\u3000\u3 Shengda Resources Co.Ltd(000603) 606 Ningbo Orient Wires & Cables Co.Ltd(603606) )
Event: according to the first quarterly report, the company achieved a revenue of 1.816 billion yuan in Q1 in 2022, with a year-on-year increase of 25.60%, of which the revenue of submarine cable system was 741 million yuan, with a year-on-year increase of 23.45%; The revenue of land cable system was 799 million yuan, a year-on-year increase of 23.09%; The revenue from offshore engineering was 271 million yuan, a year-on-year increase of 38.3%. During the reporting period, the company realized a net profit attributable to the parent company of 278 million yuan, an increase of 0.16% year-on-year and 22.47% month on month; The gross profit margin was 27.14%, up 8.68 PCT month on month.
There are abundant orders on hand and the impact of the epidemic is limited. 1) There are abundant orders on hand and the continuous release of performance is guaranteed: as of the end of the reporting period, the company has 9.187 billion yuan of orders on hand, including 5.464 billion yuan of submarine cable system orders; The land cable system order is 2.884 billion yuan; Offshore engineering orders amounted to 839 million yuan. During the reporting period, the company repeatedly won major submarine cable system orders in Yangjiang, Guangdong, demonstrating its strong competitiveness in the field of submarine cable. 2) The operation was slightly affected by the epidemic in China: the first quarterly report of the company showed that the monetary capital decreased by 36.83% month on month; Accounts receivable increased by 35.84% month on month, mainly due to the impact of China’s epidemic, resulting in a slight delay in the collection of some downstream customers. Under the background that offshore wind power maintains a high landscape, the impact of China’s epidemic on the company’s operation is only phased.
The strength of submarine cable is strong, benefiting from the high prosperity of sea breeze, and Haihua continues to improve its profitability. The company is a leading enterprise in the field of offshore wind power submarine cable, and has obvious advantages in capacity layout, technology research and development and owner relationship. In the future, offshore wind farms will become large-scale bases and far-reaching overseas. In the future, the absolute length and voltage level of submarine cable voltage will continue to improve, which will help the company optimize product structure and improve profitability. As a link with high prosperity, high gross profit and high barrier in offshore wind power, submarine cable, as a leading enterprise, is expected to fully benefit from the development of offshore wind power in the future. We expect the company to achieve revenue of RMB 8.778/11.556/12.444 billion and net profit attributable to the parent company of RMB 1.416/18.85/2.274 billion from 2022 to 2024, corresponding to pe2.04 billion 12.53x / 12.53x / maintain rating.
Risk warning: price fluctuation of upstream raw materials; The launch of new production capacity is less than expected; The progress of the winning project is less than expected; Deterioration of competition pattern in submarine cable Market
