QRUNNINGCABLE(BJ:834682) Jianghai Securities·2024-08-07 00:31Investment Rating - The report assigns a "Buy" rating for the company, marking its first coverage [2]. Core Views - The company specializes in the manufacturing of power cable products, focusing on cables below 500kV, including power cable series, electrical equipment cables, and bare wire products. It aims to consolidate its position in medium and low voltage while making breakthroughs in ultra-high voltage and developing differentiated special cables [2][8]. - The company has shown steady revenue growth from 2019 to Q1 2024, with a notable increase in profitability [2][17]. - The domestic wire and cable industry is characterized by rapid growth, with power cables accounting for 39% of the market. The industry is experiencing a trend towards consolidation among larger enterprises [2][20]. Company Overview - The company, Ningbo Qiuguan Cable Co., Ltd., is a national high-tech enterprise and a recognized "little giant" specializing in advanced manufacturing. It was one of the first companies listed on the Beijing Stock Exchange [8][9]. - The company has a stable shareholding structure, with the controlling shareholders holding 59.89% of the shares [15]. Financial Analysis - In 2023, the company achieved a revenue of 2.983 billion yuan, representing a year-on-year growth of 12.28%. The net profit attributable to shareholders was 123 million yuan, up 13.39% year-on-year [17][19]. - The company’s revenue is projected to grow to 3.565 billion yuan in 2024, with a year-on-year growth rate of 19.52% [2][3]. Industry Analysis - The wire and cable industry in China is experiencing strong downstream demand, particularly in the power sector, driven by investments from major state-owned enterprises and the growth of renewable energy applications [2][20]. - The industry is characterized by a low concentration of companies, with a gradual shift towards larger enterprises dominating the market [2][20]. Competitive Advantages - The company has established competitive advantages in product development, customer relationships, and production capacity, particularly in high-voltage and special cables [2][3][10]. - The company’s primary customer is the State Grid, which accounts for 62.37% of its revenue, indicating a concentrated customer base [14][15].