ZTT(SH:600522) Great Wall Glory Securities·2024-06-28 06:30Investment Rating - The report assigns a "Buy" rating for the company [2]. Core Views - The company has shown steady revenue growth, with a revenue of 450.65 billion yuan in 2023, representing an 11.91% year-on-year increase. The first quarter of 2024 saw revenue of 82.42 billion yuan, remaining stable year-on-year [1][23]. - The company has diversified its business structure, with traditional segments like power transmission and optical communication contributing significantly to total revenue. In 2023, power transmission accounted for 37.15% and optical communication for 20.22% of total revenue [2][26]. - The marine and new energy sectors are emerging as second growth curves, with marine series revenue experiencing a compound annual growth rate (CAGR) of 17.02% from 2019 to 2022, although it saw a decline of 48.93% in 2023 due to slow installation progress in offshore wind projects. Conversely, the new energy segment has a CAGR of 52.70% from 2019 to 2023, indicating strong growth potential [2][26]. Summary by Sections Company Performance - The company has maintained stable profitability, with net profits of 32.14 billion yuan in 2022 and 31.17 billion yuan in 2023. The decline in 2021 was primarily due to impairment provisions for high-end communication business [1][24]. - The overall gross margin for 2023 was 16.22%, with variations across segments. The marine segment had a gross margin of 26.65%, while optical communication and new energy had margins of 27.12% and 11.35%, respectively [1][27]. Marine Sector - The company is well-positioned in the marine cable manufacturing sector, with a robust order book of approximately 11.5 billion yuan as of March 31, 2024. The marine segment's revenue is expected to improve as the company expands into international markets and deep-sea operations [3][30]. - The global offshore wind power market is experiencing significant growth, with China leading in new installations. The report anticipates that the domestic marine cable market will exceed 16 billion yuan by 2026 [3][30]. Optical Communication Sector - The optical fiber and cable market is highly concentrated, with demand driven by 5G, fiber-to-the-home, and other infrastructure projects. The company has integrated capabilities across the supply chain, enhancing its competitive position [3][30]. - The optical communication segment's revenue reached 91.14 billion yuan in 2023, with a gross margin recovery to 27.12%, positioning the company favorably within the industry [3][30]. New Energy Sector - The new energy segment is rapidly growing, with the company holding 61 solar power stations and a total installed capacity of 390.26 MW as of the end of 2023. The company is also actively expanding its presence in the energy storage market [3][30]. - The report highlights the company's comprehensive approach to energy solutions, including solar, storage, and hydrogen technologies, which are expected to drive future growth [3][30].