ZTT(600522) 德邦证券·2024-12-25 00:23Investment Rating - The report initiates coverage on Zhongtian Technology (600522 SH) with a "Buy" rating [2][5] Core Views - The company is a leader in the submarine cable and optical communication sectors, with strong growth potential driven by accelerating offshore wind construction and the development of the optical communication industry [4][5] - Offshore wind power construction is accelerating both domestically and internationally, with China's offshore wind turbine bidding volume reaching 7 6 million kW in the first three quarters of 2024, a year-on-year increase of 24 59% [4] - The company's submarine cable business is expected to benefit from the trend of higher voltage levels and longer distances, with the mainstream voltage levels for array cables and export cables increasing to 66kV and 330kV/500kV respectively [4] - The optical communication sector remains robust, with the company leading in market share and securing significant orders in centralized procurement bids [20][27] Financial Performance and Forecast - The company's revenue is expected to grow from 50 11 billion yuan in 2024 to 62 4 billion yuan in 2026, with net profit attributable to shareholders increasing from 3 34 billion yuan to 4 79 billion yuan over the same period [5] - The company's PE ratio is lower than the industry average, with a 2024 PE of 15 4x compared to the industry average of 24 1x [5] - Historical financial performance shows steady growth, with revenue increasing from 38 7 billion yuan in 2019 to 45 1 billion yuan in 2023, and net profit attributable to shareholders growing from 1 97 billion yuan to 3 12 billion yuan over the same period [59] Industry Trends - Offshore wind power is entering a high-growth phase, with Europe aiming for at least 60GW of offshore wind capacity by 2030, and China's offshore wind market also showing strong growth potential [67][92] - The submarine cable market is characterized by high barriers to entry, including technical, certification, and capital requirements, leading to a concentrated competitive landscape dominated by a few key players [117] - The optical communication industry is benefiting from the acceleration of 5G and gigabit optical network construction, with China's 5G base stations reaching 3 377 million by the end of 2023 [135][137] Company Strengths - Zhongtian Technology has a leading position in the submarine cable market, with advanced technology and a strong track record of securing major projects both domestically and internationally [4][114] - The company has a diversified product portfolio in the optical communication sector, with a strong presence in fiber optic cables, ODN, and other related products [146] - The company has a global presence, with overseas factories in India, Indonesia, Brazil, Turkey, and Morocco, and products exported to over 160 countries and regions [172] Risks and Challenges - The company faces risks related to fluctuations in raw material prices and potential challenges in overseas expansion due to geopolitical factors [155]