\u3000\u3 Shengda Resources Co.Ltd(000603) 606 Ningbo Orient Wires & Cables Co.Ltd(603606) )
Event: the company released the first quarter report of 22 years. 22q1 company achieved an operating revenue of 1.816 billion yuan, a year-on-year increase of + 25.60%, a month on month increase of – 15.88%, and a net profit attributable to the parent company of 278 million yuan, a year-on-year increase of + 0.16%, a month on month increase of + 22.44%.
The revenue of submarine cable business increased steadily year-on-year. 22q1 company’s submarine cable business income was 741 million yuan, a year-on-year increase of + 23.45%, accounting for 41%; The revenue of marine engineering business was 271 million yuan, a year-on-year increase of + 38.30%, accounting for 15%; The revenue of land cable business was 799 million yuan, a year-on-year increase of + 23.09%, accounting for 44%.
The profitability of the company has improved month on month. 22q1 company’s comprehensive gross profit margin was 27.14%, year-on-year -2.73pct, month on month + 8.68pct. The company’s comprehensive gross profit margin increased month on month, mainly due to the increase in the proportion of 220kV submarine cable products with high gross profit margin. The year-on-year decrease in gross profit margin was mainly affected by the change of order structure and the rise of raw material prices.
The company has plenty of orders on hand. By the end of March 22, the company’s orders on hand had reached 9.187 billion yuan, of which the orders on hand of submarine cable, land cable and marine engineering were 5.464/28.84/839 billion yuan respectively, accounting for 59.5% / 31.4% / 9.1% respectively. With the continuous delivery of orders in hand and the superposition of subsequent new submarine cable bidding projects, the company has certain advantages, and the company’s performance is expected to continue to grow.
Offshore wind power is expected to usher in rapid development. After the large-scale superposition and rush loading of wind turbines, the construction cost of offshore wind power is reduced. We expect that China’s offshore wind power projects are expected to realize parity Internet access in 22 years, and the new installed capacity of offshore wind power is expected to grow rapidly in 23-25 years. We are optimistic about the submarine cable link with excellent competition pattern and high entry barriers.
Investment suggestion: it is estimated that the operating income of the company in the period of 22-24 years will be RMB 8.917/13.763/17.690 billion, yoy + 12.4% / 54.4% / 28.5%, and the net profit attributable to the parent company will be RMB 1.258/2.040/2.704 billion, yoy + 5.8% / 62.1% / + 32.6% respectively, maintaining the “buy” rating.
Risk warning: the newly installed capacity of wind power is less than expected, the progress of capacity construction is less than expected, and the price fluctuation of raw materials is at risk
