Key investment points: as the main unit carrying electric energy, power cables will still play an important role in the construction of grid energy network and new power system. It will not only maintain a growth rate higher than GDP in total, but also tilt towards high-end products in technology. The “sea, land and air” will develop in parallel, and the investment opportunities of the industry will appear.
The new overhead conductor market is concentrated and growing rapidly:
The energy-saving and capacity increasing conductors with high conductivity aluminum, aluminum alloy, soft aluminum profile and carbon fiber composite core are the main development direction of new conductors in the future. It is expected that the total market scale will reach 35 billion yuan during the 14th Five Year Plan period, with a four-year CAGR of about 22%, the leading industry Jiangsu Zhongtian Technology Co.Ltd(600522) market accounting for about 40% and Cr4 of about 76%.
Land cable and Gil benefit from the improvement of cable utilization rate:
From 2021 to 2025, the average annual market space of 10kV and above land cables is about 50 billion yuan, CAGR is about 12%, that of 110kV and above land cables is about 18%, that of CR10 is about 67%, that of cable accessories is about 16%, that of EHV cable accessories is less than 10 in China, and the gross profit margin is as high as 50-90%. Gil products are in the industry leading period in China. There are applicable scenarios at the power generation, transmission and distribution end, and the gross profit margin of a single product is as high as more than 50%.
Submarine cables are in the ascendant, with high barriers to entry:
Driven by the demand of the rapid development of offshore wind power, it is estimated that the scale of submarine cable market is expected to reach 60 billion yuan and CAGR is about 22% from 2021 to 2025. At present, there are only five manufacturers with submarine cable manufacturing and laying capacity in China. Technical barriers, wharf resources and construction capacity restrict the entry of other manufacturers, and the comprehensive gross profit margin of products is about 40%.
Investment suggestions:
1) Jiangsu Zhongtian Technology Co.Ltd(600522) : the leader in cable R & D and manufacturing. New energy and new materials bloom in many places. The first coverage is rated as “overweight”, and the target price is 17.66 yuan; 2) Ningbo Orient Wires & Cables Co.Ltd(603606) : Sea and land cables go hand in hand, high-end products help take off, and “overweight” rating is given for the first time, with a target price of 51.52 yuan; 3) Baosheng Science And Technology Innovation Co.Ltd(600973) : the demand for traditional cables is stable, and submarine cables inject development power. The “overweight” rating is given for the first time, and the target price is 6.05 yuan; 4) Chang Lan Electric Technology Co.Ltd(002879) : a domestic pioneer focusing on cable accessories, with a “overweight” rating for the first time, with a target price of 17.07 yuan; 5) Jiangsu Ankura Smart Transmission Engineering Technology Co.Ltd(300617) : Pioneer power transmission expert, serving the future power, giving “overweight” rating for the first time, with a target price of 47.46 yuan; 6) Suggested off
Note: Qingdao Hanhe Cable Co.Ltd(002498) , Zhejiang Wanma Co.Ltd(002276) , Dalian Insulator Group Co.Ltd(002606) .
Risk tips:
1) the macro economy is less than expected; 2) Unstable supply chain; 3) Raw material prices continued to rise.
