponding valuations of 29 times, 21 times and 16 times respectively.
Risk warning: submarine cable bidding price goes down; The price of raw materials has risen.
