\u3000\u3 Shengda Resources Co.Ltd(000603) 606 Ningbo Orient Wires & Cables Co.Ltd(603606) )
Core conclusion
The submarine cable industry is a leader with leading technical strength and continuous breakthroughs in high-voltage cables. The company is a leading enterprise in China’s submarine cable industry, with leading technical strength in the industry, focusing on R & D investment and innovation, and has the ability to design, manufacture and engineering services of high-end energy equipment such as 500kV AC submarine land cable system and ± 535kv DC submarine land cable system. In 22 years, the company won the bid for the first 500kV three core submarine cable product, once again demonstrating the company’s technical strength in the field of ultra-high voltage submarine cable.
The cost of sea breeze is higher than expected, and it is expected to realize parity Internet access in 22 years. Under the trend of large-scale wind turbines, the bid winning price of offshore wind turbines dropped significantly in January of 22. After superposition and rush loading, the construction price of offshore wind turbines is expected to fall. We expect that the cost of China’s offshore wind power projects in 22 years is expected to drop to about 10000 yuan / kW, the IRR of full investment can reach 6.8%, and the Internet can be accessed at parity. The CAGR of new installed capacity in 23-25 years is expected to reach 30%.
The entry barrier of submarine cable industry is high, and the market space in 25 years is expected to reach 57.5 billion yuan. The submarine cable industry has high barriers to entry. At present, the Cr5 of the industry can reach more than 90%, and the competition pattern is relatively stable. Under the trend of large capacity and far-reaching Haifeng project, the voltage level of submarine cable has an upward trend, and the value of submarine cable is expected to rise instead of falling. According to our calculation, the demand of China’s submarine cable market in 22-25 years is expected to reach 16 / 315 / 440 / 57.5 billion yuan respectively, with a total space of 149 billion yuan.
The company has abundant orders on hand and is expected to continue to expand its production capacity. The layout of the company’s eastern and southern industrial bases has obvious regional advantages. With the continuous promotion of the company’s capacity construction, it is expected that the company’s submarine cable capacity will reach 5-6 billion yuan by the end of 22 and 7.5 billion yuan by the end of 23. Over the past 22 years, the company has obtained submarine cable orders with a scale of more than 5 billion yuan. There are abundant orders on hand and it is expected to continue to contribute to its 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 warning: the newly installed capacity of offshore wind power is less than expected, the risk of intensified competition in submarine cable industry, and the risk of price fluctuation of raw materials
