QIFAN(SH:605222) Soochow Securities·2024-07-26 03:00Investment Rating - The report assigns a "Buy" rating to the company, indicating a projected stock price increase of 5% to 15% relative to the benchmark over the next six months [1]. Core Insights - The company is a leading player in the domestic wire and cable industry, with a recent focus on submarine cable business. It has shown stable revenue growth with a compound annual growth rate of 25% from 2019 to 2023 [6][44]. - The company has significant orders in hand, approximately 1 billion, with new projects in Guangdong, Shanghai, and Zhejiang, indicating substantial future business potential [2][74]. - The company is uniquely positioned in Fujian with a complete submarine cable production line, which is expected to benefit significantly from the ongoing offshore wind projects in the region [11][84]. Summary by Sections Company Overview - The company is a top-tier wire and cable manufacturer in China, recently entering the submarine cable sector. It has production bases in Yichang, Hubei, and Pingtan, Fujian [23][24]. - The company has delivered its first batch of 26/35KV submarine cables in 2021, marking its entry into the marine equipment sector [6][24]. Offshore Wind Projects - The report highlights the acceleration of offshore wind projects as the "14th Five-Year Plan" approaches completion, with various regions ramping up their offshore wind initiatives [40]. - Fujian province has a significant remaining capacity of 10GW for offshore wind projects, with a strong urgency for development due to its superior wind resources [4][59]. Financial Forecast and Valuation - The company is expected to achieve net profits of 4.98 billion, 7.32 billion, and 9.24 billion for the years 2024 to 2026, respectively. The target market capitalization is set at 110 billion, with a target price of 26 yuan based on a 15x PE ratio for 2025 [28][75]. - Revenue from the submarine cable business is projected to grow significantly, with estimates of 7.5 billion, 18 billion, and 26 billion for 2024 to 2026, reflecting growth rates of 650%, 140%, and 44% [77].